deep customer insights, laurea, october 2015

Deep customer insightsWhat customer insights are and how can they be applied

Taneli Heinonenmail@taneliheinonen.comwww.taneliheinonen.com

My background: from sociology to design

Work experience:

•  Insight Delivery, Education, research and consulting

•  Diagonal, Insight Specialist in a service design agency

•  Gemic, consultant and ethnographer in an innovation consultancy

•  Eximia, teacher of sociology and a marketing assistant in an education company

Education:

•  Lund University, MA Applied Cultural Analysis•  University of Helsinki, B.Soc.Sc., Sosiology

www.taneliheinonen.comTaneli Heinonen, Insight Delivery

Current business of customer insights

Companies try to develop their business by understanding the consumer behavior better

•  What are the key drivers of consumers in our market?

•  Why are they saying one thing and then doing something else?

•  Who are our customers? How can we get beyond the traditional demographic segmentation models?

•  Why do consumers reject our service? What are the barriers for using our products?

•  What are their needs and aspirations? How could we better answer them?

•  What do they value? How could we become more valuable?

Different fields of building insights

Big data Behavioral economics

Deep insights of human sciences

Customer / consumer / user / human insights

•  Large data sets•  Recorded online

behavior

•  Experimentations•  Studying different

rationalities

•  Studying the quality of experience

•  Cultural “why” behind rationalities

The promise of big data – can huge digital data sets provide important knowledge

Customization based on the dataVariety and quantity of existing data

Behavioral economics as a way of bringing psychological elements to economics

•  System 1 (automatic and fast) thinking vs. system 2 (analytical and slow thinking)

•  Experiencing self vs. remembering self

•  Heuristics serve in fighting a cognitive load:

•  Anchoring•  Herd mentality•  The cost of zero cost•  Availability heuristics•  Substitution

Daniel Kahneman, Dan Ariely and Thale & Sunstein with their Nudge-thinking have popularized behavioral economics in the recent decades.

See also for example: http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions#t-19717http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory

Applying tools of human sciences and qualitative methods to gain thick descriptions of the phenomenon

•  Tools of human sciences have a) become part of the toolbox of designers b) translated into a new field of applied ethnography and anthropology.

Grant McCracken, Patricia Sunderland & Rita Denny and the founders of Red Associates Christian Madsbjerg & Mikkel Rasmussen have advocated for application of human sciences in business development.

See also for example: https://www.youtube.com/watch?v=zNUCmISvDss https://www.youtube.com/watch?v=iR8n78VhJes

Companies working with insights come from different fields and practices

Deep Customer Insights

Design agencies and design thinking

Strategic consultancies and ethnography

Service design agencies Insight research agencies –

connected to ad agencies

Public sector and behavioral economics

Why are customer insights important

Customer Insights as way of regaining clarity in the fog

Photo credits: Guru Sno Studios. Flickr.com

Where does the fog come from and why has understanding the customers become so important?

Photo credits: Ian Muttoo. Flickr.com

Change of societies from 1) agrarian to industrial and 2) from industrial to consumer society

Agrarian society

Farms

Surviving of the land

Possessions as scarce utilities for life

Industrial society

Factories

Growth of production

New industrially produced products available for masses

Consumer society

Services online and offline

Providing experiences

Abundance of products and services ubiquitously available

Digitalization and urbanization changes the experiencescape by providing a huge amount of choices

Agrarian society

Farms

Surviving of the land

Possessions as scarce utilities for life

Industrial society

Factories

Growth of production

New industrially produced products available for masses

Consumer society

Services online and offline

Providing experiences

Abundance of products and services ubiquitously availableUrban population 54% of the total global

population, up from 34% in 1960, and continues to grow. (WHO)

70% of the world population will be using smartphones by 2020. (Ericsson Mobility Report, 2015)

Photo credits: Alexander Rentsch. Flickr.com

Decision-makers often operate with wrong models of human behavior – seeing people as mere rational choice makers

Homo economicus

Rational

Self-interested individual

Attempts to maximize own utility

Is easy to measure with simple models of marginal utility

Real people

Irrational, emotional and social beings

Habits, routines and practices

Contradicting values and identities

Changing roles and contexts of daily life

Relationships and role models

Numbers have been considered to be the only truth – business believes quantified truths

Underestimating things that can’t be measured and overestimating measurable numbers. Numbers are often data of the past and thus we end up thinking future will look like the past.

Quantitative research vs. qualitative research

•  How many of pre-specified x,y,z there are vs. What kinds of x,y,z there are and what are their relations like

•  Properties vs. Aspects

•  Amounts vs. Experiences

•  Large sample vs. deep description

•  “Objective” vs. interpretative

”The greatest weakness of the quantitative approach is that it decontextualizes human behavior, removing an event from it’s real world setting and ignoring the effects of variables not included in the model.”

Roger Martin, the dean of Rothman School of Management

From collecting data to building wise decisions

We buy a lot of things, but we rarely know why we made the choices we made.

Photo credits: OKNOVOKGHT. Flickr.com.  

Insights as wisdom to make right kind of business decisions

Truth

Discovery

Unconscious needs

Inspiration

Ackoff’s view: From data to wisdom

•  Wisdom: evaluated understanding that can be applied to decision-making.

•  Understanding: appreciation of "why“ – synthetization of new knowledge.

•  Knowledge: collection and application of data and information; answers "how" questions

•  Information: data that are processed to be useful and have a meaning; provides answers to "who", "what", "where", and "when" questions.

•  Data: symbols as raw data. For example 0&1Ackoff, R. L. 1989. From Data to Wisdom. J. Appl. Syst. Anal. 16, pp 3-9

Insights as wisdom to make right kind of business decisions

Wisdom helps in defining right problems to solve

Double diamond model of Design Council UK

1. Discover 2. Define 3. Develop 4. Deliver

Insight generation is the basis of the creative process

Insight Design

Definitions and examples of insights

Insights are crystallized forms of understanding that support the creative work or decision making

Insights are NOT just data

Insights are NOT just findings of market research

Insights give perspective that inspires good business decisions

They don’t just answer WHAT, but also WHY and HOW

Deep understanding

Truth

Discovery

Unconscious needs

Consumer aspirations

Inspiration

Perspective

Words typically used to describe customer / consumer insights

Typical explanations of the insights

INSIGHT BEHIND MARKETING

Combining Hifi-sound systems and interior design to support couples in their negotiations about the home

INSIGHT BEHIND A PRODUCT

What kinds of insights you can see behind the Airbnb service?

INSIGHT BEHIND A SERVICE

Clarity and right perspective give direction to creative work

Photo credits: Roger. Flickr.com

2nd part

Fields of understanding

Different viewpoints to the everyday life of people

People

StructurePractice

Building an understanding of the relevant aspects - People

Who are the people we need to understand?

What is it like being them?

How is the service or product x part of their life?

Building an understanding of the relevant aspects - Practices

What are the relevant practices that people engage in?

How do people experience these?

What is the role of service or product x in these practices?

Building an understanding of the relevant aspects - Structure

What are the relevant social and cultural structures for the context of service or product x?

How have these changed over time and what are the ongoing changes?

How do these changes affect the people and practices?

When understanding goes wrong in business…

When understanding goes wrong in business…

Methods and process

1. Discover 2. Define 3. Develop 4. Deliver

Insight generation is the basis of the creative process

Insight Design

Analytical approach fuels the creative process

Insight part of the design process has five stages:

1. Discover 2. Define

1. Re-framing the issue

What are we trying to understand?What is this all about from the perspective of people and culture?

2. Designing the research

What will the research questions be?What kind of methods should be used?

3. Empirical research

How to apply the methods in the real world?How to document and map the data?

4. Analysis

What is the data telling us?How should we make sense of it?

5. Communication

What does the analysis mean for the creative task at hand?What kind of opportunities can we see?

Insight delivery point

www.taneliheinonen.com

Different methods for different goals – interviewing and a collection of other methods

1. Discover 2. Define

4. Analysis

What is the data telling us?How should we make sense of it?

Steve Portigal, 2013

Diary studies and cultural probes help you gather qualitative self-reported data over time

Example from: thecyclingcommuter.wordpress.com

Packages with tasks and artifacts given to research participants. They record and deliver the tasks to researchers.

Typically disposable cameras, diaries, stories, maps etc.

Allows the gathering of data over time.

Requires good briefing.

Recruitment is crucial to get right kind of people who are able to self-report with your support.

Analyzing the probes and conducting a follow-up interview with the respondents.

Focus groups help you analyze the discussion about a topic among a defined group of people

Example from: guardian.com Taking time out to listen: the benefits of focus groups.

Traditional qualitative market research technique that is often used for concept and product testing in different phases of the development process.

Well-planned discussion moderated by a researcher whose goal is to tease out useful answers and engage all participants into the discussion.

Typically 6-8 people in a group for 1-2 hours.

Allows you to study how ideas, topics or concepts are received in a group. What kind of conflicting and consensus views they evoke.

Card sorting exercises as a part of the interviews

Portigal 2013.

Visual aids that evoke discussion through the exercise of arranging cards or coming up with thoughts and stories based on them.

You can use visual cues of ideas, sort brands an images related to them, use pictures of places, times of the day etc.

Helps you see how people organize and relate things to each other and what kind of preferences they have.

User surveys help gather a lot of quantitative and some qualitative data

Surveymonkey is one of the examples that allows you to make surveys for free.

Surveys are series of structured questions.

Nowadays most surveys are made online.

It’s crucial to plan the survey well, so you get right kind of data. Mistakes are hard to correct.

Often used in business to get responses on preferences between brands and concepts, but also for opinions, reported behavior and background information.

Interviewing as a way of listening potential customers and framing business problems in new ways

Surveymonkey is one of the examples that allows you to make surveys for free.

Surveys are series of structured questions.

Nowadays most surveys are made online.

It’s crucial to plan the survey well, so you get right kind of data. Mistakes are hard to correct.

Often used in business to get responses on preferences between brands and concepts, but also for opinions, reported behavior and background information.

Steve Portigal, 2013

Recruiting respondents for interviews is a crucial stage for the success of the project

Surveymonkey is one of the examples that allows you to make surveys for free.

Think of the criteria of people you want to interview – they could all have similar background or then you might want to compare for example users and non-users of a specific service.

Translate the criteria into a screener – a document used for recruiting. Try to be specific by thinking what active means for example.

Use recruitment stage to analyze believes of the customers and treat the process as valuable data. If you can’t find certain kind of people that’s finding (in itself).

Plan according to the scope of the project and consider the access to respondents.Steve Portigal, 2013

Building a field guide and planning the exercises that take place in the field

From research question to discussion questions and themes.

Plan well and use the guide as a tool that supports you, but doesn’t restrict you.

How much time you assign for different sections.

If you are doing exercises, such as card sorting or map drawing, have everything you need prepared beforehand.

Steve Portigal, 2013

Fieldwork is all about listening to people and embracing their viewpoint and experience

Leave your worldview behind the door.

Introduce your goals, timetables and practicalities.

Build rapport.

Listen to, by asking questions and body language – don’t be afraid of silence.

Feel free to ask stupid and simple questions – you are there to learn about their experience and views.

Make the familiar foreign and foreign familiar. Re-learn from a new viewpoint.

Be prepared to discover emerging themes and new ways to frame the problem

Think about the usability of your documentation. Make sure you can see and hear the recordings and understand the notes. Steve Portigal, 2013

Thank you!

Contact informationTaneli Heinonenmail@taneliheinonen.comwww.taneliheinonen.com