This is the first in a series of blog posts about consumer insight — what consumer insight is and the benefits of adopting consumer insight-driven decision making. Today’s post explains and illustrates what consumer insight is.
Consumer Insight Defined
The best definition of consumer insight that I’ve found comes from the EMM Group, an international marketing consulting firm. EMM’s “What Is An Insight? Guide” defines a consumer insight as “a profound understanding of consumers that leads to a business idea, which drives profitable growth.”
I like this definition because it succinctly explains what consumer insight is – “a profound understanding of consumers” – as well as the purpose of consumer insight – to come up with “a business idea”– and the ultimate end benefit of consumer insight – to drive “profitable growth.”
Consumer Insight Illustrated
A great illustration of “profound understanding of consumers” comes from former Procter and Gamble CEO A.G. Lafley’s must read book “The Game-Changer”. On pages 39 -40, Lafley describes how P&G used the consumer insight they gained about lower-income families in Mexico to come up with the very successful Downy Single Rinse.
“By spending time with women, we learned that the softening process is really demanding; it required a lot of time and energy…A typical load of laundry required a six-step process: wash, rinse, rinse, add softener, rinse, rinse. No problem if this is just a matter of pressing a button every once in a while. But it’s no joke if you have to walk half a mile or more to get water. Even semiautomatic machines require that the water be added and extracted manually. And if you get the timing wrong, the water supply will run out in the middle. The big ‘aha’!”…was discovering how valuable water is to lower-income Mexicans.”
The “profound understanding” that P&G gained was that “lower-income Mexican women liked to use softener, they had high standards for performance, and doing laundry was arduous, time consuming, and required plenty of water for multiple and rinsing steps.” With that understanding, they were able identify a problem to solve (making laundry easier and less water intensive) … which led to the “business idea” – Downy Single Rinse … which led to “profitable growth”.
Housewares Industry Lacks Consumer Insight
When I moved from consumer package goods to the housewares industry in the late 1980’s, I was shocked at how little housewares companies knew about their consumer compared to consumer package goods companies who knew a tremendous amount about their consumer. I’m sorry to say that not much has changed in 25 years. The majority of housewares companies still don’t have even the most basic understanding of their consumer, let alone the kind of “profound understanding” that leads to “aha” consumer insights that lead to blockbuster products that lead to profitable growth and market leadership.
Consumer Insight Key to New Product Success
If you analyze the most successful and profitable housewares products, you will find that they have one thing in common: They are significant improvements over the products that are currently on the market in the eyes of the consumer.
To develop products that are significant improvements over the products that are currently on the market, you have to thoroughly understand the people who are buying and using those products. You must understand what problems consumers are having with the products that are currently on the market so that you can come up with products that solve those problems. You must understand where current products fall short so that you can develop products that consumers will like better.
That’s why I tell my clients that having a “profound understanding” of your consumer is not optional. It should form the foundation upon which the entire new product development process is laid. The stronger the foundation, the higher the likelihood that the new products that emerge from the new product development process will be successful and profitable.
Do You have a “Profound Understanding” of Your Consumer?
Do you have a “profound understanding” of the people who buy and use your company’s products? Do you know who your consumers are? What they do? Where they are? What they buy and why? What they would like to buy? How they feel about your products? What media they are exposed to and what media they choose to view, listen to or read? How about what they think and feel? What their objectives and strategies are and how these influence how they behave?
If you don’t know the answers to these questions, you should strongly consider budgeting in money in your next fiscal year to do a Consumer Needs Assessment.
Having a “profound understanding” of your consumer is so important yet from a budgetary standpoint, it falls into the “important but not urgent” quandrant (using Stephen Covey terms) of spending priorities…which means that there is generally no money left after all the urgent “must do” projects have been done. That’s why I am now offering multi-client consumer needs assessments. A custom consumer needs assessment typically costs between $15,000 and $20,000. A multi-client consumer needs assessment costs you a fraction of that.