Beyond numbers to business intelligence that yields competitive advantage

1. Intelligent Research & Competitive Insights
Ray Asiroglu
June 13 2016

2. Introduction
• Two topics for this presentation:
– Optimising the usability of data to extract maximum benefits.
– Maximising research efficiency by capturing the right audience for research
projects.
My starting point is to look at the broader picture –
What’s the difference between marketing research, and the application of market
intelligence to gain competitive advantage and consumer preference?
"If I'd asked people what they wanted, they'd have said a
faster horse", Henry Ford

3. Intelligence Vs. Research
• Market research is a known science with a long history in the commercial
world. Its goal is to understand the market and the customers that make
up that market. But it’s not intelligence on its own.
• Market intelligence is a broader, more comprehensive understanding of all
aspects of the marketplace – market research is one of many inputs into
an overall view of the operating environment.
• The much broader data streams provide more aspects to analyse, and can
eventually lead to insights that can be the difference between winning
market share – and being an also ran.

4. Data streams for intelligence building
Competitor
Information
Market
Information
Product
Information
Customer
Information

5. The Data Streams
• Customer information means fully understanding preferences, behaviour,
brand loyalty, satisfaction rates and is the most important part of the
puzzle.
• Product information means understanding what’s available in the market,
their pricing, and their marketing activities.
• Market information is about a macro view of market size, segments, share
trends, forecasted growth as well as societal, economic and technological
trends.
• Competitor information is about understanding competitors’ strategies,
organisational structures, product investment portfolios and future
product plans.

6. Putting it together
• Market intelligence analysis requires different skills to marketing research.
Market intelligence analysis requires broader analytical skills that
encompass business analysis skills. It means integrating understanding of
the market, key competitors, the financial dynamics of the industry and
the entire business value chain.
• Generally, the best business analysts have a product management or
financial background. The best marketing research analysts are often
behavioural scientists or have mathematical backgrounds.
• My contention is that we need both to optimise the usability of data –
deep and accurate market understanding as well as superb competitive
understanding.

7. Insight
• No amount of data is worth anything without it leading to insight. Insight
connects the dots and leads to actions. But what is insight in today’s
circumstances?
• Let’s explore insight a bit further. There are several definitions, but for
purposes of today:
– the power of acute observation and deduction, penetration, discernment, perception
called intellection.
– an understanding of cause and effect based on identification of relationships and
behaviours within a model, context, or scenario

8. Insight cont’d
• There has been the emergence of new departments in companies which
carry the word “Insight” in their titles. We have “Customer Insight
Departments”, Insight Management Unit, Consumer Insight and so on.
• This extends to the job titles of executives working in those areas. One
reason for this development was a realisation that the emphasis of results
from individual research projects needed to be shifted to a wider
understanding of the dynamics operating in the full market place.
• Another reason was the impact of information technology. Progress in
technology gave way to the availability of masses of information found in
databases. The advantages of Insight Management are numerous. By
making use of all existing information, there is less need to consult
customers, thereby minimising unnecessary contact and costs.

9. The tyranny of numbers or the seduction of
emotion?
• With the explosion of the Internet, primary consumer research and secondary
information is available to all. Everything from Survey Monkey to Zoomerang is
there to churn out sheaves of data.
• Without numbers, incoherence reigns, progress goes uncharted, comparisons
become impossible and a company’s value is literally incalculable.
• The danger of numbers is not that they exist but that we become mesmerised
by them; that we come to believe that the importance of things is directly
related to their susceptibility to measurement.
• “Quantification brings credibility. But figures and tables can deceive, and
numbers construct their own realities. What can be measured and
manipulated statistically is then not only seen as real; it comes to be seen as
the only or the whole reality.” Robert Chambers, Economist

10. The tyranny of numbers cont’d.
• Coming to feel that only numbers count is seductive. Numbers are so safe
and scientific.
• Numbers protect us from making subjective judgments that may be open
to challenge.
• Numbers are like security blankets. But in our heart of hearts, we already
know that not everything that matters can be quantified: so we look for
ways to measure the immeasurable.
• The reason, of course, is the inevitable business need to argue a case, to
gain support, to attract investment from a finite source.
• We reach, because we have to, for numbers. And we really do have to.
Imagine a business plan which read in full: “When I look at this car design,
my heart fills with wonder and my soul soars. Please grant me R2 billion to
build a prototype.” (remember the Joule electric car?)

11. The seduction of emotion
• When we choose a car, we may calculate the amount of baggage space we
need, the future cost of fuel, our projected annual mileage, our disposable
income; but crucially, and often critically, we also respond to style, design,
personality and how they contribute to our own self-image: immeasurable
factors, every one of them.
• Perhaps the most important decision we ever make is who we marry; but
only if we prudently elect to marry for money does any element of
quantification enter into our decision-making process.
• The human brain performs an astonishing act of computing when it does
something as apparently simple as choosing a brand of pet food. It takes
into account the quantifiable: price, availability, pack size, ingredient list;
and the totally immeasurable: style, character, familiarity and a wild
projection of the animal’s personality.

12. The seduction of emotion
• When making brand choices, the human brain has no trouble at all in reconciling the
measurable and the immeasurable, the rational and the irrational, quantity and quality.
It understands that even price is not a simple matter of low=good, high=bad
• To the despair of rationalists, a high price may be seen as evidence of greater quality
and therefore greater worth.
• When that very same brain is invited to explain to a researcher the reason for its choice,
it should come as no surprise that the brain will favour the rational over the irrational,
the quantifiable over the emotional.
• As we’ve noted before, numbers, with their beguiling precision, provide a much more
respectable justification for behaviour than woolly old subjective affection.
• Even in times of recession, when the concept of value is most likely to tilt in favour of
the rational, it is hard to find examples, in any developed market, where the brand
leader by volume is also the cheapest.

13. The extremes
• A marketer should be like a skeet shooter - firing ahead of the target.
Current research can uncover deep motivations and hint at unmet/latent
needs but it doesn't always give you the full answer, allowing you to get
ahead of them. We sometimes have to rely on experience,
instinct/intuition or analogies from other categories (or plain old common
sense!). And could the proliferation of research currently available be
closing that window?
• The greater paucity of research in the past encouraged marketers to be
more willing to rely on their instincts/intuition.. And, though it may sound
like a heresy, to get ahead of the consumer I think you can't FULLY rely on
research since it only gives a snapshot of current behaviour and
perceptions.

14. The Extremes Cont’d
• Maybe it's the answer rich, question poor problem We need to get much,
much better at learning how to frame questions. Like the skeet-shooter.
S/he asks the right question: where's the target going next?
• So we are faced with a bit of a problem. In our private lives as real people,
choosing things and getting married and deciding which vacation to take,
we confidently embrace both the functional and the emotional; that
which we can measure and that which we can’t.
• But when we come to business – to the business of making money
(quantifiable), gaining brand share (quantifiable),building margins
(quantifiable), maximising shareholder value (quantifiable) – we seem to
lose our nerve a bit.

15. The Extremes Cont’d
• It seems that those who buy brands have a more instinctive sense of
worth and value than those who provide them: even when they’re the
same people.
• The reason is simple. In the recipe of appeals that any brand offers, the
rational ingredients will come from the core product itself: from its
performance, its price, its distribution.
• They will be invented and selected by a rational process.
• In contrast, the emotional ingredients will by and large come from its
communications: its messages, its look, its design, its voice.
• And the invention of each of these demands, at least in part is an
excursion into irrationality; into inspiration and creativity; into a field of
fantasy where numbers have no place.
• Were it to be otherwise, they would fail in their appointed task to
transform that core product into an object of even greater value to its
users

16. Emotion Vs. Rationality
• So where am I going with this?
• The latest “breakthrough” is the use of neuroscience.
• This research records activity in various areas of the brain. MRI’s, CAT
scans, & PET scans are now casually thrown around advertising
discussions. And we are told that these coloured pictures of the brain
reveal everything about what motivates consumers.
• The claim: “Neuroscience tells us that an emotional urge precedes rational
thought”.
• The most that neuro scientific research can observe is (a) that there is
activity and (b) where that activity is taking place.
• Neurons are microscopic influences. Yet consumer actions are
macroscopic and are driven by thousands (or millions) of microscopic
influences. That means advertising impact is influenced by lots of reality
buried in a wide range of neural pathways. This reality is so complex its
impossible for neuroscience to trace this tiny start to its impact.

17. A new approach?
• Far from saying that market research and intelligence gathering is
obsolete, the contention maybe that our approach has to change in
today’s networked societies.
• We all know that Facebook is probably the world’s second largest country
in terms of population. Twitter isn’t far behind.
• In South Africa, 30 million people have a cell phone. 40% are used to
access the Internet. Facebook and twitter comes built in with the newer
handsets. Facebook access is growing even in the townships.
• All these tweets and postings include some key conversations about
products, brands, experiences services. There’s a mother lode of
information out there – real opinions, real experiences.
• Add to this blogs and forums, even HelloPeter.
• If part of market intelligence is to understand market information –it’s all
out there.

18. A new approach? Cont’d
• There is software now available to sift through and track these
conversations – it helps develop the beginnings of hypotheses for further
research and investigation.
• But of course not everyone tweets or posts, but it has sparked revolutions.
• A revolution of sorts may be the need to synthesize creativity and data
collection.
• Because of the recession, we have probably become too dependent on
data (the numbers tyranny) because of caution at the expense of creativity
and risk taking.
• As a result, analysis has taken over from being data informed.
• All of you know that research is not a substitute for decision making – it’s
only a guide.
• If that were the case, Ford would’ve bred faster horses, Apple wouldn’t
exist and Sun City would be in Johannesburg.

19. A new approach? Cont’d
• Perhaps the key is to decide who you are, and what to measure. Part of
deciding on who you are comes from listening to the market – be it
through real life conversations, what the press are saying, or even taking a
leap of faith based on intuition and insight.
• Which means designing your own metric system. In the past the local
pharmacy, corner café, the green grocer knew who you were and would
anticipate your needs through conversation, observation and good old
common sense.
• In today’s connected world, those conversations are multiplied thousands
fold. The trick is to get into those dialogues.

20. A new approach? Cont’d
• A good conversation requires two way communication – I tell you about
myself, you do the same. Isn’t it odd that conventional market research
tends to plumb the dreariness of a one way questioning? If it were more
of an exchange of ideas, think of how much richer the information could
be.
• Yes, focus groups are about conversation – but the client sitting in the
group and participating tends to be the exception. Because it doesn’t
provide numbers but a feel for something that may require validation
through quant research.
• So, we’re back where we started. How do you balance conventional
research with insight – because that is the ultimate goal.

21. A methodology approach
• The first step is to be an “omnivore” of information. Read, observe, talk,
surf, listen. Children have this skill down pat – the dreaded “why”
question.
• Next, agonise over the questions – poor questions lead to poor
information.
• Talk to your own customers, your competition’s customers, your
competition’s suppliers and their suppliers. And competitors’ staff. It’s
amazing what you can learn from indirect sources.
• And competitive acumen also means learning about your competitor’s
competitors. By countering a competitor through entry into a product or
market area your competitor fears, you lower the chances of a direct
counterattack. Which means you can gain share while they are otherwise
engaged.

22. A methodology approach . Cont’d
• Put yourself in your customer or prospect’s shoes. Test your own call
centre, use a mystery shopper for your own service or products and those
of your competition. Experience your own brand.
• Get a Twitter and Facebook account and observe the conversations –
don’t try to seed them because consumers will catch you out.
• Divide your research into two groups – those who love your product, and
those that don’t know about it or don’t use it.
• Beware of professional respondents – those with time to attend a focus
group may not be the people who constitute the critical mass of your
market.
• Similarly, online surveys are dangerous –when last did you fill out one, and
why?

23. A methodology approach. Cont’d
• Don’t ask the consumer to design your product or service. They can tell
you what they don’t like, but not what to do. A camel is a horse designed
by a committee.
• Yes, analyse all the data by all means, but remember that insight is what
you’re after, not an MBA thesis.

24. And finally,
• “As long as market research is seen as a cost and a staff function, it will
never meet its potential. Market research has to deliver practical home
runs, insights that pay off far out of proportion of the expense and time
invested.”
• “Stories rule. Stories make us vote, or buy an iPod or give money to a
charity. Stories trump science every time.”
“Seth Godin”