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Deep customer insights
What customer insights are and how
can they be applied
Taneli Heinonen
mail@taneliheinonen.com
www.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.com
Taneli 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-19717
http://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 information
Taneli Heinonen
mail@taneliheinonen.com
www.taneliheinonen.com

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Deep Customer Insights, Laurea, October 2015

  • 1. Deep customer insights What customer insights are and how can they be applied Taneli Heinonen mail@taneliheinonen.com www.taneliheinonen.com
  • 2. 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.com Taneli Heinonen, Insight Delivery
  • 4. 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?
  • 5. 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
  • 6. The promise of big data – can huge digital data sets provide important knowledge Customization based on the dataVariety and quantity of existing data
  • 7. 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-19717 http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory
  • 8. 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
  • 9. 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
  • 11. Customer Insights as way of regaining clarity in the fog Photo credits: Guru Sno Studios. Flickr.com
  • 12. Where does the fog come from and why has understanding the customers become so important? Photo credits: Ian Muttoo. Flickr.com
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. 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
  • 17. From collecting data to building wise decisions
  • 18. We buy a lot of things, but we rarely know why we made the choices we made. Photo credits: OKNOVOKGHT. Flickr.com.  
  • 19. 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
  • 20. Insights as wisdom to make right kind of business decisions
  • 21. Wisdom helps in defining right problems to solve Double diamond model of Design Council UK
  • 22. 1. Discover 2. Define 3. Develop 4. Deliver Insight generation is the basis of the creative process Insight Design
  • 24. 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
  • 26. Combining Hifi-sound systems and interior design to support couples in their negotiations about the home INSIGHT BEHIND A PRODUCT
  • 27. What kinds of insights you can see behind the Airbnb service? INSIGHT BEHIND A SERVICE
  • 28. Clarity and right perspective give direction to creative work Photo credits: Roger. Flickr.com
  • 31. Different viewpoints to the everyday life of people People StructurePractice
  • 32. 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?
  • 33. 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?
  • 34. 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?
  • 35. When understanding goes wrong in business…
  • 36. When understanding goes wrong in business…
  • 38. 1. Discover 2. Define 3. Develop 4. Deliver Insight generation is the basis of the creative process Insight Design
  • 39. 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
  • 40. 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
  • 41. 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.
  • 42. 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.
  • 43. 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.
  • 44. 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.
  • 45. 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
  • 46. 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
  • 47. 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
  • 48. 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
  • 49. Thank you! Contact information Taneli Heinonen mail@taneliheinonen.com www.taneliheinonen.com