CUSTOMERINSIGHT &ANALYSIS

15.814Marketing Innovation

Renée Gosline

September 23, 2021

ACCOMPLISHMENTS AND PLANS

Learned foundational frameworks of marketing:• 3 criteria of innovation (NSV)• 3C-4P (5Cs, 5Ps) theory• STP• Chosen the innovation for Action LearningNext: toward quantification• Attributes & Conjoint• Derive value from customer needs – analytics

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WHERE WE ARE

Segmentation, Targeting, Positioning

Price

Marketing Tactics

ImplementationProduct

Place

Promotion

CompanyCustomer Competitor

Marketing Analytics

Marketing Strategy

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TODAY’S TOPICS

How to uncover customer needs?• A taxonomy of methods• Volunteer opportunity• More (optional) readings on Canvas

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SPOILER ALERT: TAKEAWAYS

• What does a customer need? • The best person to answer is the customer

• Listen to what they say, observe what they do• Make innovative use of the latest technology

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CUSTOMER INSIGHT

Why did they do that??

Surprise and delight!

Challenge• Listen deeply• Avoid the voice of the company• Customers are often not like you

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HOW TO UNCOVER CUSTOMER NEEDS?

From what they say(stated preferences)

• Interview and survey• Social listening

From what they do(revealed preferences)

• Purchase data• Customer journey data

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From what they say

From what they do

STATED PREFERENCES

FOCUS GROUPS.FOCUS GROUPS?

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INTERVIEW

• In-depth conversation with (potential) customers• A proven market research method• Still cannot be replaced by machines

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INTERVIEW – BEST PRACTICE

• Take the customer, not company, perspective• Listen more, talk less

• Listen deeply for meaning • “Tell me more,” “what does that mean to you?”

• Keep sample representativeness in mind• Listen outside your comfort zone

• How many interviews are enough?• Rule of thumb: until you can predict what will be said

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HOW MANY ARE ENOUGH?

Rule of thumb• keep listening until you can predict what will be said

SURVEY

• Batch collection of answers from customers• A proven market research method• Can collect a large sample of data quickly• Can be easily implemented digitally

• E.g., Qualtrics, Canvas, Sawtooth Discover, Amazon Mechanical Turk

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SURVEY DESIGN MATTERS

Example: On a 1-to-10 scale, how important is it that a business school…• Leads to high employment rate • Hires excellent teachers• Is known worldwide• Provides collaborative atmosphere• Is highly rated

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CAUTIONARY TALE

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WHICH ATTRIBUTE IS MORE IMPORTANT?

Domain Attribute X Attribute YBaseball players Batting average Home runsConsumer products Price Quality Intelligence Math skills Verbal skillsWeight loss Diet Exercise Wildlife Bears Salmon Restaurants Food Service Jobs Salary Vacation daysRomantic partner Attractiveness IntelligenceRectangles Length WidthProfessors Experience Enthusiasm

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PAIRWISE CHOICE

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EXAMPLE

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EXAMPLE

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SURVEY – BEST PRACTICE

• Make it easy for customers to answer• Simplify the survey as much as possible• Show a progress bar – it depends• Ask “what are the ___ most important needs to you” as

opposed to “how much do you value a need”• Provide the context (e.g., picture, video) • Provide incentive for truth-telling, if feasible

• Can be extrinsic or intrinsic motivator• Beware confounding variables; but can test for this, parse

out, and extrapolate• Pay attention to survey access equity

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REVEALED PREFERENCES

SOCIAL LISTENING

• Can be efficient if other in-depth work is not possible

• Mine the vast amount of data on social media (historical data)

• Track what customers are saying about your product, company, or industry

• Can uncover customer needs in an “organic” way

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MINICASE: SIMPLISAFE

Question: how would you use its Amazon review data?

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GATHER RAW DATA

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FROM DATA TO INSIGHT

• Insight is key• Example of an easy method: an automatic “word

cloud” generator that gives you the frequency of word usage in any text• https://www.wordclouds.com/• Very basic, though there are many data analytics

methods • What insight can you generate?

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WORD CLOUD OF ALL REVIEWS

What might be the limitation(s) of this method for understanding consumer reactions to Simplisafe?

Variable: Measuring frequency:

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OF 5-STAR REVIEWS

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OF 1-STAR REVIEWS

Notice contrast: noisy conjecture but can augment other methods

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AMAZON:DOING THIS FOR YOU

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WHAT CAN WE LEARN FROM SOCIAL LISTENING?

What customers dislike about a product:• Identify “pain points” and innovation ideasHow customers think of competing products:• Develop your perceptual mapWhich product features drive purchase decisions:• Isolate key needs/features for Conjoint analysis

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PURCHASE DATA

Advantage: actions speak louder than words• Historical data; regression* analysis• Link various customer needs to actual purchaseChallenges: • Purchase data are not always available• Innovation opportunities may be obscured• No data for new products (or even existing)• Aggregate data, not individual purchase data• Cost to obtainSolution?: look for proxy data (e.g., Amazon sales rank, number of reviews, number of downloads)Challenge: you may not know the complete list of customer needs that drive purchase decisions• Solution: supplement with stated-preference data

*or variation on the theme35

AMAZON SALES RANK

Comprehensive listDIY historical data set with sales rank as a proxy

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PURCHASE DATA

Advantage: actions speak louder than words• Historical data; regression* analysis• Link various customer needs to actual purchaseChallenges: • Purchase data are not always available• Innovation opportunities may be obscured• No data for new products (or even existing)• Aggregate data, not individual purchase data• Cost to obtainSolution?: look for proxy data (e.g., Amazon sales rank, number of reviews, number of downloads)Challenge: you may not know the complete list of customer needs that drive purchase decisions• Solution: supplement with stated-preference data

*or variation on the theme 37

CUSTOMER JOURNEY DATA

A customer’s entire journey prior to the purchase decision contains valuable information too• Ethnographic observation• Digital trace

• Conversion data (upcoming Promotion lecture)• Location data

• Neuroscience and other new developments

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GOSLINE ADDENDUM #8

Consumers are people.Data ethics:• Privacy• Transparency• Biased ML• Vulnerable populations

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Use ethnographic methods• “Live” the customer

experience• Observe customers in their

natural choice settings • Uncover hard-to-articulate

customer needsStill cannot be replaced by machines

ETHNOGRAPHIC OBSERVATION

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SHOPPING PATH DATA

Question: how would you use shopping path data for marketing?

IKEA: BEHAVIORAL SCIENCE

“Bulla Bulla”: Scarcity effect• Bias: Volume = cheap

“Open the Wallet” section• Bias: Anchoring

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NEUROSCIENCE

Use magnetic resonance imaging (MRI) to record activation inside the brain, and link it to various stimuli

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GOSLINE ADDENDUM #9

• No one method is a panacea.• Check bias, even toward quantitative methods• This is not quant vs. qual

• Embrace mixed method approaches

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MACHINE-HUMAN HYBRID:USER-GENERATED CONTEXT

Step 1. Identify Informative Content

Step 2. Sample Diverse Content

Step 3. Formulate Customer Needs

Machine Learning

Human Judgment

TAKEAWAYS

• What does a customer need? • The best person to answer is the customer

• Listen to what they say, observe what they do• Even better, do both

• Make innovative use of the latest technology• Unleash your imagination

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