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Deep Customer Insights, Laurea, October 2015
The document explores the concept of deep customer insights, emphasizing their significance in understanding consumer behavior and the shortcomings of traditional demographic models. It discusses the application of human sciences, qualitative methods, and behavioral economics in developing these insights to guide business decisions. The document outlines various methods for insight generation, including interviews, focus groups, and surveys, highlighting the need for a comprehensive approach to truly understand the complexities of consumer experiences.
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Deep Customer Insights, Laurea, October 2015
- 1. Deep customer insights Whatcustomer insights are and how can they be applied Taneli Heinonen [email protected] www.taneliheinonen.com
- 2. My background: fromsociology 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
- 3. Current business of customerinsights
- 4. Companies try todevelop 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 ofbuilding 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 ofbig data – can huge digital data sets provide important knowledge Customization based on the dataVariety and quantity of existing data
- 7. Behavioral economics asa 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 ofhuman 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 withinsights 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
- 10. Why are customer insightsimportant
- 11. Customer Insights asway of regaining clarity in the fog Photo credits: Guru Sno Studios. Flickr.com
- 12. Where does thefog come from and why has understanding the customers become so important? Photo credits: Ian Muttoo. Flickr.com
- 13. Change of societiesfrom 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 urbanizationchanges 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 operatewith 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 beenconsidered 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 datato building wise decisions
- 18. We buy alot of things, but we rarely know why we made the choices we made. Photo credits: OKNOVOKGHT. Flickr.com.
- 19. Insights as wisdomto 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 wisdomto make right kind of business decisions
- 21. Wisdom helps indefining 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
- 23. Definitions and examples ofinsights
- 24. Insights are crystallizedforms 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
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- 26. Combining Hifi-sound systems andinterior design to support couples in their negotiations about the home INSIGHT BEHIND A PRODUCT
- 27. What kinds ofinsights you can see behind the Airbnb service? INSIGHT BEHIND A SERVICE
- 28. Clarity and rightperspective give direction to creative work Photo credits: Roger. Flickr.com
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- 31. Different viewpoints tothe everyday life of people People StructurePractice
- 32. Building an understandingof 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 understandingof 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 understandingof 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 goeswrong in business…
- 36. When understanding goeswrong in business…
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- 38. 1. Discover 2.Define 3. Develop 4. Deliver Insight generation is the basis of the creative process Insight Design
- 39. Analytical approach fuelsthe 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 fordifferent 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 andcultural 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 helpyou 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 exercisesas 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 helpgather 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 away 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 forinterviews 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 fieldguide 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 allabout 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 TaneliHeinonen [email protected] www.taneliheinonen.com