George S. Day and Christine Moorman

Flying Blind: Why Market Insights Get Ignored

Friday Jan 21, 2011

Despite the compelling benefits from using market insights to inform and shape strategy, most firms are ineffective at consistently gathering market intelligence, making sense of it, and then acting on it. Let’s look at some of the problems that plague firms.

Many firms choose not to gather market intelligence in the first place or do so in a haphazard fashion. Managers are often overconfident, believing they know their markets so well that there is nothing to learn from their customers. Technology companies are especially prone to agree with an opinion that Ted Levitt attributed to engineers: “Consumers are unpredictable, varied, fickle, stupid, short-sighted, stubborn and generally bothersome.” This is surely an overstatement, and it dismisses the reality that markets are complex and that sustained hard work is needed to comprehend them.

Companies that do gather market data may fail to devote the time and talent required to collect meaningful information. Rather, key market insight activities are either outsourced or pushed into a support function. This virtually guarantees a lack of influence and squanders the potential of engaging the entire organization in listening and responding to customers. Every employee must be mobilized as a “listening post.”

Once market intelligence has been collected, firms fail to effectively analyze the data and translate market insights into actionable initiatives. Because market insights are foundational and often “obvious” once someone has done the hard work to unearth them, their strategic value can be diminished.  This is why it is important to clearly state what is known and not known before doing insights work.

Furthermore, companies keep what customer information they do gather in silos. As a result, it is impossible to “connect the dots” and arrive at a 360-degree view of the customer experience. Instead, the portrait of the customer is splintered into tactical-level fragmentary pictures.

Outside-in companies, on the other hand, invest in and profit from market insights. They understand that developing a strategy without deep market insights is like shooting at a target without aiming. Outside-in companies invest in a disciplined market insights capability, and learn to ask and answer insightful questions about customers (see blog entry from December 10), competitors (December 19), channel partners, and other market forces.  How does your company maintain a healthy focus on market insights?

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