We recently interviewed 15 impressive brand leaders at a range of companies, including some of the largest in the world. One major finding was pretty startling: brand managers are not happy with their unhealthy data diets.
Despite the diversity of organization type, the problem is consistent and widespread. Point-of-sales data is being ‘consumed’ at a frequent rate, but consumer insight data is gathered and used far less frequently.
This is akin to eating carbs for all of your meals while binging on protein once or twice a year. You might be getting enough “calories�? to fuel activities in the short term, but you’re actually not getting the nutrition you need to build the “brand power�? muscle needed to succeed in the market.
Why is this such a common affliction impacting some of the smartest people we know? We believe it’s at least partially a systemic issue with some very really challenges that need to be overcome. But we think it’s not only possible to improve an organization’s data diet but also vitally necessary to growing a brand in a competitive market.
When we refer to consumer insights, we’re referring to data about customer perceptions that explains their behavior. At Vennli, we’re specifically focused on how customers choose between competitors, but essentially we’re talking about actionable data that drives decisions to improve competitive position and brand health. When brand leaders don’t have this type of insight, they are operating at a handicap.
The Danger of a Diet that Lacks Consumer Insights
A well-balanced data diet is essential to a healthy brand. Different forms of data serve different purposes and inform different business decisions. The danger of relying too heavily on one type can be illustrated by considering the famous Four P’s (Pricing, Place, Promotion, and Product). Logically, brand leadership is charged with the full health of their brand, managing all four P’s to position their brand optimally in their market.
Sales or consumption data is often a diagnostic for the first two P’s – Pricing and Place. Trend analysis can reveal when pricing changes might be affecting sales volume or if sales volume is really indicative of distribution (i.e. Place) problems. If this month is lower than last month, you better get on the phone with your sales team to see if your supply chain is having an issue or if the competitor has dropped their prices. Sales data can also help analyze pricing-related promotions, such as coupons, and demand forecasting in more mature markets.
However, sales data also leaves significant blind spots with non-price-related Promotion and Product issues. “It tells me the what but not the why�? was a constant refrain in our interviews – meaning it tells you what behavior took place, but not the reasons why consumers took those actions… so you’re left playing a guessing game.
When you know the “why�? behind consumer behavior, you can develop targeted marketing messaging aimed at exactly what drives consumer choice. You can prioritize your roadmap to focus on features or aspects of your product or service that consumers find most valuable. In other words, you can mitigate risk in your decision-making by testing your “guesses�? with consumer insights.
Our interviews revealed that the basic diet of a brand manager primarily feeds the first two P’s of basic brand management. The other two require a different type of regularly ingested nutrition to ensure brand health.
Do Brand Managers Know They Are Starving for Insights?
Yes and no.
During our interviews, we used a 1-5 scale to measure the level of ‘pain’ brand managers felt when it comes to having enough of the right data to make good decisions. Respondents got a point for each of the following criteria:
- Has a problem
- Recognizes they have a problem
- Searching for a solution
- Has a clear vision of the solution
- Has set aside budget for the solution
Just like with any other unhealthy habit, the first step is recognizing you have a problem. Someone with a 5 out of 5 is likely to address their problem quickly. They know they have an issue, have identified the solution, and have a plan for implementing it.
While not a perfect science, the average score for our interviews was somewhere between a 2 and a 3. This means that the average brand manager may recognize they don’t have all the data they need to make good decisions about the health of their brand, but they don’t yet know what to do about it. This is an uncomfortable place to be, because you’re dissatisfied with the status quo but stuck with it for the foreseeable future.
What’s the deal?
So if brand leaders know there’s a problem, why aren’t more of them acting to solve it? Of course, one could argue that it must not be that big of a problem if all of these smart leaders aren’t doing something about it. However, the same logic would say that America doesn’t have an obesity problem just because everyone isn’t dieting. There’s a deep bench of research showing that top-performing brands make data-driven decisions across all aspects of their business.
The lack of action must therefore be due to one of the three levers of behavior: motivation, capability, knowledge. Likely, there are many contributing factors at play – both individual and systemic.
One of interviewees at a Fortune 100 company said, “I might not be looking for more frequent sources of consumer insight because I’ve been trained not to expect it.�? Therefore, it could be because of a lack of knowledge regarding what to do about the problem.
But we also heard motivational reasons. One brand manager at a multinational company stated, “Cost-cutting measures abound, and it’s really driven a short-term focus for our team. Ideally, we’d be focused on building out our future pipeline, but we really end up focusing on current-year issues.�?
While they may know they need consumer insights and may even know of ways to obtain them, their day-to-day work doesn’t support it. Instead, they are pushed to focus on shorter-term metrics and tactics. Consumer insights are often best utilized for more strategic, far reaching decisions with impact in the longer term, so those organizations with a short-term focus are not as motivated to utilize them.
Capability problems were widely cited as well - the most important being budgets. Data can be expensive to obtain, and often budget isn’t set aside to research questions that pop up throughout the year. These types of insights can also be harder to obtain – especially if the people capable of obtaining them are in short supply: “It’s obvious we’d all like more insights more frequently, but managing the execution of them is difficult.�?
Contrast this with sales data, which is easy to get, use, and access, and it’s no wonder that it tends to be the go-to customer data source… but just because processed foods are convenient, doesn’t mean you can live on them alone for long without developing some serious health issues.
Solving the Bad Data Diet Epidemic
Market leaders are differentiated by their ability to evolve in line with changing customer needs – to agilely adapt to market changes. This requires customer focus and actionable data that drives better decisions. It requires a deep understanding about how customers make choices within the context of your competition.
Lagging consumption data may signal a change is happening, but it won’t tell you why. Big data and predictive analysis can be extremely valuable in modeling potential patterns… but nothing substitutes for insights direct from consumers about the drivers of their choice. These insights complement other data sources, bridging gaps and filling in holes in knowledge to inform marketing, product, and sales strategies.
It’s troubling that so many institutions are lacking a regular diet of these customer insights. The majority of brand managers are drowning in data, but they are dying of thirst when it comes to the insights they need to drive decisions about the longer term health of their brand. A diverse data diet is required for a healthy bottom line.
We’re conducting more research on this issue to fully understand the challenges facing brand managers and marketers across industries. Our solution makes it easy (and affordable) to obtain and interpret insights about how customers make choices. Vennli provides agile, ongoing customer insights to monitor changes in your market over time… in easily digestible formats. We’ll use the findings of our research to improve upon our solution and offer other resources to brand leaders to improve their success.
If you’d like to share your perspective, please email me at email@example.com.