Beyond ROI: Three strategies for demonstrating the value of customer insight

Insights teams have the capacity to deliver one of the highest ROIs of any department within a business. An effective insights team has the ability to future-proof a company, playing a strategic, not just tactical, role in driving change. However, insights teams sometimes struggle to be seen as credible business partners and their valuable input is often overlooked, especially when their impact is measured in the wrong way. The 2019 “How to demonstrate the value of investing in customer insight” study by ESOMAR looked at the best way for insights teams to prove the value of investing in customer insight, reviewing relevant literature and conducting 20+ in-depth interviews with industry leaders from major organizations including ANZ, Diageo, eBay, Ferring Pharmaceuticals and Heineken. From the findings, ESOMAR deciphered three (overlapping) strategies that insights teams can pursue to perform highly and showcase the value of insight.

The problems with ROI metrics

The qualitative interviews with industry leaders completed during the study found that there is a nervousness about solely going down the ROI route in assessing the value of insight. Insight plays a complex and creative role in putting the customer at the heart of business decision-making, so evaluating by a specific set of criteria, especially monetary criteria, has the potential to do the insights team a disservice and equally promotes the pursuit of unhelpful activities within the team. As one industry leader interviewed for the study explained, “The ROI model leads us to cutting budgets; it’s a deficiency model of insight. It’s not an abundant growth model or concept.” Another industry leader explained it this way: “We only implement strict financial ROI measures on projects where we can predict a product of service volume or value change with what we did.” Although insights teams are predominantly looking for long-term impact over short-term benefit, there are certain situations in which ROI-style metrics can be useful.

Nevertheless, insights teams need ways to prove themselves as a valuable resource for long-term strategy within the company. It is essential that they’re able to prove that they provide strategic, future-proofing value to a company. If they’re unable to act as a credible business partner providing visions for future strategy then they risk becoming irrelevant. The ESOMAR 2019 ROI study looked at the best ways of doing this.

The best approaches to prove the ROI of insights

The ESOMAR ROI study found that the first strategy client-side insights teams should use in order to showcase the value of insight is to focus on future-proofing the organization. As one industry member commented, “We need to move away from the model of risk mitigation towards future-proofing. Old-fashioned return on investment measures are no longer fit for purpose. We must talk about the future return on investment.”

It is the insight team’s primary role to equip the organization to deal with disruption and change. This means seizing every opportunity to demonstrate involvement with strategy in order to deliver value. When the insights team is perceived as a purely reactive resource, it runs the risk of being viewed as a cost center. Instead, insight teams should be the go-to team when it comes to identifying powerful strategic insights.

When it comes to demonstrating that the marketing research function is uniquely equipped to prepare the organization for what’s ahead, insights teams should ask the following questions:

• Strategic foresight: Are you building a reputation for being able to spot and seize, in a timely way, critical opportunities that lie at the heart of driving value and growth in the business?
• Proactive not reactive: Where are you on the journey from being a market research, order-taking team on the fringes of the business to being a central, proactive facilitator in driving change?  
• Commercial acumen: Are you constantly demonstrating the business impact that customer insight is having on the business? Are you showcasing, to all senior management throughout the organization, the business acumen and commercial awareness of the insight team, so that it is clear you are a value creator and not a cost center?

The ESOMAR ROI study found that the second strategy client-side insights teams should enact in order to showcase the value of insight is to gain access to and to build a positive reputation with the C-suite. Taking this action will inform the insights team of the business strategy and help to secure the team’s involvement with it, allowing the team to provide powerful and meaningful customer insights that can inform future thinking. This positioning will also help customer insight professionals gain access to all the sources of data we now use to derive a customer insight.

Insights teams should analyze these areas related to their position within the business:

• Customer-centricity: Where are you in terms of being seen as the lighthouse – the North Star within the business – when it comes to understanding customer behavior? Are you at the center of creating an organization genuinely committed to customer-centricity?  
• Holistic analysis leadership: Have you secured access to all the customer insight data (and relevant ancillary data) and are you building a reputation as the expert in integrating the (pertinent) evidence into a holistic picture to tell the customer story?  
• Be the insight champion: Are you building a reputation as being the insight champion? Do you have the strategic vision and forensic energy to unearth powerful insights that tell the company how to best change and influence customer behavior? And are you leading the way in the adoption and use of insights from digital, artificial intelligence and machine learning tools?

The research also highlighted the importance of education and communication more widely within the business. One industry leader explained how they use webinars to reach wider stakeholders and educate them on the value of insights, while others spoke about using case studies and storytelling to demonstrate the long-term, not just the short-term, value of insights. This means insights teams need a broader set of skills than just data analysis. As one insights professional ESOMAR spoke to pointed out, “There’s no point in having a silo of really intellectual people who are so interested in their research but incapable of communicating and inspiring others to act.” Another said there’s a risk that the research industry as a whole isn’t bold enough and should do more to tell stories about how they add value. By telling compelling stories that stress the future-proofing, strategic role that the insights team plays to both the C-suite and wider groups of stakeholders, teams can add value that isn’t necessarily quantifiably measurable.

Lastly, the third strategy insights teams can use to demonstrate their value is to use a mix of success criteria, not just ROI metrics. Our research showed a skepticism around relying solely on ROI metrics; one interviewee said, “You can get an ROI measure to see if there’s been a sales uplift on a particular initiative but an ROI measure won’t tell you much about whether you contributed to the longer-term strategic view. You need softer measures to deliver this.”

To show the true value of insights, it’s essential that insight teams are not just using ROI metrics and benchmarking to demonstrate value. Instead, teams should focus on confidently showcasing the impact of insight using a mix of hard and softer measures, especially when senior stakeholders are evaluating impact. These measures do have a part to play but they only provide a narrow assessment of the role insight is playing. Again, the study showed the concern that taking the ROI route alone would limit customer insight to only being seen as a cost center rather than a value creator.

In regard to the mixed criteria of metrics, insights teams can:

• Avoid the tyranny of metrics: Can you resist calls to use ROI metrics as the sole measure of your effectiveness? How close are you to hitting the sweet spot in using a mix of metrics and more qualitative measures to demonstrate the success and effectiveness of insight?
• Tell the insight story: Are you regularly disseminating compelling insight success stories throughout the whole organization’s management (case studies demonstrating the value of insight)? Where are you, in terms of socializing your success (deploying innovative communications techniques to demonstrate the way insight is setting the future direction of the business)?
• Create a learning organization: Are you taking responsibility for creating a learning organization with insight at the center of an agile, customer-centric culture that is capable of continually adapting to change?

Evolving the insights team to optimize ROI

So, what immediate actions can insights teams take to make sure they’re implementing these strategies? Firstly, insights teams need to remember that insight doesn’t end with a presentation; rather the story starts with a presentation and must be followed by closely monitored and mentored implementation. Insights teams need to find a way to secure a dialogue between themselves and the stakeholders they’re trying to contact and create impactful stories and case studies to communicate insight success with these groups of people. What’s more, teams need to make sure they have systems in place to ensure that insight messages have landed. Follow up on your powerful customer insights and confirm they are acted upon and implemented within the business. It is vital you take personal responsibility for driving action and implementation.

Networking across the business is also crucial in order to influence these target groups. This is about creating a customer insight culture throughout the organization. Why not run interactive, cross-disciplinary customer insight workshops or create an insights newsletter that reinforces the fact that your team is at the heart of driving customer-centricity. However you choose to communicate, it’s important that you go large and commit.

The results of the study show that enhancing our skillset as researchers remains on the to-do list. We need insight professionals who are comfortable leading the strategic dialogue with stakeholders and making insights easily consumable within a business by stakeholders of all levels. These skills are essential for us to create actionable insights and influence change.

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