How Insightful are Your Customer Insights?

11 May How Insightful are Your Customer Insights?

The reason our stories, messaging and marketing fall flat is that the people we want to serve are not motivated by our need to be seen, to be heard or to close a sale. People—your audience, customers and clients—are motivated by their need to be seen, heard and understood.
Bernadette Jiwa, The Right Story

Despite the amount of money companies spend on customer insights, most companies don’t value true insights.

Insights should tell you something new; they should change the way you think. Yet, most companies reward predictable results instead of game changers.[1. Gary Klein, Seeing What Others Don’t, 2007.]

On average, companies value “insights” that confirm what they’re already doing. At best, they want “insights” that only slightly modify what they’re already doing.

But, are these insights really insightful?

In a predictability-driven world, numbers are valued over understanding: as long as customers are behaving in a way that can be calculated, companies put little value on why they’re behaving that way, even if understanding why would open up game-changing opportunities.

Models of behavior that are good enough trump models that have the potential to radically alter the business. In this world, the uncertainty of profound change lacks the value of slight improvements.

True insights only arise out of environments that encourage them. This isn’t only because of a lack of encouragement; it’s also because our brains are wired to make conclusions as fast a possible: if it didn’t hurt us in the past and it continues to produce results, we’ll view new information as a confirmation of how we’re already behaving.[2. Anthony Fitzsimmons, “Catching confirmation bias before it catches you: It’s far too easy to jump to conclusions” in Management Today (2018).]

Scientists call this tendency confirmation bias: we seek and interpret information in ways that support existing beliefs.[3. Raymond Nickerson, “Confirmation Bias: A Ubiquitous Phenomenon in Many Guises” in Review of General Psychology (1998).]

Confirmation bias is likely rooted in an evolutionary advantage: responding to dangers in the environment is much quicker and more efficient if it is interpreted in the context of something we already know when that interpretation has been good enough in the past.[4. Joshua Klayman and Young-Won Ha, “Confirmation, Disconfirmation, and Information in Hypothesis Testing” in Psychological Review (1987).]

In other words, confirmation biases minimize errors when needing to make quick decisions.[5. Martie G. Haselton “The Paranoid Optimist: An Integrative Evolutionary Model of Cognitive Biases” in Social Psychology Review (2006).]

But, confirmation bias can make us ignore valuable information that would let us come to a deeper understanding. As a result, it reinforces the predictability companies value and causes us to block information that would lead to true insights.

This tendency is further compounded by two other factors operating in the business environment:

1. Shared Mental Maps: Groups of people naturally develop a common worldview. This worldview helps define who is inside and who is outside of a group. When a group has a shared worldview, it is unlikely to accept an outside viewpoint, even when data backs it up (I’ve had clients make me re-run valid surveys because they didn’t believe the results).[6. Anthony Fitzsimmons, “Why great leaders seek out uncomfortable truths” in Management Today (2018).]
2. Meetings, Meetings, Meetings: The lack of time people feel they have to accomplish the work they need to get done—often because of what feels like an unending stream of meetings—enhances the tendency to save mental strain and default to cognitive shortcuts like confirmation bias.[7. Daryl Wilson and Jay Pratt, “Confirmation Bias in Visual Search” in Human Perception & Performance (2015).]

True insights are neither the natural tendency of organizations—because predictability is valued over the game-changing and time-crunched schedules create quick decision making—nor the natural tendency of people—because of the way they default to processing information.

When competitors also are engaged in business as usual, there’s even less of an incentive to create radical change.

The problem is that in the complex, fast-paced environment today, a competitor that starts with a game-changing idea can overtake you before you realize it’s too late. Think about how the once-dominant Sears failed because they didn’t adapt to what customers wanted in the face of the changing business environment in the same way that Amazon did. Or, how Uber came out of left field and disrupted the stable taxi business that was over a hundred years old.

Next time you engage in a customer insights initiative, consider if you’re really trying to learn something new. If you’re not, you may be better off saving your research money, because you may need extra capital to survive in the face of a competitor that comes up with a radical understanding of your category.

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