Research teams are increasingly under pressure to prove their value to the organization. Traditionally seen as a cost center, more research departments are being asked to demonstrate their contribution to revenue and sales. To protect budget and headcount, research leaders need a strategic approach to deliver more value to the organization and measure that impact in a systematic and credible way.
But making the connection between research activities and the bottom line is neither easy nor always straightforward. There is little doubt that customer insight is a strategic part of the business, but research leaders should be able to show ROI in a language that CMOs and other C-suite executives can understand.
Many smart companies have already started the journey towards ROI measurement. As the following examples show, investing in a customer intelligence platform pays off in many ways, and so there are multiple potential ways of showcasing the impact of customer intelligence.
1. Increase in revenue
Companies are uncovering new and innovative ways of monetizing research. Some brands, for instance, use insight communities to offer research services and data to clients and partners. For example, the media organization POLITICO has uncovered $5 million in new, incremental revenue within 8 months by incorporating audience feedback into its sales team’s pitches. Other brands use feedback to help advertising partners prove campaign ROI, which strengthens partnerships and increases ad sales.
Building buzz and awareness is another approach. For instance, NewsCorp Australia, a 2016 Visionary Award Finalist for Asia Pacific, runs many studies within its insight community, engaging over 5,000 media consumers regularly. The media giant gathers feedback on advertising, editorial content and product ideas. In one notable example, insight caught the attention of the local media and potential clients. Research from this one study alone drove more than $500,000 in advertising sales and $3.2 million in open opportunities.
Research from this one study alone drove more than $500,000 in advertising sales and $3.2 million in open opportunities.
2. Acceleration in product timelines
In the competitive consumer goods market, there’s only one thing as important as having great products: speed. Keurig Canada has both, thanks in part to the Keurig Coffee Insiders Community, an insight community of more than 10,000 coffee fanatics.
According to Eileen Chen, consumer insights analyst from Keurig Canada, the company uses the community to ensure that consumer feedback is included in every step of the innovation process. From concept testing to post-launch surveys, Keurig owners provide ongoing and real-time feedback through the community.
The community’s biggest impact has been on project timelines, which has gone down by an average of three weeks per product. Sales are also strong. For one product line, the company used customer insight in every step of the innovation process, helping launch a product that exceeded sales forecast by 42%.
3. Rise in audience size
Marketing’s goal is to engage the right audience at the right time with the right message. The ability to do that effectively drives KPIs that ladder up to revenue.
That’s exactly what PBS is doing with the help of Viewers Like You, its insight community of more than 14,000 PBS viewers. The highly-trusted organization engages the community to get feedback on programming and improve various aspects of marketing campaigns. For example, community members helped pick the tagline for PBS’ campaign for its coverage of the 2016 U.S. Presidential Election. Trusting the feedback of its audience paid off for the organization, which has seen a 22% increase in ratings as a result.
Impressively, PBS held on to that ratings boost even after the election—a testament to the quality of the insight of its viewers.
4. Reduction in research costs
The ability to scale customer engagement is a huge motivation to launch an insight community. Rather than waiting for research reports or managing focus groups, cloud-based platforms provide a faster, more cost-effective way to engage with thousands of customers in real time. In addition to the speed and scale of insight communities, there’s also the potential to save millions of dollars.
Take the leading manufacturer in power tools, DEWALT, for instance. The brand has essentially replaced impersonal and expensive methods of traditional market research with its award-winning insight community, the DEWALT Insights Panel. DEWALT saved over $1 million in research costs in 2016 alone, and close to $6 million since launch .
In financial services, Sun Life Financial has saved close to $1 million in research costs, according to Lindsey Collela, associate director of insights integration. The company uses two communities to engage brokers and employees, using feedback from both communities to improve marketing and sales materials.
The company saved over $1 million in research costs in 2016 alone, and close to $6 million since launch.
5. Boost in customer satisfaction metrics
The business world has seen the rise of customer experience (CX) over the last decade. Realizing that keeping customers happy is the best way to drive retention, many companies have invested more time and resources in CX.
For example, brands are beginning to map out the entire customer journey, filling holes and overcoming challenges by bringing customers into the conversation. They’re using this same method to determine more effective ways to increase brand affinity. Innovative companies use customer feedback to complement other measures of CX, including the Net Promoter Score, share of wallet and customer satisfaction surveys.
One example comes from an unexpected industry: utilities. In our recent e-book, The 10 Smartest Brands: How They Use the Competitive Advantage of Customer Intelligence, Alliant Energy, a publicly traded electric and natural gas utility based in the Midwest U.S., shares how it tests and validates new offerings and services before launching to the larger market. Through its award-winning insight community, the Power Thinkers, Alliant engages with over 1,800 residential customers, who provide ongoing feedback on topics like outage communications, bill inserts and website enhancements.
Insight from Power Thinkers has resulted in measurable improvements in customer experience. For instance, Alliant Energy’s regulatory complaint numbers have decreased by 50% over the last two years. Meanwhile, customer satisfaction increased by 15 index points and the company’s NPS got an 88% boost.
Customer satisfaction increased by 15 index points and the company’s NPS got an 88 percent boost.
Customer intelligence’s impact is significant—and measurable
These are just some real-world examples of how companies measure the business impact of customer intelligence. NewsCorp Australia, DEWALT, Keurig Canada and Alliant Energy illustrate that committing to authentic engagement leads to enhanced brand affinity, and ultimately, higher quality decisions that drive KPIs that matter. Engaging with customers is a smart—and necessary—business move for all companies today.
Note: A version of this article was first published on November 2016. This post was updated with new information and examples.