Most marketers and consumer researchers today place a high value on discovering “consumer insights.” Many new company titles include “insights” or “consumer insights” as part of their title. A new group of research methods are emerging or becoming bundles under “insight tools.” Thus, it would be difficult to argue that the search for consumer insights is unimportant to marketers today. But how important is uncovering a consumer insight really? How much are marketers willing to do to uncover and act on a consumer insight? What is the ultimate value of having a consumer insight?

In the Winter 2008 issue of Marketing Research Marco Vriens and Rogier Verhulst provide their view on the value of consumer insights.

“Why do insights matter and how can we think about this somewhat elusive concept? Insights matter because there is plenty of evidence that supports the contention that decisions informed by insights are better decisions and are more likely to lead to a competitive advantage.”

This notion of having a consumer insight as a competitive advantage is a useful way to gauge the value of an insight – that “a-ha” experience that translates into a successful go-to-market effort. A few recent examples are instructive. Apple's highly successful iPhone is a stunning example of a consumer insight helping to create a competitive advantage in the crowded, highly competitive mobile device category. The majority of the competitors marketed their devices on the basis of price or matching a new feature, like picture-taking, introduced by competitors. Apple uncovered the insight that the most emotionally engaging part of a mobile device experience for many people was a sensory one – the touch and sight as well as sound. It was not operational features. The iPhone with its multi-faceted touch screen took the competition by surprise and delighted consumers. The global success of the iPhone has added significant new revenue to Apple (and to its partner, AT&T) and enhanced the overall market value of Apple.

The GEICO insurance brand had built a reputation for competitive auto insurance rates. The introduction of GEICO's online application site lowered already low prices. GEICO learned from research that many consumers wanted to benefit from even lower premiums but were intimidated by the thought of an online application process. GEICO's agency, the Martin Agency in Richmond, had the consumer insight that they needed to dramatize the ease of applying for GEICO's low on-line rates without insulting the intelligence of potential customers. The insight led to the now famous “Caveman” campaign – signing up with GEICO: So simple a caveman can do it. This campaign based upon a powerful consumer insight has widened GEICO's market share lead.

A final example of a company gaining a competitive advantage based upon a powerful consumer insight is Cisco. Cisco is the global leader in networking hardware and software for the internet and corporate intranets. Cisco had concerns that customers and stakeholders didn't have a strong commitment to the Cisco brand; they merely benefitted from their technology. Cisco commissioned OZA to conduct deep research with customers to see how to better engage them with the Cisco brand and strengthen their commitment to Cisco products and services long-term. Using the ZMET technique, Cisco and OZA learned that the core meaning of Cisco was enabling the internet. The insight emerged, however, that the essence of the internet was human (not technology) – connecting people to people and people to information and ideas. This led to a redesign of the Cisco logo and a successful campaign built around the insight of “human networks.” Cisco has increased its market leadership and, importantly, expanded awareness of its brand.

Clearly, uncovering a powerful consumer insight can lead to a valuable competitive advantage – in a new product or service, a more engaging campaign, or a complete repositioning of a company to potential customers. There are numerous examples beyond the scope of this short thought piece showcasing the competitive value of a consumer insight. Two recent books, Marketing Mavens by Noel Capon and Learning From Winners by Raymond Pettit are filled with other examples.

There is, however, to my way of thinking, another interesting perspective on the value of a consumer insight. That is the cost of an opportunity lost because you missed out on an insight or had an incorrect insight driving your strategy. A vivid example of missing out on an insight and holding onto an incorrect one was the recent presidential election. Senator McCain and Governor Palin missed out on the insight that most people wanted real change, and they held onto an incorrect insight for far too long, that most people were not convinced about climate change and energy independence.

Detroit also held onto a perception that few consumers were interested in fuel efficient, high mileage cars until the success of the Prius from Toyota and the growing success of Honda. Interestingly, when GM, Chrysler, and Ford finally responded by introducing hybrid technology they missed out on a critical consumer insight that Toyota understood by marketing the Prius. Toyota understood that consumers deeply committed to saving the planet by lowering CO2 emissions wanted others to see their commitment. Thus, the Prius was a hybrid-only model that looked different outside and inside from any other car on the market. You couldn't mistake it for anything but a new generation hybrid car. GM on the other hand initially introduced hybrid as an option on several of their best selling SUVs. Another example of the cost of missing a consumer insight involved the two leading coffee brands from the ‘70s, ‘80s, and ‘90s – Maxwell House from Kraft and Folgers, formerly of P&G. Both Maxwell House and Folgers had tracked a steady decline in coffee sales in the late 1980s and early ‘90s. They interpreted the sales decline in grocery stores as declining interest in coffee drinking. Starbucks saw a huge opportunity in coffee and had the consumer insight that supported their growth strategy. Starbucks learned that the decline in coffee sales was a decline in at home consumption. The opportunity was outside the home as CEO Howard Shultz observed in street cafes all over Europe. Starbucks is now the leading coffee brand through their cafes. Kraft, the maker of Maxwell House, now distributes Starbucks in grocery stores.

A final example of the cost of a missed opportunity is in the farm seed category. Since the beginning of seed brand marketing, the proven strategy for selling farm seed was either proven yield or pest resistance (and sometimes both). Thus, as everyone promised the same thing, over time distribution and price became the drivers of marketplace success. Syngenta (manufacturer of NK Seeds) wondered if there was another possibility to sell seeds which could maintain higher profit margins. OZA, working for Syngenta, uncovered the insight that for many farmers what they did was a calling, a life journey than was more than just another job or business. This led to an award-winning ad campaign, “Born to Farm,” that helped Syngenta make a powerful emotional connection with farmers and protect their profit margins. Competitors continue to sell yields and engage in serious price competition. A true opportunity lost and a gain for Syngenta.

Consumer insights do matter and are worth real money and customer loyalty to the marketer who uncovers a rich insight that can deliver a competitive advantage or point to an opportunity everyone else has missed. You have to dig deeply to get them and engage in “workable wondering” to apply and act on them. It often begins with hunches, new questions or observations, but it always requires some deep insights from customers. Jerry Zaltman, co-founder of OZA, believes that in order to discover deep insights about customers, you must get deep information from them. When you do land on a rich, deep consumer insight you will find incredible value.