There is no shortage of articles to illustrate how valuable employees are in sensing customer insights, and even more ink has been spilled describing the dangers of relying only on outside market research agencies.
But how can companies actually transform into an “Insight-Driven Organization”?
Recently, we worked with a client in the fashion industry, which wanted to investigate and address the root causes of missed sales opportunities. The need to operate more efficiently and engage customers in new ways were the main drivers of our client’s ambition to optimize the in-store sales effectiveness.
Rather than applying a traditional approach focused on the analysis of retail operations, we launched an employee-first exploration process. During in-store observations and interviews with store managers and sales staff, we uncovered, for instance, that – while salespeople did a good job pitching the collection, displayed products on the racks were unfit for the loyal customers.
When digging deeper, it emerged that the style and cuts were appreciated most by young women in their twenties or thirties – who accounted for a small fraction of our client’s customers. In fact, the average customer was a wealthy businessperson in their forties or fifties. Also, most pieces were one-offs like dresses in the top-price segment. Stores did not offer a wide choice: shirts or sweaters, for instance, were not included in the collection. While salespeople were fully aware of the gaps in the collection, such information was not exchanged in a structured way with the HQ merchandising and design team.
Isolating employees who are responsible for ‘thinking and making decisions’ in HQ offices from field workers is a common mistake, that often results in missed opportunities. In the case of our client, an elite group of merchandising, product placement and design experts were deciding the stock-keeping units (SKUs) in-store, based on sales spreadsheets and forecasted sales projections. There were few interactions or discussions with store managers.
After completion of the initial employee-first explorations, we designed an insight-driven process that would leverage the in-store insights and channel them back into the company’s product development cycle.
The new process entailed 4 main steps:
᛫ Establish accountability
One person in the design team was appointed as Chief Customer Insights (CII). The CCI was responsible for gathering in-store insights on a regular basis, storing them centrally, and channeling the most valuable ones back into the design and merchandising process.
᛫ Train the sensors
After designing the interview guide and supporting tools for customer insight collection, sales staff were trained on how to conduct deep explorative conversations with customers and capture them in an easy-to-use template placed in the cloud.
᛫ Apply a customer insight-driven decision making
Compared to the past, the merchandising and design team started using the insights gathered regularly by store managers to drive product placement and development decisions. The CCI attended all meetings – acting as a ‘bridge’ between the central team and in-store sensors.
᛫ Align people processes and incentives
The HR team formalized the new insight generation process into a new company’s procedure. The sales staff objectives were reviewed, and monetary benefits were added to the compensation package.
The classic collection, which was re-designed following the new process, encompassed 10% new items generated by the creative genius of the Chief Designer, and 90% classic items that were re-designed to better fit the customer desires and needs. Increased sales and improved customers feedbacks confirmed the effectiveness of the new process.
This example shows that – even for companies in industries known for being creative and driven by insights – the opportunity of leveraging the workforce to sense customer’s insights can dramatically strengthen their competitive advantage.
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