Customer Insights: The Power of Fact-Based Marketing

"Insight is a new configuration of knowledge that breaks the existing pattern of thinking in an unexpected way." This definition of insight comes from Luke Williams, professor of marketing and innovation at the NYU Stern School of Business. In short, insights drive intelligent marketing decisions that, when executed well, drive growth. Williams spoke at the Franchise Consumer Marketing Conference in Atlanta in June.

There it was also my pleasure to host part of a wide-ranging panel discussion on marketing strategy, planning, execution, results, and measurement. Executives contributed their insights obtained in diverse industries from child education to senior services. Retailers, personal service providers, and restaurant operators all shared surprising lessons. Three key takeaways on gaining insights that drive action:

• Customer research and competitive analysis are the foundation to setting marketing goals and creating plans.
• The quality of execution and harmony on a given marketing plan will vary according to the degree of franchisee buy-in.
• Companies that excel at customer research, analysis, and execution achieve consistently better results.

Wendy Odell Magus, vice president of marketing at Kiddie Academy, explained how she was able to gain franchisee commitment to a controversial proposal to change the brand logo. She believes that once you have data from and about real customers, marketing decisions become fact-based. So she posed three thoughtful questions to drive her research on Kiddie Academy's desired customers (customers of competitors, people who did not choose Kiddie Academy, also were interviewed):

1. How do they come to us?
2. Why do they come to us?
3. Why do they choose us?

The research revealed that customers of child education services wanted quality education for their children, not just child daycare. From that insight, her team began to redefine their messaging. Of course, the brand logo is a key visual component. It evolved from an emphasis on "Kiddie" to accentuating the educational promise implicit in "Academy." By sharing the research and insights with franchisees, it was far easier to gain agreement to align the logo with what matters most to target customers.

The importance of targeting

Jeff Link, CEO of the Analytics Media Group, the other keynote speaker at the conference, made a strong point about the necessity of finding clear targets as a prelude to developing marketing campaigns. The idea comes from his work in helping political candidates get elected. Instead of trying to appeal to all possible voters, he found success came from narrowly focusing on the voters who were the most "persuade-able." In business, the most desirable customers are those most likely to convert to trial customer to regular customer to brand advocate. Once you have the right targets, you can design everything from your branding to your promotions to your customer experience to meet their expectations, needs, and aspirations.

An example comes from Valerie Kinney, director of communications at Auntie Anne's, a growing brand in the snacking category that offers fresh-baked pretzels, mostly from mall-based locations. Faced with the emerging customer demand for gluten-free menu options, they argued internally about whether to add such an offering to their menu. But their research showed that only 3 percent of their customer population wanted gluten-free food. As a result, they focused instead on better understanding what the 97 percent really wanted, and why they chose Auntie Anne's.

At the start of their discovery effort, the belief was that Auntie Anne's customers were mall-shopping moms with strollers. But their research and analysis uncovered three distinct customer segments, which they named 1) I love snacking, 2) social trendsetters, and 3) family/kid friendly, to identify different drivers of consideration for Auntie Anne's.

One disturbing discovery was that many customers perceived that the pretzels were fried, rather than baked. That's a problem because Auntie Anne's pretzels are baked fresh daily on the premises. Customers were surprised to learn that.

So the marketing team developed a new positioning statement, "Bringing unexpected freshness to the world." Yet Auntie Anne's also discovered they weren't as good as they thought they were in delivering on this promise. That insight from listening to customers surprised the marketing team. Or as Williams would say, that insight broke "the existing pattern of thinking in an unexpected way." It also brought about a renewed focus on improving the customer experience, based on what customers said.

This last point is very important for every franchisor. You can say what you want about who you think you are, but it is ultimately your customers who define your brand. Based on their experiences, and the experiences of their friends, customers form their own perceptions and attitudes about your brand. That's how customer loyalty is built. That's the power of customer insights.

SMG Vice President Jack Mackey helps multi-unit operators improve customer loyalty and drive growth. Contact him at 816-448-4556 or jmackey@smg.com.