The pattern of maturation that we identified in 2009 is still relevant for CI groups and for emerging commercial big data and customer analytics organizations. Such groups move through four main developmental stages. (See Exhibit 2.) (Visit insightsassessment.bcg.com to evaluate the maturity of a CI function.)
1. Traditional Market Research Provider. At this stage, CI functions are mostly tactical and research oriented, focused on uncovering trends of sales of existing products and services, largely in existing channels and geographic locations. The group works on a project basis to produce data in response to line managers’ requests. It is limited in budget, head count, and scope of influence within the organization, and it receives limited senior executive support. The function’s communications concentrate on studies or project results that target a narrow audience, such as the managers who commissioned the research.
2. Business Contributor. For a CI function at this stage, research tends to have a real-time focus on short-term innovations such as packaging, form and flavor extensions, pricing, and promotions. The group concentrates on translating customer insights into business recommendations. Studies build on one another to start to form bodies of work and broad perspectives.
A function at this stage typically has active support from the most senior marketer in the company as well as greater access to senior and BU leaders. However, business leaders generally set priorities. Significant parts of the CI budget may exist outside the funtion’s control, and the group’s representation on the executive team and its exposure to the board are limited.
3. Strategic Insight Partner. At this stage, senior executives believe customer insights should guide most commercial business decisions. The CI function is a strategic partner and trusted advisor to the line. In addition to specialized research skills, CI team members demonstrate critical thinking, a willingness to challenge ideas, economic and strategic understanding, and business judgment. An executive team member—who is not the chief marketer—champions strategic research, and the CI team works with line management to translate customer knowledge into key business decisions. Together, the CI team and line managers form the beginning of a learning organization that becomes increasingly capable of anticipating customers’ needs.
The function’s strategic or real-time research focuses on product and service improvements and short-term innovations but also includes experimentation with new data sources and research methodologies. Results are communicated across the organization, not just to the function commissioning the work. A group at this stage will have more generalists and strategists, and its leaders will frequently come from nontraditional CI recruiting pools, such as consulting firms or another industry.
4. Source of Competitive Advantage. This stage remains elusive for almost all companies. At this level, a CI function is focused on new-to-the-world innovation, foresight, and predictive inquiry. CI is used in business decisions and core processes beyond market decisions, including research priorities, new-product development, strategic planning, M&A and portfolio strategy, employee engagement, and company branding.
At this level, the CI team exerts the greatest control over the CI budget. As one CI vice president we surveyed remarked, “We’re aiming for 100% budget control….We want to have visibility of the total spend and the ability to trade off against higher value and higher impact uses.”
A function at this stage provides feedback on relevant trends, offering an independent perspective on high-priority topics and customer populations and specializing in innovative methodologies. Functional leaders play executive roles, such as head of strategy, analytics, or marketing, and they often report directly to the CEO.
One senior marketer we surveyed said that for the team to reach stage 4 it must be “truly embedded” with business decision makers, seen as a “thought leader” rather than only a “project executor or data provider,” and capable of providing “world-class strategy and guidance that’s actionable to solve business issues.”