Gaining 3‐D customer insight to drive profitable growth

Abstract

Purpose

This article aims to introduce a more comprehensive approach to generating customer insights that can improve almost any organization's ability to drive profitable, customer‐focused growth.

Design/methodology/approach

Examining data on the disparity between “what customers say” and “what they do” can uncover major business opportunities. For example, data that tracked hundreds of physicians' prescribing behaviors over time was matched with a survey that asked them to rate each of various drugs along certain dimensions. A statistical model was built to determine which product attributes, when rated favorably for one drug, were most predictive of prescribing behavior.

Findings

The article finds that the 3‐D approach requires companies to segment based on an integrated view of their customers. This reveals true cause and effect – how changes in a company's offer or communications lead to changes in customer behavior, and what affect these have on company profitability.

Practical implications

Managers can use the 3‐D integrated perspective to help evaluate strategic options by addressing the economic trade‐offs between customers' likely responses to a change and the cost of the change.

Originality/value

Companies that focus on customer behavior, particularly what it is about their and their competitors' products and services that cause customers to switch from one to the other, develop clearer pictures of the economic drivers of customers and customer segments, and dedicate their attitudinal research to interpreting and improving their understanding of how to influence customer behavior. The resulting insights enable managers to spot and target opportunities for profitable growth that are invisible to other companies and help them more effectively prioritize where, how and in what to invest.

Citation

Langford, R. and Schulz, K. (2006), "Gaining 3‐D customer insight to drive profitable growth", Strategy & Leadership, Vol. 34 No. 2, pp. 21-27. https://doi.org/10.1108/10878570610652608