Actual insights are direct, meaningful actions that can be taken by analyzing any type of raw data. As an entrepreneur, how do you decipher that data correctly and avoid making costly mistakes? Well one of the first costly mistakes you can make is spending too much money on research, but we’ll talk about that in a few minutes.
Today, we’re talking to organizational leadership expert Denise Cumberland, Ph.D. Dr. Denise Cumberland is an insight-driven marketer, focusing on consumers and how data can help bring those insights to light, into reality. She’s also associate professor at the University of Louisville, teaching both in the M.S. Human Resource Education Program and the B.S. Organizational Leadership and Learning Program. Denise is a great friend, a great colleague, and a super sharp mind and we’re going to talk about how it is that we as business leaders can take all the data that we receive, and process it in a way that we know which actions to take, and which actions to avoid.
ED: Good to see you via this technology thing. Let’s talk about actionable insights. You and I have a healthy appreciation, as well as healthy disdain for, market research. Share a little bit about your passion for actionable insights as it relates to market research, and then tell us why actionable insights matter.
DENISE: I actually do love research, but I think there are times when we have to recognize it can be flawed. We have to be very careful. I think anyone who is interested in understanding other people’s behavior and understanding how to gather insights needs to realize there’s a process. I’m a big believer in making sure things are done in a way that gives you really good data. In terms of actionable insights, it simply means to me, that what you feel you’ve uncovered both fits from the logic standpoint and the gut standpoint. From that standpoint, you could either create a branding or product message to determine how to talk to your consumers or your employees. So, having actionable insights means you have enough information, and also have confidence in that information, to craft whatever it is you’re trying to do.
ED: I guess a more appropriate way for me to say we have a “disdain in research” is to say that we have a disdain for wasteful research. How about that?
DENISE: Absolutely! That drives me crazy. When I see surveys and some types of research that are so flawed, they’re misleading. To me, that’s criminal.
ED: We have similar backgrounds, from the standpoint that we worked for large, multi-unit restaurant chains that both happen to be poultry-related…
DENISE: We love our chicken!
ED: *chuckle* We love our chicken! Let’s talk on the larger scale first. Have you seen larger companies, with more resources, use marketing research or consumer insights more powerfully? And have you seen larger companies completely miss a research opportunity?
DENISE: I think on a larger organization scale, obviously, resources are often more available and being more available means you can have more ways to find touch points to communicate and inquire. Whether it’s surveys, focus groups, or ethnographic studies, where you go out and spend time with your consumers all of that gives you the broad perspective. I think sometimes larger organizations can spend more time and money, and that can be valuable. But we both know there’s a tradeoff, right? The more time and money you spend, the longer it takes to get things to market, the longer it takes to get things through a process. In a world where things are changing rapidly, you sometimes need to have shortcuts that are faster.
I think large organizations, at least I know the one I came from, tried to set up a dual system for what we’ll call the traditional process of market research. Then there would be the sandbox, where you have to be able to be nimbler. I think smaller companies who are resource-challenged, can sometimes be very creative, with how they come up with information, as long as it’s done with guidance and not just talking to three people and making a decision. Although in an emergency, sometimes we have to do that, right? Everything is context specific. I like to say that, you have to realize there are times when you have to make a decision, and you simply don’t have enough time to go out and gather more data.
ED: You mentioned logic plus gut. Many times, the gut is discounted by business owners, or even just as humans, and sometimes collectively even by our community. How do you balance the data and the gut?
DENISE: Well, I think the longer you’ve been doing something and the more you know your customer base or your employees, the better your gut gets. So over time, our intuition gets stronger than when we first walked into an organization. I think you have to realize that time can be your friend in terms of sharpening your instincts or your intuition. So, the more time you spend talking to customers talking and employees, the more you know how to sift through the information and get a level of confidence in your own sense of understanding about those folks.
ED: One of the things that I remember from some work I was involved in years ago, is that sometimes market research is just to keep it out of the ditch. What did you think about that?
DENISE: Well, when you’re launching products or going to market, big decisions are being made. And sometimes it used to frustrate me in terms of where the organization was in terms of its health. So organizations can span the gamut, as you know, they can be sick or they can be healthy. If they’re very sick, you’re trying to keep them from going into the ditch, right? If they’re very healthy, they can often have more latitude because they have the resources. If they have a misstep, they can be thinking, “oh, we got that product wrong, well, we’ll be out next week or next month with something else.” Sick organizations have probably been in the ditch for a while, so there’s a lot riding on what they need to know. But I want to point out that sometimes when you’re in the ditch, you have to take big risks to get the heck out of it. Personally, if I were an organization I would want to lean in on success. I’d rather be in that lane, but you don’t always have the opportunity to make that decision, right? Organizations go through cycles. You know? The ups and downs and it’s part of the lifecycle.
ED: Look at the past four months.
DENISE: Yes, organizations have had to really change, not just some things, but everything.
ED: And then change the very next day…
DENISE: Exactly. And the amount of communication needed is phenomenal in terms of trying to keep people up to speed, but the information is changing. We don’t have all the knowledge and people expect research, so this is my other big beef. Research is often very numbers intensive. People tend to rely on it and believe it’s the gospel. However, the numbers are still based on people telling you things they know from the past. It is still evidence based and scientific, but at the end of the day, it’s not perfect, but the numbers make people think it’s always supposed to be 100%, right. Two plus two is always four, but in research that two, and that other two, are based on what people said, and you may have caught them at the wrong time so it may not equal four. It’s sometimes very hard. People get overly confident about data, but they need to always remember, even with the research, it’s based on consumers telling them what they’ve experienced. Now, this pandemic is certainly an experience because we didn’t know four months ago what we know today.
ED: Right. And we don’t know really what our world, our nation, our communities are going to need two weeks from now because the table is literally being reset almost every day. As a matter of fact, we had a conversation with a client last week about research on some messaging. And the, the CEO basically said, “well, I just wanted to validate that the message is right.” And I said, “that’s not gonna happen. This is not going to validate anything. It may give you higher probability of success. It may give you insights of a certain notion that resonates more than others, but nothing is foolproof based on market research.” Do you agree with that?
DENISE: That’s absolutely true. And again, context always matters. So even if you could say the world is identical, it could still change because you never know what consumer or employee moods were when they answered questions. You also have to question their ability to speak freely. Their willingness to be honest while wanting to be nice and not wanting to get management ticked off. There’s so many variables that go into humans, that the reality is, we have to work with a sense of that nothing is 100% foolproof, you’re just trying to get closer to the truth.
ED: So in trying to get closer, one of the things that we have looked at in the past with market research is that when you are trying to present a new idea, sometimes the customer can’t grasp it so they can’t give you insights. Can you talk a little bit that with new ideas and how you test the water with new ideas?
DENISE: Absolutely. It is really hard for consumers envision things, but I’ll go with the theory of 80%. So, 80% of us are pretty much locked into what we know. We base our thoughts about what we need based on what we know. Back when the iPhone came out I remember being the first person to say, “I don’t need a camera in my phone.” Everyone’s probably laughing now, right? Now I can’t live without the camera in my phone. It is so helpful, but I didn’t know that 15 years ago because I already had a camera. I couldn’t imagine needing something like that because I was limited by what I knew and what I thought I needed. So, innovators who are trying to break those beliefs and create things that we haven’t thought of, put it in front of consumers and the consumers just can’t give good feedback. You and I were in the food industry, and I just want to say that I’m going to give everybody a tip… coleslaw is really good on a chicken sandwich, but unless you’re from a certain part of the world where coleslaw is put on sandwiches, I’d expect to hear consumers say, “you don’t put coleslaw on sandwiches!” But when they ate it, they loved it. But how do you advertise something that you can’t talk about? My other favorite story was about chipotle sauce. People couldn’t pronounce it at first, so a brand that doesn’t have any money can’t go out and educate people on this term, but we wrote off a lot of chipotle sauce at my organization.
ED: I remember working in Atlanta. We had a recipe for cilantro in the mid-90s. And none of the mainstream grocery stores had cilantro in the produce section, but now look it’s everywhere. You know, that’s one of the challenges for entrepreneurs. Bringing it down to the practical level of independent business owners, small business owners, medium sized business owners, it’s so essential that you innovate. But it’s so difficult because it is hard to really know what’s going to resonate.
DENISE: Exactly. And larger organizations like to say they want to be innovative. But I’m like, “hmm, not unless you want to risk a lot of failures because you are going to fail a lot.” So, my coaching to all entrepreneurs, is failure is part of the process, but I hate the word failure. If I could eliminate that word, I would simply say, “it didn’t work at that time.” It could work again. Chipotle and cilantro went on to become huge ingredients. Now we can’t imagine life without chipotle or cilantro or edamame, or any other new or unusual ingredients. I like to remind people that there were a lot of failures before they got to those places.
ED: As we’re talking, I realized, one of my takeaways is that if you’re going to be the first to market with chipotle sauce, you better be ready to throw away some chipotle sauce, and you better bake it into the budget.
DENISE: And you better realize that, if you’re trying to educate consumers, then you have to give a lot away—a lot of freebies. You have to encourage people. If you have a category that’s technology based, you appeal to people who are much more innovative—those early adopters, right? When it comes to your quick service restaurant or your food restaurants, people don’t want to spend their $5 to $7 on a risk they might not want to be early adopters. That audience is different. So, you have to have deep enough pockets, if your audience is going to be in a different, you need to be able to educate them. Give free trials, spread messages by word of mouth, and otherwise, you’re gonna throw a lot away.
ED: What we both believe is it’s really cool to have a good idea, but if it doesn’t execute at the consumer level, it wasn’t a great idea. If it didn’t execute at the consumer level, it was most likely executed poorly. So, you need to listen to your customers. Here are a couple my takeaways—first, don’t spend more money than you’re willing to lose because the data is not necessarily going to be foolproof. Second, if you’re going to innovate, you better plan for some waste because if you’re truly unique, your customers are not gonna understand it. And you got to have some money baked in to handle product, as well as educating your consumers because if they don’t know you have it, they don’t know to buy it.
DENISE: Absolutely. A threshold there for a little bit of pain while you’re trying to get to market.
ED: Or a lot of pain. But you know what I learned at H-E-B is when you have a big win, it’s a big win. When you have a big miss, it’s a big miss. But it takes some of the misses to get the wins.
ED: Great chatting with you. Thanks, Denise.
DENISE: Absolutely, glad to be here.