Consumer telematics is muscling in on traditional market research and for some very good reasons. If market research is like using a microscope then consumer telematics is like using the Hubble space telescope. To be more specific here are the five reasons that traditional market research and customer experience studies come up short.
Reason #1: People lie
“Lying” is a strong word. But the truth is that customer responses are not based on an extended period of observation, and at best reflects the last knowledge the customer had of his/her use of the product. So the responses are horrendously disconnected with reality. Considering that marketing is paying out of the nose for those expensive consultants surely you deserve better data. Consumer telematics delivers data on actual product usage rather than opinions.
Reason #2: Surveys are expensive
To make the studies more relevant and accurate, the market research firms employ a bunch of really smart statistics people. They have mortgages. In expensive parts of the town. So you pay a lot. Seriously though, there is a reason Big Data is becoming Big. Crowdsourcing is not only cheaper it delivers better quality results. Have you read this post how Google uses search queries to diagnose flu trends. These trend reports precede the official communiques from the healthcare bodies. Consumer telematics has a higher upfront cost, but the data collection is cheap.
Reason #3: Small samples
It is not uncommon for entire brand strategies for to be built off surveys of a few thousand people. One area where the small sample is a fundamental barrier is in direct marketing when the marketing manager wants to micro-target the wants and needs of a customer base in the millions. Furthermore, complex organizations have special interest requirements from surveys. They slice and dice data off the respondents to their needs (at the product, brand, model, customer segment level) and the survey results are effectively abused. Consumer telematics measure off the customer universe and the data are more representative of the broad customer base.
Reason #4: Limited organizational relevance
Basically, the market research on a microsection of the customer base is unusable by the broad organization. Surveys are typically commissioned by a specific business unit – let’s say Brand A. In principle, Brand B within the same organization should do a different survey. In practice, Brand B will try to extrapolate the results of the survey from Brand A – usually to their loss. It may sound wrong, but when budgets are tight this happens. Consumer telematics delivers detailed data across the customer universe. It is up to different business units to extract content relevant to their purposes.
Reason #5: Limited view of the customer
Surveys ask very specific questions. If the need was not foreseen, the question is not asked. In contrast consumer telematics does not hypothesize on what’s important or not. [There’s a reason why it’s called Big Data]. There’s granular detail on product usage and consumption – leaving it up to the business to draw out insights.
To see a stellar example of a company using telematics to create a better customer experience click on the link below. The product teams and the marketing function are leveraging the “Big Data” in pricing, targeted marketing and product functionality to build a competitive advantage.
All that said, not all businesses can jump into consumer telematics and expect to get value out of the data gathering. Indeed, there are five ways that such initiatives can go spectacularly wrong – usually when telematics is considered a technical rather than a business imperative. To see whether your business is ready for leveraging telematics, use this maturity assessment calculator below.