Customer foresight

Last updated

Customer foresight is a new[ when? ] field of applied research. It aims to understand future consumer preferences and wishes with regard to tomorrow's products and services. It does so by combining customer research and foresight research elements. Customer foresight can be conceived as an interaction with projected future markets through selected customers by understanding their wishes and attitudes, ideas and visions as well as their perception of signals and drivers of change. Even though the concept cannot predict the future, it enables companies to prepare for different future scenarios and thus improves strategy and decision-making processes.

Contents

Definition and classification

As the future combines both continuity and change, not everything one knows today will disappear tomorrow. Some things will change significantly while others will not. [1] But even today, research reveals that numerous inventions fail due to a lack of customer centricity. [2] Consequently, anticipating future customer needs and behaviors constitutes a challenge when developing future product portfolios. This is especially relevant for industries with long planning cycles because these industries have to develop value propositions today for the customers of tomorrow. [3] However, this involves dealing with many unknowns e.g. future everyday life or future consumption patterns. This is why, customer foresight starts with analyzing the consumer needs, values and motivations of today. Methods in the field of customer research that can be applied at this stage are e.g. qualitative and quantitative surveys, behavioral observation and experience, ethnographic research, cultural analysis or value and motivation research. On the basis of these consumer insights, transformations and change dynamics are projected into the future. [4] As a result, a space of possibility is defined. [5]

In order to then understand future realities, customer and foresight research are combined. Foresight tools to apply can for example be scenario planning, trend research and science fiction. However, also quantitative methods such as time series analysis can be used. Their application allows for understanding dynamics of change and projecting the envisioned developments into the future. The following graphic visualizes and classifies the approach in the sweet spot of customer and foresight research. [6]

Classification of customer foresight at the intersection of customer and foresight Research (Eller, Hofmann & Schwarz 2020) Customer Foresight Territory x.png
Classification of customer foresight at the intersection of customer and foresight Research (Eller, Hofmann & Schwarz 2020)

At the intersection of customer and foresight research, it is then crucial to understand the interaction of customers with drivers of change or future realities. As customer foresight relies a lot on insight generation through interactions, a systematic selection of study participants is of great importance. Through interacting with Trend Receivers or other study participants, insights are generated which are then analyzed. The following section provides a more detailed description of the stages of typical customer foresight projects.

Stages of customer foresight projects

The customer foresight journey typically starts with the identification of relevant business needs by e.g. analyzing market dynamics, visions and objectives and value propositions. In a second step, change dynamics are analyzed and research materials on future scenarios are collected e.g. by applying scenario planning, doing desk research, roadmapping and gathering inputs from science fiction (for an example of a multi-method study approach in the field of customer foresight see Hahn et al. 2016). [7] Then, the most suitable dialogue partners and project participants are selected by applying pyramiding techniques, screening, scouting or broadcasting. The interviews can be organized in role-playing, workshop formats or in-depth interviews. Based on these inputs, practical implications are identified which are then integrated by decision makers through strategy workshops, backtesting or design thinking sprints. [6] As a consequence, customer foresight insights are transferred into business value.

Mass customer foresight

As the name already alludes, mass customer foresight is about insights that are valid for the mass market or the average customer and are representative for societies or markets. In contrast to customer foresight, it uses large scale, quantitative tools to examine future consumer behavior in a representative way. The following figure classifies the concept with regard to customer insight and foresight.

Classification of mass customer foresight (workshop of Goethe University and the Foresight Academy) MCFx.png
Classification of mass customer foresight (workshop of Goethe University and the Foresight Academy)

The concept was developed by Goethe University and the Foresight Academy as an extension to the customer foresight concept. The latter is often criticized as too elitist because the application of the e.g. Trend Receiver methodology by its definition implies that the subjects do not embody the average consumer. Since the customer base of many companies consists of the broad mass of people it can be important to enrich insights generated in the course of interactions with a selection of customers with the view of a representative sample. Consequently, the importance of these insights for corporate strategy formulation can be increased.

An example for such a mass customer foresight study is the research project which was carried out in the course of the collaboration between Goethe University and the Foresight Academy. Here, such a quantitative study was designed and carried out within Germany, China and the United States. The research project built on the results of a Trend Receiver study that examined the question “How do we want to live in 10 years?” within six areas of life: living, leisure and work; health and nutrition, consumption and finance; communication; identity and expression as well as community and society. The qualitative insights generated through the interviews were used as the hypotheses to validate within the joint quantitative survey. As a consequence, empirical research can approve or reject projections made and increase the validity of the qualitative results and their importance for corporate strategy and decision making.

While customer foresight itself is quite a new research field, mass customer foresight is even more new and still rather in the experimental stages. However, it will be interesting to observe its further development in theory and practice.

See also

Related Research Articles

Behavior or behaviour is the range of actions and mannerisms made by individuals, organisms, systems or artificial entities in within some environment. These systems can include other systems or organisms as well as the inanimate physical environment. It is the computed response of the system or organism to various stimuli or inputs, whether internal or external, conscious or subconscious, overt or covert, and voluntary or involuntary.

Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.

Concept testing is the process of using surveys to evaluate consumer acceptance of a new product idea prior to the introduction of a product to the market. It is important not to confuse concept testing with advertising testing, brand testing and packaging testing, as is sometimes done. Concept testing focuses on the basic product idea, without the embellishments and puffery inherent in advertising.

Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Market research helps to identify and analyze the needs of the market, the market size and the competition. Its techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data.

Qualitative marketing research involves a natural or observational examination of the philosophies that govern consumer behavior. The direction and framework of the research is often revised as new information is gained, allowing the researcher to evaluate issues and subjects in an in-depth manner. The quality of the research produced is heavily dependent on the skills of the researcher and is influenced by researcher bias.

Usability Capacity of a system for its users to perform tasks

Usability can be described as the capacity of a system to provide a condition for its users to perform the tasks safely, effectively, and efficiently while enjoying the experience. In software engineering, usability is the degree to which a software can be used by specified consumers to achieve quantified objectives with effectiveness, efficiency, and satisfaction in a quantified context of use.

The Delphi method or Delphi technique is a structured communication technique or method, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. The technique can also be adapted for use in face-to-face meetings, and is then called mini-Delphi or Estimate-Talk-Estimate (ETE). Delphi has been widely used for business forecasting and has certain advantages over another structured forecasting approach, prediction markets.

Scenario planning, scenario thinking, scenario analysis, scenario prediction and the scenario method all describe a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and generalization of classic methods used by military intelligence.

Futures studies Study of postulating possible, probable, and preferable futures

Futures studies, futures research, futurism or futurology is the systematic, interdisciplinary and holistic study of social and technological advancement, and other environmental trends, often for the purpose of exploring how people will live and work in the future. Predictive techniques, such as forecasting, can be applied, but contemporary futures studies scholars emphasize the importance of systematically exploring alternatives. In general, it can be considered as a branch of the social sciences and an extension to the field of history. Futures studies seeks to understand what is likely to continue and what could plausibly change. Part of the discipline thus seeks a systematic and pattern-based understanding of past and present, and to explore the possibility of future events and trends.

Strategic foresight is a planning-oriented discipline related to futures studies. In a business context, a more action-oriented approach has become well known as corporate foresight.

Futures techniques used in the multi-disciplinary field of futurology by futurists in Americas and Australasia, and futurology by futurologists in EU, include a diverse range of forecasting methods, including anticipatory thinking, backcasting, simulation, and visioning. Some of the anticipatory methods include, the delphi method, causal layered analysis, environmental scanning, morphological analysis, and scenario planning.

Technology forecasting attempts to predict the future characteristics of useful technological machines, procedures or techniques. Researchers create technology forecasts based on past experience and current technological developments. Like other forecasts, technology forecasting can be helpful for both public and private organizations to make smart decisions. By analyzing future opportunities and threats, the forecaster can improve decisions in order to achieve maximum benefits. Today, most countries are experiencing huge social and economic changes, which heavily rely on technology development. By analyzing these changes, government and economic institutions could make plans for future developments. However, not all of historical data can be used for technology forecasting, forecasters also need to adopt advanced technology and quantitative modeling from experts’ researches and conclusions.

The Master of Marketing Research (MMR) is a graduate degree program that may be from one to three years in length. Students pursuing this degree study the aspects of research in the field of marketing. Unlike an M.B.A., which is a general business degree, the Master of Marketing Research focuses solely on the aspects of marketing research.

The following outline is provided as an overview of and topical guide to marketing:

Product Planning, or product discovery, is the ongoing process of identifying and articulating market requirements that define a product's feature set. It serves as the basis for decision-making about price, distribution and promotion. Product planning is also the means by which companies and businesses can respond to long-term challenges within the business environment, often achieved by managing the product throughout its life cycle using various marketing strategies, including product extensions or improvements, increased distribution, price changes and promotions. It involves understanding the needs and wants of core customer groups so products can target key customer desires and allows a firm to predict how a product will be received within a market upon launch.

Netnography, is a specific type of qualitative social media research. It adapts the methods of ethnography, is understanding social interaction in contemporary digital communications contexts. You can think of netnography as a particular set of actions for doing research within and about social media. Netnography is a specific set of research practices related to data collection, analysis, research ethics, and representation, rooted in participant observation. In netnography, a significant amount of the data originates in and manifests through the digital traces of naturally occurring public conversations recorded by contemporary communications networks. Netnography uses these conversations as data. It is an interpretive research method that adapts the traditional, in-person participant observation techniques of anthropology to the study of interactions and experiences manifesting through digital communications.

Corporate foresight has been conceptualised as a set of practices, a set of capabilities and an ability of a firm. It enables firms to detect discontinuous change early, interpret its consequences for the firm, and inform future courses of action to ensure the long-term survival and success of the company.

Real-time Delphi (RTD) is an advanced form of the Delphi method. The advanced method “is a consultative process that uses computer technology” to increase efficiency of the Delphi process.

Transition scenarios are descriptions of future states which combine a future image with an account of the changes that would need to occur to reach that future. These two elements are often created in a two-step process where the future image is created first (envisioning) followed by an exploration of the alternative pathways available to reach the future goal (backcasting). Both these processes can use participatory techniques where participants of varying backgrounds and interests are provided with an open and supportive group environment to discuss different contributing elements and actions.

The Trend Receiver Concept is a method for developing Customer Foresight and has been overall identified as an approach to develop foresight. At the core of the Trend Receiver Concept is the identification of suitable conversation partners, so called Trend Receivers, when developing foresight on the future demands and habits of consumers.

References

  1. Hofmann, Rupert (2020). "Customer Foresight Practice. How to access future markets through extraordinary people". Marketing Review St. Gallen. 3.
  2. Kleijnen, Mirella; Lee, Nick; Wetzels, Martin (2009). "An exploration of consumer resistance to innovation and its antecedents". Journal of Economic Psychology. 30 (3): 344–357. doi:10.1016/j.joep.2009.02.004. ISSN   0167-4870.
  3. Hofmann, Rupert (2011). Trend-Receiver - qualifizierte Visionskraft Kriterien und Vorgehensweisen der Befragtenauswahl und Dialoggestaltung bei Studien zu zukünftigen Konzepten am Beispiel der Audi AG. ISBN   978-3-86955-782-3. OCLC   752935288.
  4. Schweitzer, Nicola; Hofmann, Rupert; Meinheit, Andreas (2019-07-01). "Strategic customer foresight: From research to strategic decision-making using the example of highly automated vehicles". Technological Forecasting and Social Change. 144: 49–65. doi:10.1016/j.techfore.2019.04.004. ISSN   0040-1625. S2CID   159165020.
  5. Hofmann, Rupert (2015-12-01). "Visionary competence for long-term development of brands, products, and services: The trend receiver concept and its first applications at Audi". Technological Forecasting and Social Change. 101: 83–98. doi:10.1016/j.techfore.2014.06.005. ISSN   0040-1625.
  6. 1 2 Eller, Hofmann & Schwarz (2020). "The Customer Foresight Territory". Marketing Review St. Gallen. 3.
  7. Hahn, Alexander; Hofmann, Rupert; Bilgram, Volker; Schwarz, Jan Oliver; Meinheit, Andreas; Füller, Johann (2016), Abele, Thomas (ed.), "Easy Rider", Die frühe Phase des Innovationsprozesses: Neue, praxiserprobte Methoden und Ansätze, FOM-Edition (in German), Wiesbaden: Springer Fachmedien, pp. 75–98, doi:10.1007/978-3-658-09722-6_5, ISBN   978-3-658-09722-6