CCI fellows are constantly adding to the knowledge about customer behavior and trends. The CCI Insights Review synthesizes their research and makes it accessible to the broader marketing community for real-world application.
Economists and marketers have long assumed that potential customers rationally weigh the costs and benefits of every possible choice before deciding what to buy. Under this assumption, marketers use tidy frameworks to help identify ways to influence consumer decisions.
As it turns out, this assumption is wrong. While shopping, we don't think as much as we think we think.
It's called the whale curve -- a schematic representation of profit, replicated below. It illustrates, among other things, how 200 percent of profit can come from only 10 percent of customers. Fifty percent of customers might account for 250 percent of profit. And the bottom half of customers can actually bleed the profits of the firm.
Remember the time you bought your first iPod? Was the decision influenced by a TV ad? Or did someone you trust, perhaps a technology enthusiast, gave you unsolicited advice and perhaps a quick demo? Did the same happen with a Kindle when it first came out? How fast was the progression from awareness to consideration to purchase to loyalty?
History is littered with cases of adventurous marketing initiatives that crossed consumers’ limits of acceptance. Often, it is not because these ideas were unwelcome or the firms did not have the capability to deliver on the core benefit. Rather, these cases can be viewed in terms of a lack of permission for the brand to conduct specific initiatives.
Are There Any Customer Insight "Holy Grails"?
Ken McGee (Gartner): Are you working on customer insight projects that really represent the "Holy Grail" for decoding customer "wants and changes"?
Dr. Ravi Dhar (Dhar): One of the Holy Grails is what Steve Jobs was innately known for - the preferences people already have but cannot articulate, identify or know that they even have.
In an episode of the popular sitcom Seinfeld, George thinks he has purchased a car that once belonged to the actor Jon Voight. In every conversation he finds a way to drop in the name and basks in the reflected glory and people are very impressed with him and his car.
Jerry Seinfeld made millions by crafting “a show about nothing.” However, when it comes to marketing, is it really a good idea to have “an ad about nothing?” New research from YCCI Fellows and Yale SOM Professors Dina Mayzlin and Jiwoong Shin suggests that if you have a high-quality product, an “uninformative” ad may actually be the best way to connect with c
It’s clear why shoppers like store brands. Private labels are cheaper than their name brand counterparts, and in categories where the store brand and name brand are virtually identical, buying private label is a way to save pennies without sacrificing too much. And during these recessionary times, those pennies are worth a lot to many consumers.
It seems too good to be a true: a costless way to get consumers to like your product more, to pay more for it, and to consume more of it that involves no changes to the product itself.