Lecture given in Deep Customer Insights course of the Laurea Service Innovation and Design Master's program.

1. Deep customer insights
What customer insights are and how
can they be applied
Taneli Heinonen
mail@taneliheinonen.com
www.taneliheinonen.com

2. My background: from sociology to design
Work experience:
• Insight Delivery, Education, research and
consulting
• Diagonal, Insight Specialist in a service design
agency
• Gemic, consultant and ethnographer in an
innovation consultancy
• Eximia, teacher of sociology and a marketing
assistant in an education company
Education:
• Lund University, MA Applied Cultural Analysis
• University of Helsinki, B.Soc.Sc., Sosiology
www.taneliheinonen.com
Taneli Heinonen, Insight Delivery

3. Current business of
customer insights

4. Companies try to develop their business by understanding the
consumer behavior better
• What are the key drivers of
consumers in our market?
• Why are they saying one thing and
then doing something else?
• Who are our customers? How can
we get beyond the traditional
demographic segmentation
models?
• Why do consumers reject our
service? What are the barriers for
using our products?
• What are their needs and
aspirations? How could we better
answer them?
• What do they value? How could
we become more valuable?

5. Different fields of building insights
Big data Behavioral
economics
Deep insights of
human sciences
Customer / consumer / user / human insights
• Large data sets
• Recorded online
behavior
• Experimentations
• Studying different
rationalities
• Studying the quality
of experience
• Cultural “why”
behind rationalities

6. The promise of big data – can huge digital data sets provide important
knowledge
Customization based on the dataVariety and quantity of existing data

7. Behavioral economics as a way of bringing psychological elements to
economics
• System 1 (automatic and fast)
thinking vs. system 2 (analytical and
slow thinking)
• Experiencing self vs. remembering
self
• Heuristics serve in fighting a
cognitive load:
• Anchoring
• Herd mentality
• The cost of zero cost
• Availability heuristics
• Substitution
Daniel Kahneman, Dan Ariely and Thale & Sunstein with their Nudge-thinking have
popularized behavioral economics in the recent decades.
See also for example: http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions#t-19717
http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory

8. Applying tools of human sciences and qualitative methods to gain thick
descriptions of the phenomenon
• Tools of human sciences have a)
become part of the toolbox of
designers b) translated into a new
field of applied ethnography and
anthropology.
Grant McCracken, Patricia Sunderland & Rita Denny and the founders of Red
Associates Christian Madsbjerg & Mikkel Rasmussen have advocated for
application of human sciences in business development.
See also for example: https://www.youtube.com/watch?v=zNUCmISvDss
https://www.youtube.com/watch?v=iR8n78VhJes

9. Companies working with insights come from different fields and
practices
Deep Customer Insights
Design agencies and
design thinking
Strategic consultancies
and ethnography
Service design
agencies Insight research agencies –
connected to ad agencies
Public sector and
behavioral economics

10. Why are customer
insights important

11. Customer Insights as way of
regaining clarity in the fog
Photo credits: Guru Sno Studios. Flickr.com

12. Where does the fog come from and why
has understanding the customers
become so important?
Photo credits: Ian Muttoo. Flickr.com

13. Change of societies from 1) agrarian to industrial and 2) from industrial
to consumer society
Agrarian society
Farms
Surviving of the land
Possessions as scarce utilities for life
Industrial society
Factories
Growth of production
New industrially produced products
available for masses
Consumer society
Services online and offline
Providing experiences
Abundance of products and services
ubiquitously available

14. Digitalization and urbanization changes the experiencescape by
providing a huge amount of choices
Agrarian society
Farms
Surviving of the land
Possessions as scarce utilities for life
Industrial society
Factories
Growth of production
New industrially produced products
available for masses
Consumer society
Services online and offline
Providing experiences
Abundance of products and services
ubiquitously availableUrban population 54% of the total global
population, up from 34% in 1960, and
continues to grow. (WHO)
70% of the world population will be using
smartphones by 2020. (Ericsson Mobility
Report, 2015)
Photo credits: Alexander Rentsch. Flickr.com

15. Decision-makers often operate with wrong models of human behavior
– seeing people as mere rational choice makers
Homo economicus
Rational
Self-interested individual
Attempts to maximize own utility
Is easy to measure with simple models of
marginal utility
Real people
Irrational, emotional and social beings
Habits, routines and practices
Contradicting values and identities
Changing roles and contexts of daily life
Relationships and role models

16. Numbers have been considered to be the only truth – business
believes quantified truths
Underestimating things that can’t be measured and overestimating measurable numbers. Numbers are often data of
the past and thus we end up thinking future will look like the past.
Quantitative research vs. qualitative research
• How many of pre-specified x,y,z there are vs. What kinds of x,y,z there are and what are their relations like
• Properties vs. Aspects
• Amounts vs. Experiences
• Large sample vs. deep description
• “Objective” vs. interpretative
”The greatest weakness of the quantitative approach is that it decontextualizes human behavior, removing an event
from it’s real world setting and ignoring the effects of variables not included in the model.”
Roger Martin, the dean of Rothman School of Management

17. From collecting data to
building wise decisions

18. We buy a lot of things, but we
rarely know why we made the
choices we made.
Photo credits: OKNOVOKGHT. Flickr.com.

19. Insights as wisdom to make right kind of business decisions
Truth
Discovery
Unconscious needs
Inspiration
Ackoff’s view: From data to wisdom
• Wisdom: evaluated understanding
that can be applied to decision-
making.
• Understanding: appreciation of "why“
– synthetization of new knowledge.
• Knowledge: collection and application
of data and information; answers
"how" questions
• Information: data that are processed
to be useful and have a meaning;
provides answers to "who", "what",
"where", and "when" questions.
• Data: symbols as raw data. For
example 0&1Ackoff, R. L. 1989. From Data to Wisdom. J. Appl. Syst. Anal. 16, pp 3-9

20. Insights as wisdom to make right kind of business decisions

21. Wisdom helps in defining right problems to solve
Double diamond model of Design Council UK

22. 1. Discover 2. Define 3. Develop 4. Deliver
Insight generation is the basis of the creative process
Insight Design

23. Definitions and
examples of insights

24. Insights are crystallized forms of understanding that support the
creative work or decision making
Insights are NOT just data
Insights are NOT just findings of market
research
Insights give perspective that inspires
good business decisions
They don’t just answer WHAT, but also
WHY and HOW
Deep understanding
Truth
Discovery
Unconscious needs
Consumer aspirations
Inspiration
Perspective
Words typically used to describe
customer / consumer insights
Typical explanations of the insights

25. INSIGHT BEHIND MARKETING

26. Combining Hifi-sound systems
and interior design to support
couples in their negotiations
about the home
INSIGHT BEHIND A PRODUCT

27. What kinds of insights you can
see behind the Airbnb service?
INSIGHT BEHIND A SERVICE

28. Clarity and right perspective
give direction to creative work
Photo credits: Roger. Flickr.com

29. 2nd part

30. Fields of understanding

31. Different viewpoints to the everyday life of people
People
StructurePractice

32. Building an understanding of the relevant aspects - People
Who are the people we need to understand?
What is it like being them?
How is the service or product x part of their life?

33. Building an understanding of the relevant aspects - Practices
What are the relevant practices that people
engage in?
How do people experience these?
What is the role of service or product x in these
practices?

34. Building an understanding of the relevant aspects - Structure
What are the relevant social and cultural
structures for the context of service or product
x?
How have these changed over time and what are
the ongoing changes?
How do these changes affect the people and
practices?

35. When understanding goes wrong in business…

36. When understanding goes wrong in business…

37. Methods and process

38. 1. Discover 2. Define 3. Develop 4. Deliver
Insight generation is the basis of the creative process
Insight Design

39. Analytical approach fuels the creative process
Insight part of the design process has five stages:
1. Discover 2. Define
1. Re-framing the issue
What are we trying to understand?
What is this all about from the perspective
of people and culture?
2. Designing the research
What will the research questions be?
What kind of methods should be used?
3. Empirical research
How to apply the methods in the real world?
How to document and map the data?
4. Analysis
What is the data telling us?
How should we make sense of it?
5. Communication
What does the analysis mean for the
creative task at hand?
What kind of opportunities can we see?
Insight delivery point
www.taneliheinonen.com

40. Different methods for different goals – interviewing and a collection of
other methods
1. Discover 2. Define
4. Analysis
What is the data telling us?
How should we make sense of it?
Steve Portigal, 2013

41. Diary studies and cultural probes help you gather qualitative self-
reported data over time
Example from: thecyclingcommuter.wordpress.com
Packages with tasks and artifacts given
to research participants. They record and
deliver the tasks to researchers.
Typically disposable cameras, diaries,
stories, maps etc.
Allows the gathering of data over time.
Requires good briefing.
Recruitment is crucial to get right kind of
people who are able to self-report with
your support.
Analyzing the probes and conducting a
follow-up interview with the respondents.

42. Focus groups help you analyze the discussion about a topic among a
defined group of people
Example from: guardian.com Taking time out to listen: the benefits of focus groups.
Traditional qualitative market research
technique that is often used for concept
and product testing in different phases of
the development process.
Well-planned discussion moderated by a
researcher whose goal is to tease out
useful answers and engage all
participants into the discussion.
Typically 6-8 people in a group for 1-2
hours.
Allows you to study how ideas, topics or
concepts are received in a group. What
kind of conflicting and consensus views
they evoke.

43. Card sorting exercises as a part of the interviews
Portigal 2013.
Visual aids that evoke discussion through
the exercise of arranging cards or coming
up with thoughts and stories based on
them.
You can use visual cues of ideas, sort
brands an images related to them, use
pictures of places, times of the day etc.
Helps you see how people organize and
relate things to each other and what kind
of preferences they have.

44. User surveys help gather a lot of quantitative and some qualitative
data
Surveymonkey is one of the examples that allows you to make surveys for free.
Surveys are series of structured
questions.
Nowadays most surveys are made
online.
It’s crucial to plan the survey well, so you
get right kind of data. Mistakes are hard
to correct.
Often used in business to get responses
on preferences between brands and
concepts, but also for opinions, reported
behavior and background information.

45. Interviewing as a way of listening potential customers and framing
business problems in new ways
Surveymonkey is one of the examples that allows you to make surveys for free.
Surveys are series of structured
questions.
Nowadays most surveys are made
online.
It’s crucial to plan the survey well, so you
get right kind of data. Mistakes are hard
to correct.
Often used in business to get responses
on preferences between brands and
concepts, but also for opinions, reported
behavior and background information.
Steve Portigal, 2013

46. Recruiting respondents for interviews is a crucial stage for the success
of the project
Surveymonkey is one of the examples that allows you to make surveys for free.
Think of the criteria of people you want to
interview – they could all have similar
background or then you might want to
compare for example users and non-
users of a specific service.
Translate the criteria into a screener – a
document used for recruiting. Try to be
specific by thinking what active means for
example.
Use recruitment stage to analyze
believes of the customers and treat the
process as valuable data. If you can’t find
certain kind of people that’s finding (in
itself).
Plan according to the scope of the project
and consider the access to respondents.
Steve Portigal, 2013

47. Building a field guide and planning the exercises that take place in the
field
From research question to discussion
questions and themes.
Plan well and use the guide as a tool that
supports you, but doesn’t restrict you.
How much time you assign for different
sections.
If you are doing exercises, such as card
sorting or map drawing, have everything
you need prepared beforehand.
Steve Portigal, 2013

48. Fieldwork is all about listening to people and embracing their viewpoint
and experience
Leave your worldview behind the door.
Introduce your goals, timetables and
practicalities.
Build rapport.
Listen to, by asking questions and body
language – don’t be afraid of silence.
Feel free to ask stupid and simple
questions – you are there to learn about
their experience and views.
Make the familiar foreign and foreign
familiar. Re-learn from a new viewpoint.
Be prepared to discover emerging themes
and new ways to frame the problem
Think about the usability of your documentation. Make sure you can see and
hear the recordings and understand the notes. Steve Portigal, 2013

49. Thank you!
Contact information
Taneli Heinonen
mail@taneliheinonen.com
www.taneliheinonen.com