Insight is the greatest competitive edge in our business—in any business. Still.

Insight is what drives a company to launch a product that the experts claim will fail—see Walkman. Insight is what changes a boring category forever—see NIKE. Insight is what compels people to use one service over another—see Google. Insight is what drives people to buy and buy again—see Amazon.

What makes insight critical is that it deals with the nature of the issue—the deeper meaning, the motivation, the reason. And, it can often be pre-data.

Pre-Data??

Let me explain. Before the Walkman there were no sales or usage data that could be analyzed or modeled to predict sales of a non-recording portable cassette player. In fact, had you used data alone, you would have concluded that there was no sales potential…as many did, including GE.

To be fair, had you done consumer insight work—interviews, focus groups, usage labs, whatever, I believe an insightful analyst could have used cross industry sales and usage data to draw analogies and to paint an even richer picture of the potential, even though it wasn’t exactly apples to apples. But again, the process would have to begin with real deep consumer insight as in clear and intuitive. I’d argue that the iPod years later didn’t need the deep insight, already proven, but rich analytics using real sales and usage data. Ah!!!!

Make the analogies for Nike, Google and Amazon; it’s all very clear.

We don’t use insight enough. We don’t spend enough time digging deeply into consumer’s needs and motivations, desires and wishes. While we know a lot, we don’t know everything. If we did, industry conversion rates would be higher and so would sales.

So, you know I bought something. You know how much I paid. You know how I paid and maybe even where I sent it. And you know what I bought previously. But do you know why? And why is the key to exponential business.

Check this out: http://youtube.com/watch?v=D3qltEtl7H8

It’s the danger of thinking we know everything…

Or try this: Wired; Issue March 2008; 16.03 (not yet posted on line) story called The Netflix Challenge by JordanEllenberg

So here is the thought:

A desk is a dangerous place from which to watch the world.
~John le Carre

If what we bring to the table is strictly what we pull from digital sources we are shortchanging ourselves and our clients and our business. Our greatest competitive advantage is to take deep understanding, link it to deep knowledge, overlay brilliant analytics and modeling and continue to learn.

Key words. Nature. Clearly; Intuitively; Complex.

Get out there. Work in the bank. Sell a car. Answer an insurance call. Watch people use computer products. And then, look at data. You will bring clarity to a complex world.

Buying a quart of milk is suddenly complex. Or is it?

For the consumer it actually can be simple. I want a quart of milk. I know what type I want. I know its price. And, I know where to go to buy it.

The complexity lies with the retailer who has to vie for consumer attention across an ever growing landscape of choices in both product and service.

CRM—Customers Really Manage—simplicity…. You, the buyer can be in control by limiting your choice and knowing what you want.

CRM—Customer Relationship Marketing—complex…the retailer needs to know a lot about you; has to make key assumptions; requires a huge technology infrastructure…or maybe not.

Let’s go back to the original—“The Store”—stores that our parents or grandparents went to. Walk in with me…… “Hi David, two quarts of skim milk? Would you like some chocolate syrup with that? How’s the misses? Your kids are getting big. ”.

WOW!! Remember that kind of treatment?? What a CRM program they must have had in place!

And, long before computers, they did. It was called service. And they based it on the simple notion that the best competitive action, in a world where anyone could sell a gallon of milk was to make you, the buyer, feel special, feel your business was wanted and appreciated. We all like to go to a place where we are known.

Fast forward to today. Check out all the stories on service. The new “discovery” in retail is that service is important. Analysts are writing about it. Trainers are making killings with it. Hands are being wrung over how to implement, and in short, a new wave of technology will soon be unleashed.

Here is the truth as I see it:

“A complex system that works is invariably found to have evolved from a simple system that works.” – John Gaule

The complex system of algorithms and models, of the web and all its digital siblings, of CRM in all its iterations, is like nothing we have ever seen. Or is it?

Neither simple nor complex is the best desired state. One does not necessarily trump the other.

However, if we understand the simple and remain true to its power (in this case service) and build on what works well, then as we evolve what works will only work better and the next generation will have a new simple system to build on – think on that!

Your views?