Consumer insights are more important than real-time behavior data

When I started my career in manufacturing at Procter & Gamble 20 years ago, I experienced an impactful training simulation that still guides me today. We had a group of about 50 new hires going through orientation and we were split in to several teams all tasked with producing various colors and shapes of Play-Doh using the Play-Doh fun factory.

Each team was tasked to produce different colors/shapes each quarter and then sold their output to “buyers” sitting at a table (simulating retail buyers like Wal-Mart or Safeway) for different prices based on what was popular this quarter. The more you were able to produce and sell of the most in demand color/shape combination the more money you made. Most teams spent their time optimizing their operational strategy for the start of the next quarter; lining up different colors of Play-Doh waiting to learn which shape that they would start to pump when they heard what was in vogue from the buyers.  Many teams made about the same money. But the key to winning the simulation was recognizing that there was a training facilitator who represented ‘the consumer’.  If a team just went and asked ‘the consumer’, they would share what shape/color combination would be popular in the upcoming quarter or two. The more you knew about what the consumer was going to buy the more you could plan ahead of time and prepare lots of inventory to be sold right at the start of the quarter.

This simulation left a career-long lasting impression on me – consumer insights can give you the ‘keys to the kingdom’.

In today’s connected world there are many powerful measurement tools that let you know exactly how users behave when interacting with your product.  Our company uses KISSMetrics, Optimizely, Facebook Insights, Google Analytics, SendGrid, MailChimp and of course our own home-made tools to analyze server and user data. These real-time applications are either free or near-free.  It is remarkable how just about every detail we could want to know is now available in real-time.

But despite this incredible toolkit to understand user behavior, none of them provide the user insights that will be the core to the success of a product.  The data captured from them enables are necessary but not sufficient to make you a great product innovator. Let me explain. You can spend all your time building something you think users will want and then watch every detail about their behaviors. You can then optimize your product to improve performance by some impressive number. But if you are working off a small base an improvement of 100% or 200% really doesn’t mean anything. You are just getting to the top of a small hill (or in mathematical terms, you’re finding a local maxima).

Consumer/user insights are what allow you to identify where the big mountains are. This is where deep functional product management and marketing skills are necessary.  Being a quant jock is great for building applications in which most of the work is done under the hood (like search or online retail), but building a consumer application with interactive workflows requires knowledge of core product/marketing know-how. Best practices in iterative user design, focus groups, follow-me-homes, online surveys and usability testing are all part of the recipe to help find where the big mountains are.

I continue to be amazed at the power of today’s online tools and how much the world has changed in just the last five years in what they can do. However, as good as they are, they can’t replace the fundamental product/marketing skills needed to discover that incredible insight which will give you the ‘keys to the kingdom’.