This is the first posting in a four-part series on business insights.
When I am asked to describe my job I often answer that I extract useful insights from customer data. I have settled on this brief job summary for two reasons. First, it’s accurate. Clients do not ask for tables of descriptive statistics anymore. They want to know whether the data validates their new initiative or if there is an undervalued market segment they can capitalize on – companies want insights, not information.
The second reason I use this job summary is the term “insight” resonates with the business community. It is a popular business concept right now – the Wall Street Journal even has an entire online report titled “Business Insight.” Businesses are awash in data and are amassing more and more every day. They are desperately trying to wade through this data to find the insights that are relevant and useful.
I recently read an article in the most recent edition of Marketing Research (Winter 2008) that provides some interesting insights about insights. The article, “Unleashing Hidden Insights” by Marco Vriens and Rogier Verhulst, is a comprehensive overview of a “semi-standardized” framework for extracting valid and impactful insights from data.
Over the next four postings I will be summarizing and extending upon the points I find most useful within this article. Four postings may seem like a lot on any one topic, but I believe this topic is central to nearly any business that wants to compete in the current marketplace.
First, let’s define what an insight is. According to Vriens and Verhulst, a business insight is:
A thought, fact, combination of facts, data and/or analysis of data that induces meaning and furthers understanding of a situation or issue that has the potential of benefiting the business or re-directing the thinking about that situation or issue which then in turn has the potential of benefiting the business.
I like this definition because it focuses our attention on increasing understanding for the purpose of benefiting the business. It doesn’t require the finding to be earth-shatteringly new or statistically precise or the result of advanced analytics. What’s important is having good data, smart people, and a structure or culture that increases the chances insights will be used by the business. The remaining three posts in this series will address these issues and provide some, hopefully, useful insights for you.
My next posting will discuss the two main types of insights and the different ways each one can impact your business.
Troy Powell, Ph.D.
Vice President, Statistical Solution