The untapped potential of customer insights for innovation

The paper, co-authored with Professors Elke Cabooter (IESEG School of Management) and Ivan Guitart (EM-Lyon Business School), is forthcoming in the Journal of the Academy of Marketing Science (an FT50 journal). It empirically documents the underuse of customer insights and addresses long-standing gaps in the literature, such as a need to synthesise a fragmented literature, and to understand how to leverage both analysis and intuition when generating customer insights. It then offers a comprehensive framework that both academics and industry professionals can apply.

The critical role of customer insights: field evidence

The paper highlights the crucial impact of the extraction, dissemination and application of customer insights on innovation success. The researchers note that companies’ underutilisation of customer insights is not just a missed opportunity, it is a fundamental flaw that may contribute to the staggering 61% failure rate in new product launches within their first two years, largely due to insufficient understanding of customer needs. This work synthesises the fragmented knowledge on customer insights, offering a unified definition.

The research draws on data from 12 in-depth interviews with senior executives at major market research agencies (e.g., Ipsos, Kantar, Nielsen, IQVIA, and GfK), as well as a survey of 305 managers across diverse industries. Both market research executives and innovation managers note that customer insights for innovation are underused. ‘What still surprises me a lot is that there are many companies out there who don't use insights at all. They seem to just innovate based on their gut feeling about a prototype. Especially companies in the small and mid-size segments,’ one of the executives remarks.

Key insights

The study identifies ten domains of customer insights—such as crowdsourcing, co-creating, observing, and testing— and synthesises key learnings from academic literature in each of these domains to help firms leverage customer insights for innovation better. The authors also document a troubling statistic: more than a third of firms significantly underuse customer insights that require both analysis and intuition, such as crowdsourcing, co-creation, imagining, and observing. For example, 48% of managers reported low use of crowdsourcing as a source of insights.

In addition, the authors present an easy-to-apply six-step framework to help companies streamline the generation, extraction and application of customer insights to validate innovation. The process helps firms strike the right balance between analysis and intuition by emphasising key activities such as customer data generation, sensemaking, visualisation, and the application of insights in decision-making. This structured approach aims to help firms move beyond intuition-based decisions to more evidence-driven innovation strategies.

Improving innovation through better use of insights

This research isn’t an academic exercise – it’s a call to action for companies to rethink how they use customer insights for innovation. For instance, the study highlights the underutilisation of customer insights, particularly in domains requiring both intuition and analysis, such as crowdsourcing and co-creation. The authors suggest that businesses should recalibrate their processes to increase the use of these types of customer insights in innovation decision-making. ‘We see a significant gap between the current use of customer insights and their potential impact on innovation success,’ the authors argue. ‘By adopting a more structured approach and leveraging the ten domains and the six-step framework we’ve identified, firms can significantly improve their innovation outcomes.’