The Importance of Consumer Insights in Today’s Marketing Strategies
The customer journey has long been used as a way to identify market opportunities for business growth. By tracking the journey, it has been relatively easy to learn what customers want, and how and why they’re selecting products or services to meet their individual needs. However, the average customer journey is no longer straightforward.
Today, the buyer’s journey is not a linear process. While research firm Gartner has identified six standard steps that most customers follow when making a purchase – problem identification, solution exploration, requirements building, supplier selection, validation, and consensus creation – Senior Research Director Steve Rietberg states that customers tend to “execute and re-execute these steps in parallel”; a factor which he says makes it “increasingly difficult to track journeys”.
This, in turn, is making it increasingly difficult for organisations to understand exactly what customers want, and exactly how businesses can give them what they need. The solution is for businesses to place greater focus on learning more about their audience through consumer insight.
What Does ‘Consumer Insight’ Mean?
From a business perspective, customers can often appear to take random actions, and act in a fickle manner; they’re not always easy to read. However, if an organisation had more information about why a customer did the things they did, their actions become much easier to understand. And that’s exactly what customer insight is all about; it provides businesses with a way of measuring and understanding their audience base.
It may seem like an obvious technique to utilise, but customer insight often gets grouped together with similar yet different methods of data collection and analysis which means that it can often be overlooked by organisations striving to develop.
Here is a brief overview of these methods:
Big data focuses on the facts. It can be incredibly beneficial to growing businesses, but it fails to take into account the fact that many purchases are emotional, rather than rational. The Harvard Business Review identified more than 300 emotional motivators across the consumer journey; factors that can’t be explained through facts and figures.
Market research is yet another beneficial technique. However, this method focuses on the broad market landscape, including demographics, competitors, and trends, rather than on the consumer themselves. Market research is a highly strategic approach for gaining a comprehensive overview of the market, but lacks insight into consumers.
Consumer insight can be considered to be the consumer-focused side of market research. Unlike big data, it takes into account the emotional behaviours of audiences, highlighting the reasons why customers act in the way they do. It works to delve deeper into the impact of relevant marketing messages, and helps to determine perception.
Analytics is needed for all three of the above research techniques. It takes the data that’s been collected through these various methods and assigns meaning and context, transforming data into meaningful and actionable information. Through analytics, businesses are able to make data-driven decisions for their future.
While different, all four of these techniques complement each other must be used together to generate a comprehensive overview of the current business landscape.
Why is Customer Insight Important?
The traditional customer journey was first disrupted by the growth of online shopping, and businesses adapted to track these digital journeys. But as the way online shopping has evolved and changed, the landscape has been further disrupted to a point where it’s highly complex, somewhat messy, and increasingly difficult for brands to navigate.
“With easy access to information today, consumers feel almost obligated to shop around. The proliferation of sophisticated sites and technologies has made it much easier for consumers to compare brands, and social media has created greater transparency into what influencers are buying and thinking.
It’s continuously reminding consumers that multiple choices exist for a purchase, and the choices are constantly evolving, making each purchase cycle feel like new” says Dave Elzinga of McKinsey’s Marketing & Sales team. Although each purchase cycle feels like new, customers are still expecting brands to know them well enough to create personalised experiences.
“Broad brush-strokes are no longer enough when it comes to approaching our target audience; there’s a necessity now for personalisation that goes way beyond a guest name in an email,” notes Royal Caribbean International’s Sales Director, Martin MacKinnon. And this is what makes consumer insights so powerful; it allows businesses to better navigate these non-linear journeys to understand needs, understand behaviours, and ultimately see the impact that customer sentiment can have on brand health.
To summarise, some of the key benefits of consumer insights for marketers include:
- Creating detailed personas and customer journey maps through insights
- Uncovering overlooked societal and cultural drivers of purchasing decisions
- Facilitating tailored, consumer-centric marketing strategies
- Enabling brands to make data-driven decisions for their future
- Allowing marketers to allocate and justify budgets across multiple channels
- Ensuring marketers are prepared to adapt to shifts in buying trends
- Identifying discrepancies between supply and demand for growth opportunities
- Showing customers that they’re being heard
Despite these notable benefits, it appears that not all businesses are currently utilising customer insights. According to research by US-based management consultancy BCG, just 50% of business decisions are made using customer insight data. The figures are slightly higher in the consumer packaged goods and consumer durables sectors, yet remarkably low in other industries, including both the retail and automotive sectors.
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How Do I Get Consumer Insights?
Perhaps one of the most important things to remember is that customer opinion and sentiment is constantly changing. This means that the most effective way to get consumer insights is through the collection and analysis of real time data. By using up-to-date information, businesses are giving themselves the best chance to make strategic decisions about their future, optimise campaigns, and allocate marketing budgets for maximum effect. But how do you observe behaviours in real time?
If businesses don’t already have one, then now is the time to develop a strong customer insight strategy. There are three distinct aspects that should be included:
- Journey Mapping: While purchasing journeys are no longer linear, businesses can still map the customer journey to identify gaps that prevent the quick and simple movement from one stage of the marketing funnel to the next.
- Customer Feedback: One of the simplest ways to get consumer insights is to ask customers to share their opinions. There is a prerequisite to this, however. Brands need to build trust with their audience to ensure they’re comfortable sharing.
- Listening: While asking questions can be useful, it’s vital to take into account that customers may not always share accurate or genuine information. Through listening into organic conversations, businesses can gain more holistic insights.
The Top Sources for Consumer Insights
The good news for businesses is that there is an almost never ending number of possible data points that the average customer will touch throughout the duration of their online purchasing journey, resulting in an almost never ending number of potential data sources. Whether customers are actively adding items to their basket, or they’re engaging or interacting with brands in other ways, sources for consumer insights are vast. Some possibilities include internal CRM systems, customer feedback forms and surveys, public sources, competitor analysis research, and social media channels.
Social media is perhaps one of the most exciting and promising sources of consumer insights. Why? Because this is a data point that most customers will touch at one time or another during their purchasing journey. Global social media usage grew from 0.97 billion users in 2010 to a whopping 3.08 billion just 10 years later, highlighting just how important a source the right social media network can be in gaining valuable insights.
Turning Social Data into Consumer Insights
According to former Forrester Vice President and Principal Analyst Nate Elliot, there is a ‘social data disconnect’. He notes that, “most companies try to use social data for something it can’t do: proving marketing success. And when they try to use social for something it can do — providing insights — they very often fail”. And the reason that businesses are failing is because social listening alone isn’t enough to generate insight.
Social listening doesn’t create insight, but it does work to build a foundation for generating customer insights from social media data. Customer research is really a two-part process; it involves collecting data, but also analysing trends to turn online discussions into meaningful, actionable information. But the big question is, how exactly can businesses successfully turn social data into valuable, useful customer insights?
The truth is that social data and consumer insights are only as good as the tool that’s used to generate them. Manual data collection isn’t recommended. After all, with more than three billion users, there’s simply too much potentially useful data out there. And even if there wasn’t, it’s not enough to just see whether audiences feel positively or negatively about a brand; to derive full value from a consumer insights strategy, it’s vital to have the support of a tool that helps to assign context to these sentiments.
Top Tools For Consumer Insight
The type of tool that’s best to use to generate consumer insights really depends on where businesses are planning to get their data from. Tools such as Google Surveys can be useful for asking for customer opinion and gathering customer feedback, for example, while Google Global Director Kim Larson and Insights Lead Jason Klein recommend Youtube Analytics for fast focus group data. For social listening, however, there is a need for a fully comprehensive tool with the extensive features to collate and analyse data from multiple channels.
Social data isn’t too difficult to access. If it’s there and it’s publicly available, then it’s easier for any brand to access. However, what is challenging is ensuring that the data that’s collected is relevant to the business needs. And this is why social listening tools are essential. There are many options out there, including familiar names such as Synthesio, Brand24, Brandwatch, NetBase, and Sprinklr, each of which boasts different features.
How Do I Use Consumer Insights?
Through social listening tools and other relevant solutions, businesses can gain potentially valuable consumer insights. But in order to change these insights from ‘potentially valuable’ to ‘valuable’, brands need to act on their new information.
So, why is customer research important in today’s marketing strategies?
- It Facilitates Personalised Messaging
Research shows that more than three quarters of consumers are frustrated with irrelevant marketing. “Consumers are craving more relevance – they expect companies to understand who they are, what they’re interested in, and when and how they like to be engaged with. That’s what personalisation can deliver in every customer interaction” says Dave O’Flanagan, CEO of software company Boxever. Through an improved understanding of customer need, brands can tailor marketing messages.
- It Increases Brand Awareness Amongst Relevant Audience Pools
Businesses want a competitive edge; they want to stand out from the crowd. And that simply isn’t possible without ensuring strong brand awareness amongst the most relevant audience pools. And perhaps the most effective way to stand out is to offer an experience that these audience pools are craving. With in-depth consumer research, it becomes easier to understand what audiences want, to see how brands can meet these needs, and ultimately leverage this connection to boost campaign awareness.
- It Can Target the Most Valuable Groups
What is classed as a ‘valuable group’ is something that will be different for every business. However, most organisations will consider existing customers to be within this range, with Forrester reporting that it costs five times more to acquire a new customer than it does to retain an existing one. Consumer insights can help brands to understand more about what aspects of the marketing strategy attracted and converted existing customers in the first place, enabling them to allocate more to high performing areas.
- It Can Help Brands Expand Into New Markets With Existing Products
For those businesses considering expansion into new markets, investing in full scale campaigns can be a risky endeavour. Customer insights can help to mitigate this risk. By collecting early feedback from customers, this insight can help marketers to optimise their message and tailor their approach to ensure that campaigns are hitting the mark, that they’re resonating with the right people, at the right time, and that they’re not missing out on any potential opportunities that may otherwise have been overlooked.
How to Get More Value From Customer Insights
Research by Forbes suggests that 87% of business executives don’t believe that they are effectively leveraging all available customer data. And this may be true if execs are focusing on customer insights exclusively as a way to boost market strategies. Consumer insights aren’t just about boosting marketing; they’re about boosting the overall brand.
Here are just a few of the more unorthodox ways that insights can grow a business:
- Streamline the Customer Experience
Customer experience is considered to be one of the major competitive points for businesses, with Gartner estimating that 67% of companies compete in this area. Customer insights work to highlight those areas of operations that are directly contributing towards customer satisfaction, enabling brands to replicate these aspects across the board, and providing an opportunity to address any potential weaknesses.
- Improve Product Innovation Strategy
Customer insights are a fantastic way to delve deeper into what customers are looking for, and what solutions are currently available to them. It helps businesses to identify possible gaps in the market and optimise their product innovation strategy to fill these gaps, ensuring that consumers have access to the solutions they need, when they need them. This can help brands to gain a competitive advantage in saturated markets and grow their presence by identifying opportunities for expansion.
- Enable Product Improvement
Customer insights aren’t just about innovation; they can also help with improvement. By tracking usage of products and services and being quick to identify common pain points, businesses will find it easier to address these issues and improve existing products to ensure that offerings are continuing to meet the needs of customers. Customer insights provide an opportunity to add new features and fix issues as is appropriate.
Don’t Get Left Behind
Investment in customer research is declining, and it’s this growing trend for overlooking consumer insights that is resulting in new business challenges such as uncertainties in where to innovate, an inability to characterise customers, and unfocused marketing and product development strategies. There are clear advantages to investing in customer research, so why are so few businesses choosing to prioritise this area?
There’s a difference between gaining customer insights, and gaining valuable customer insights, and the latter can be challenging. Research shows that just 17% of businesses feel that their understanding of the customer journey is ‘advanced’, with 83% believing that they are missing vital pieces of the puzzle. This is why businesses are urged to partner with an experienced insights partner, helping to remove some of the barriers to data collection and analysis and ensuring valuable insights, every step of the way.
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