A study conducted by Forrester revealed that “More than 90% leaders agree that their overall success as a business relies on data that is timely, accurate, complete, and accessible. But data is only useful when it is transformed into insights, which is why nearly that many respondents see customer analytics as a critical competitive differentiator.”
It is a rising trend that brands invest millions of dollars in gathering customer data, paying a lot of money to market research firms, conducting studies one after another, and frequently trying different methods and techniques. But are they working?
All this data can be available to your competitors as well. So, these don’t contribute anything special to your brand and differentiate you from others, and they can’t offer a competitive advantage for your company.
To outscore in the market and differentiate yourself in the eyes of customers, you need to adopt a system of privileged insights that are processed from the detailed and granular data exclusively gained from your customers, multiple channels, touchpoints, and your internal system that is entirely privy for your company.
Those insights will be unique, applicable, and relevant to your company. And they will be an excellent source to understand what your customers like and dislike, their distinct journeys, personas, and behaviors and actions.
Using that, top leaders can take the right actions to overcome certain hurdles, improve the current experience and ultimately boost the bottom line.
What is Customer Insight?
Customer insights or consumer insights is the interpretation of customer data collected from multiple sources. From this, brands can deeply understand customer behavior, journey, preferences, pain points, and trends. Insights are available as actionable motivations that leaders can analyze customer experience by connecting points.
What is the Importance of Customer Insights?
Customer insights can reveal much information about the current market, product/service performance, and customer behavior and actions. Drilling down too deep into the insights and analyzing them will help you in better decision-making and build new strategies to impact the bottom line positively.
Here are 7 benefits of executing a customer insights process in your organization.
7 Benefits of Implementing Customer Insights
1. Increased Customer Lifetime Value
If you understand customer expectations, needs, and pain points from the insights, it's easy for you to resonate with them in the experience you provide to satisfy their needs. Satisfied customers will convert into loyal customers, increasing lifetime value through repeated purchases.
2. Curate Marketing Ads
All customers are different and in different stages of their purchase journey. So, catching their attention requires different strategies. If you use the insights, you can check what kind of messaging can attract different types of customers. For example, The promotions & deals you offer for a frequently buying customer will differ from the deals you send to new customers.
3. Personalized Customer Experience
Customer experience personalization is an emerging trend since all customers expect an experience that uniquely satisfies their requirements. Capturing insights allows you to identify different customer segments, their journey, and their needs. This will enable brands to design personalized experiences.
4. Inventory & Supply Chain Forecasts
In the insights, you can see which product has high demand in the current market and which has hit high sales. Based on that, you can forecast upcoming sales performance and arrange the inventory supply and distribution seamlessly.
5. Explore New Markets
When you get insights on the current market, the rising customer preferences, trends, brand equity scores of you and competitors, and emerging brands and the reasons for their higher market value, you can build strategies to explore new markets and find ways to capture more market share.
6. Pricing Strategy
Knowing how much customers are willing to spend and which price band is comfortable for a large group of customers will help set the products' pricing. Insights can reveal a lot about this. This will help you increase sales and ROI.
7. Predict the Churn
Higher reporting of negative customer reviews and experiences, changes in their buying behavior, and whopping decreases in the sales of certain products signal upcoming customer churn. The insight is a great source to track these symptoms of customer churn.
With insights, you will know why your customers left you, what makes them choose your competitors over you and vice versa, and what factors stimulate churn. This will help you find solutions to increase customer retention.
To enjoy the privilege of insights, a company's entire customer insights process activities should be enabled with detailed and comprehensive steps. Let's check those processes in detail.
How To Collect Customer Insights?
All data isn't relevant to be converted into insights. There are many of data, but we need what is required to achieve our goal. It should be like separating signals from noise because the primary goal of gathering insights is to get to valid conclusions and make informed decisions.
Check these 10 sources of data from where you can consider collecting insights.
1. Customer Reviews and Feedback
Capturing your customer and competitor's customer reviews is a great way to understand your target audience. When you go over your customer reviews, you will get to know your customers' perceptions of how well your product/service is performing, what the drawbacks are, and what they miss in you and find in your competitors.
This will allow you to incorporate the required amendments and changes in your brand to resonate with customer expectations. Find those reviews from Google, websites, social media platforms, and other sources like Yelp and the Better Business Bureau.
At the same time, when you check your competitors' customer reviews from available sources, you can understand what they offer to customers, what customers get, what is missing in them, and where the gaps you can fill are. Understanding the shortcoming of competitors help you position your brand as the solution customers ultimately want.
2. Customer Surveys
These surveys can be distributed on-site or post-purchase with an open-ended question, point-based and multiple-choice questions on the website, social media platforms, email, etc.
This allows you to get the overall sentiment of a large group of people toward your brand. Also, you can prepare different survey questions for different cohorts. For example survey question to a loyal customer can be "What do you think we should improve?" and a question like "How did you find out about us?" can be sent to new customers.
Capturing these will give you great insight into the overall customer sentiments.
3. Your Website & CRM
Tracking your customer interactions with your website and the connected Google Analytics and Search Console helps to capture 3 types of insights.
- Understanding which keywords led customers to reach your website, which page and content attracted them, how they navigated to a specific page, on which page they spent most of their session, etc.
- Capturing demographic details like name, gender, location, age, device, etc.
- Other campaign-related details like which page could drive more sales and convert leads.
In addition, referring CRM platform allows getting details on customers' purchase behavior, journey, reported issues, etc.
4. Social Media
Social media platforms are a treasure trove for customer insights because customers do not hesitate to say good and bad things about their experience with a brand in their reviews, posts, and comments.
To get more customer insights, you can openly ask for customer feedback and post polls to get their responses. Social media analytics is also a great source of customer insights.
5. Customer Interviews
Sometimes customers may feel reluctant to type a long online review and skip surveys. Customer interviews are a solution here. Interviews are one-to-one in-person conversations so that you can understand their real emotions and the whole story of their experience. This helps to capture the nuances and micro-moments in their journey that needs improvement and will result in a great customer experience.
You can ask questions like how they found you, how your brand helped them to fulfill their tasks, why did they choose you over other alternatives in the market, what you need to improve in their perspective, and which feature of your product/service they like most/needs improvement.
6. Case Studies and Customer Success Stories
Case studies and customer success stories are different types of interviews where the customer story will be shared in long texts, audio, or video forms.
From these sources, you can figure out how they found you, how the product satisfied their needs, solved the issues they had been facing, and what feature of your product resolved it.
7. Third-party Sources
You can depend on market research companies to gather customer data and derive insights. They can provide detailed customer insights into your target market and niche. This will help you curate a marketing campaign, satisfy customers with better offerings, develop great empathy, and resonate with them in the experience you provide.
8. Competitors' Website Data
Indeed, you won't get any direct access to your competitors' websites. But third-party tools like Semrush, Ahref, Sprout Social, MozBar, etc. can give details on the target keywords of competitors, on which keywords they rank more, which content piece of them got better ranking, and some details on their campaigns.
9. Predictive Models
Many brands have already started using predictive models for their decision-making. Its AI and ML integrations and use of statistical models and algorithms allow it to analyze a bulk amount of data and generate insights. This helps to make 'predictions' in the future customer experience.
10. Real-Time A/B Testing
To get insights on specific aspects of your customer's experience, you can run A/B testing on different points of their journey. This will give more details into what works with customers.
For example, if you want to get insights on website appearance's influence on customer experience, you can run A/B testing on navigation, button placement, button color, website theme, etc., to check what works and doesn't.
Use Cases of Customer Insights
1. Customer Insights help QSR brands improve their customer experience
In a study on finding the emerging trends in the customer experience in the QSR industry by analyzing 128K customer reviews of 19 leading QSR brands in the USA, it was found that there are mainly 5 aspects that make the customer experience more positive.
The study pulled the data during 2021 - 2022, the post-pandemic time when the QSR industry underwent substantial changes.
When dug even more deeply, it found that people started to like off-premise dining, like home delivery, drive-through, and online ordering, rather than dine-in. The role of pandemic accelerated this new culture even more.
Easy availability, quick ordering options, and seamless app performance also come under the ‘convenience.’
These insights helped QSR brands improve their customer experience and place their brand as the most convenient option in the market.
2. Customer insights helped to identify unexpected Factors that Lead to Negative Experiences in the Air Purifier Industry
A study on the customer experience in the Air Purifier industry captured the insights that Air Quality, Less Noise, Air Flow, Ease of Use, and Overall User Experience make outstanding experiences for air purifier customers.
All these are the fundamental specifications of any air purifier, and most brand does it well. But still, many brands got negative customer feedback, which impacted their sales.
The insights on the concerns revealed that the high brightness of the LED light on the air purifier spoils the customers' overall experience even though the air purifier purifies the air efficiently.
This insight helped brands work on their lights and regain customer satisfaction.
How to Implement Customer Insights Process?
There are 4 steps in enabling the customer insights process.
1. Set Up Your Team
People who are confused with the ideas, not potential, and without analytical skills can’t produce better results with this entire process. So choosing the right members of the team is essential.
These team members should be capable of asking questions and should be flexible enough to accommodate the required changes in the plans at any time.
They should ask questions and be clearly aware of the following factors:
- What are the goals of executing the customer insights process?
- What would be the expected bottom-line and top-line results of the process?
- How much does the management invest in the process?
- What is the duration required to establish the entire process?
- Who are the people responsible for the process?
If the team is well-clear of all details from conception to the final execution, you can go to the next step. Always ensure the team keeps asking strategic questions and is well aware of each stage, like what they are doing, why they are doing it, and how they are doing it.
2. Understand Your Target Audience
The more you narrow down and focus on your target audience to get insights, the more the insights will be relevant and precise. It’s easier to catch the big fish from a small pond than bait the hook in an ocean.
You can focus on the audience based on your criteria, with which you can gather relevant insights. So identify your target audience segment based on the unique customer characteristics you defined.
For example, if you want to gather insights into why there is less customer retention rate, you can focus on the following audience:
- People who visited your website and mobile app for the past 2 weeks.
- Customers who didn’t visit your website next time after their first purchase.
- Customers with a tendency to churn.
- People with abandoned carts.
- People who did not finish the checkout process/payment.
- Visitors who spent more than x amount of time on your website but did not make a purchase.
If your insights system works well with small audience segments, you can expand the audience volume later as per the requirements.
3. Decide the Data
Deciding which data to go through the process is the next step. We don’t want to get all the data to generate insights. We require relevant data to generate the insights we are looking for.
For example, if you want to understand the reason behind the poor customer retention rate, you need to get the data around customer purchase history, website or app visitors’ history, CRM tickets, live chat, etc.
When you collect more related and connected data points, more precise and actionable insights can be generated.
In addition to the above data sources, brands can also capture first-hand information from customers using on-site and post-purchase surveys. This data will be raw and specifies customer concerns, expectations, and needs explicitly compared to other sources. Transforming these feedback data into insights can contribute even more.
So, capturing the right and relevant data is vital.
4. Transform Data into Insights
Once the team, audience, and data are defined, the next step is choosing a centralized customer insights platform to derive insights. Selecting a robust customer insights platform is essential at this stage.
The tool should be efficient, reliable, and able to process different types of data from various departments to glean insights that must be useful to align marketing campaigns, other business operations, and initiatives to improve the overall business bottom line.
The customer insights platform you choose should be able to:
- Gather different types of data from multiple sources.
- Identify various customer behavior patterns and make groups of unifying personas.
- Identifying different customer journeys.
- Understanding touchpoints, frictions, and pain points in customer journeys.
- Granular level data analysis option.
- Detailed customer insights with drill-down and filter options.
- Specifications to compare the insights on top drivers with competitors’.
- Provide the current position of your company and competitors in the market.
All these insights will help you understand why a specific experience occurred, the pain point, and what caused that pain. Furthermore, which channel witnessed more pain points, why it happened to that particular channel, why did customers choose your competitors over yours, why they churn, and so on?
If the customer insights platform provides comprehensive and precise insights, team members can do logical analysis and find connections between more than one insight to figure out the right solutions.
Establishing a customer insights process in a firm is not a tedious task if done systematically and strategically. If the responsibility of the entire process from its conception to execution is in the right hands, the data collection, audience analysis, and installing a customer insights tool can be done efficiently.
And these whole activities can be established for achieving significant business goals and avoiding any threat to the bottom line results like reducing churn, fine-tuning marketing campaigns, introducing new customer service channels, etc. It all depends on the leader who leads the entire process, the tool you choose, and the team members who work with it.