Customer Insights: Why you Need Them
Customer insights are your customer’s profound beliefs. They are the powerful missing pieces of the marketing puzzle. Customer insights are so potent that once you hit the mark, your relationship with your customer is forever transformed.
In a nutshell, customer insights help you gain a more nuanced understanding of your customer, change customer behavior, and in effect, improve your business’s bottom line. Collecting and analyzing customer satisfaction metrics will have profound results on your professional success.
In the kind of customer-centric business environment that exists today, it is only natural for customers insights to take center stage in most strategic business decisions.
Customer insights didn’t attain this kind of importance overnight. Their importance has grown over the past two decades. Initially, most businesses’ strategies were focused on the product. This focus gradually moved to the market and subsequently ended up on the customer.
As a result, today’s highly complex and competitive marketing environment makes marketing based on a simplistic demographic-based segmentation of customers ineffective.
It’s like Clayton Christenson, professor at Harvard Business School, said, “The fact that you’re 18 to 35 years old with a college degree does not cause you to buy a product, it may be correlated with the decision, but it doesn’t cause it.”
So, what causes it? That’s exactly what customer insights will tell you. Before we get into the nitty-gritty of it, let’s get a deeper understanding of what customer insights are and how they differ from consumer or market data.
What Are Customer Insights?
Customer insights are your customers’ needs and desires. They can be simple but deep motivations that dictate the way they behave and make purchases. Customer insights are deeply personal and, therefore, sometimes defy the traditional demographic customer segmentation model.
When a business gains customer insight it immediately gains an edge over its competition as it has understood something the competition has not. For a soft drink company, customer insights mean knowing which customers call it “soda” and which customers call it “pop.”
Similarly, for an SUV manufacturer, it can mean installing a foot sensor for automatic trunk release because of the simple understanding that people find it difficult to open the tailgates when their hands are full.
How Are Customer Insights Different from Customer Data?
Collecting and analyzing customer data is a critical part of better understanding your customers. Customer insights are a step beyond customer data, though. Customer insights involve analysis and interpretation of the customer data to find a key truth that ties the data together.
While data tells you the “what,” “how,” “when,” and “where” of the customer behavior, customer insights essentially tell you the “why” regarding customer behavior. If customer data is facts, customer insight is the story or the narrative behind those facts. If customer data tells you how the market is, customer insight tells you why the market is the way it is.
For example, If Betty buys some butter, customer data will tell you where, when, and how much butter Betty bought. However, customer insight will tell you why Betty buys butter, what goes on in Betty’s head when she buys butter, and which butter Betty is likely to buy in the future. Let’s look at how customers insights can help a business:
How Can Customer Insights Help Marketing and Customer Service?
Gaining customer insights can have clear benefits for a business:
#1: Personalized Marketing
When you understand something important about your customers, you can narrow your focus and personalize your marketing messages and support.
Customers not only appreciate being treated individually, but they also respond better when approached with some knowledge that sets them apart from other customers. When your marketing messages and support resonate with your customers you can radically alter customer behavior.
#2: Enhancing the Customer’s Journey
Customer insights can help you find out where in the buyer’s journey, from awareness to purchase, are you losing the customer. Proactive customer support can then be leveraged to fill those gaps. In the end, if the customer has a great buying experience, there will be greater customer satisfaction, which is a win-win for all.
Let’s now look at how businesses can put a strategy in place to gain customer insights.
Actionable Strategies For gaining Customer Insights
Here are the steps that a business can take to develop a customer insight strategy:
#1: Start with The Right Questions
Clearly define what it is that you are looking for. Asking the right question will ensure that you get the right answers.
Is your business in the new product development stage or are you looking to increase your sales with customer insights?
Are you looking for insight on existing customers or looking for new customer acquisition?
Go as deep as you can to refine your questions to get refined answers.
#2: Collect Data
Thanks to the technology today, it’s easy getting lots of data on the customer. Data should be collected from different sources like marketing feedback as well as customer services.
While digital data is key, talking to the customer remains important. Designing surveys with the right questions can also help reach a wider customer base and get a volume of data. This data should also be cleaned up for redundancies and collated in a clear usable form.
#3: Analyze Data
After collecting customer data comes the most important stage – data interpretation. This is the stage where the charts, numbers, and figures will be turned into actionable insights on your customers.
Data interpretation is an art. It helps to put together a team of experts with varied backgrounds to get comprehensive and inter-disciplinary ideas that connect the dots.
#4: Re-Group Your Customers
Your customers have various layers to their personality. Demographics may be just one, but there are so many other ways to segment and study customers. Geographic, cultural, psychographic, persona, and value-based segmentation can offer different ways to group your customers.
Taking broad categories and combining them with different personal preferences, lifestyle factors, values, and hobbies can be an effective way to look at customer behavior.
- Customers insights are deep desires, needs, or motivations of customers that dictate their behavior and interaction with your brand.
- Gaining customers insights can give you a competitive edge and a better ability to influence customers behavior.
- Even though customer insights rely on data, they are different from customer data or consumer data. Interpretation of customer data can help you gain customer insights.
- Customer insights can help a business personalize its marketing message and enhance a buyer’s journey by leveraging proactive customer support.
- Actionable strategies for gaining customers insights: start by asking the right question, collect data, put in place a team, re-group your customers for research.
CustomersFirst Academy offers comprehensive customer service training designed to help you grow your skills and advance your career.
To keep learning and developing your knowledge of customer service, we highly recommend the additional resources below: