What if you had the ability to understand what others want and need beyond verbal communication? It sounds like an ability only invented for the Marvel universe, but your business can also access it.
It’s called customer insight, and it’s your business’s secret weapon for generating more revenue and gaining loyal (read: repeat) customers. It gets your product and services in front of the right people at the right time. Talk about saving the day for countless consumers who had to live without your business until now.
If you’re ready to accelerate sales like wildfire and leave happy customers in your wake, it’s time to answer “what is customer insight?” and look at how you can harness this superpower.
What Are Customer Insights?
Customer insights come from an analysis of data (both qualitative and quantitative) on your customers or market. They help organizations better understand how to serve and appeal to their current customers, expand their product or service offerings, or enter a new market. Businesses may have thousands or millions of data points, but these need to be translated into customer insights to make them meaningful. For example, just looking at the raw survey results of a survey that went out to thousands of customers isn’t going to be useful, but looking at trends that emerge, like 70% of customers saying they prefer a certain brand, can help businesses make more informed decisions.
Businesses can use insights to tweak existing products or introduce new ones that are likely to sell well. Additionally, customer insights can help shape a company’s branding, customer support channels, and business decisions that can help them better serve the needs of their customers.
Why Are Customer Insights Important?
People want to buy goods from companies that understand who they are and what they want. They may not be consciously aware of it, but consumers gravitate toward brands that share their own values, style, and voice or brands that exhibit traits they wish they had. Some companies may be able to guess exactly what values or traits their consumers want with pure luck or by extensive trial and error, but using data to reach these conclusions is a far more efficient method.
Companies that use data to make decisions regularly perform better than those that don’t. Customer insights can give you a major edge over your competitors, especially if they haven’t hopped on the data bandwagon.
Benefits of Customer Insights
Besides the overall goal of selling more, consumer insights can help businesses in many other important ways. Some of the main benefits of consumer insights include the following.
Personalized Customer Experience
Companies that can make the customer experience feel more personalized can capture the attention and business of those most likely to be interested in what they offer. Customer insights can also help steer your customer experience in the right direction. This can also help convert one-time customers into loyal fans and advocates for your brand, which can help you save on advertising dollars while generating more revenue.
Determine Ideal Prices
Prices that are too high can drive away customers, and prices that are too low don’t produce the profits they should have per unit sold. Customer insights can help your company determine which costs are appealing enough to customers while still producing a worthwhile profit.
Discover Common Pain Points
Most consumers seek products and services to help them solve a problem. Companies with insight into common pain points can design solutions to help customers feel understood and excited to purchase something that can solve their problems.
Customer insights show key demographic information, as well as the behavioral trends of potential customers. This information can inform your marketing efforts to allow you to get more bang for your buck with ads and email marketing campaigns. The better informed you are when creating digital marketing campaigns, the better conversion rate you are likely to see.
Enter New Markets
Many companies think they know their target market, but what if other audiences may be interested in what you offer? Customer insights can show you which new markets are most likely to gravitate toward your brand, which can help your company grow exponentially.
More Accurate Inventory Forecasts
Trying to predict inventory on your own can lead to an overstock of goods or a backlog of orders that are difficult to fulfill promptly. Using customer insights for more accurate inventory forecasts helps you determine how much of each product you’ll actually need.
Predict Customer Churn
Customer churn is the unpleasant measure of how many customers your business has lost in a specified timeframe. Customer insights can help you predict customer churn to proactively prevent it, which can preserve or increase your revenue in the short and long term.
Optimized Customer Lifetime Value
Making one-off sales still generates revenue, but forging relationships generates repeat customers. Having a deeper understanding of your customers through customer insights can help you determine their potential lifetime value while also helping you optimize that value.
How to Collect Customer Insights
The first step in using customer insights is to collect data that can be analyzed and used to make smarter business decisions. There are numerous ways to collect data, but not all are helpful and can provide valuable insight. Here are eight ways to gather data that can produce meaningful insights for your business.
1. Feedback Surveys
Gathering the opinions of customers after a transaction can give you plenty of information about the purchasing process, how satisfied they are with the product, and more. Feedback surveys can come in the form of a numbered questionnaire, or you can include short answer portions that allow customers to give feedback in their own words. It’s best to keep feedback surveys short and sweet to ensure that you get enough completed surveys so that your data pool is large enough to provide insights.
2. Customer Sentiment Survey
How do customers feel about your brand? It can be difficult to tell unless you explicitly ask!
Customer sentiment surveys can help you understand how your brand is perceived, whether good, bad, or neutral. These surveys can also help you determine which new initiatives may be needed to improve brand perception and which aspects of your company your customers find appealing or admirable.
3. Behavioral Data
If your organization uses email managers, online shopping tools, or social media platforms, you probably already have a lot of behavioral data at your fingertips. Behavioral data can give your company insight into the actions customers take. This can inform you how to tailor your website or marketing campaigns to get more customers to do what you want them to do.
Collecting product reviews and studying their language can give you data about how your product performs and whether customers are happy with their purchase. It can even inform you about how they use your product in ways you may not have thought of but that can inform marketing messaging in the future.
5. Sentiment Analysis
Sentiment analysis uses natural language processing to see whether a text group is positive, negative, or neutral overall. Companies can use this technology to see how people feel about their brand or offerings without reading mountains of text.
6. Support Tickets
Customer support tickets can provide valuable information about the problems your customers face most often. Discovering the most common issues enables you to fix them for a better overall customer experience.
7. A/B Testing
A/B testing involves tweaking small aspects of marketing materials or tools to see which performs better. Conduct A/B testing with email marketing, checkout processes, color schemes, and more.
8. Focus Groups or Customer Interviews
Although time-consuming, interviews or focus groups can allow customers to better express their thoughts or feelings about your company and its products. When customers can speak about their perceptions, it can uncover powerful insights.
The Future of Customer Insights
While it’s true that nobody can truly predict the future, businesses that use data and customer insights stand a far better chance of surviving and thriving, even when things get tough. Consumer and customer insights can improve a company’s decision-making, which can help organizations pivot more effectively when new technology emerges, or other disruptions occur.
Using data to predict trends and to understand customers better is not a perfect practice, and there are margins of error. At the same time, companies who embrace these new data-driven methods will also have an easier time generating innovative strategies to stay ahead of industry challenges, cementing their reputation for being ahead of the curve and understanding their consumers better.