An Introduction to Consumer Insights
“Know Your Customers” is a mantra that businesses across all industries have been chanting for a while now. Getting a hold of your consumer’s needs, requirements, and preferences would allow you to better align your business accordingly and reap long-term benefits. As a result, several reputed market watchdogs are churning out regular consumer insights and analytics periodically to aid organizations in meeting their goals and make them more future-proof.
But do these reports hold any value? What are these “consumer insights” in the first place? And most importantly, how can you use it to further your enterprise? Let’s take a look.
What are Consumer Insights?
Consumer insights involve gaining an understanding of your clients by harnessing customer data that factors behaviors, traits, experiences, and feedback to create a living and breathing ecosystem driven towards the improvement of the product or service.
The resultant consumer data decomposes customers into a set of variables and characteristics that allow businesses to answer questions surrounding ideal customer profile, target audiences, buyer’s journey, patterns, perception, customer sentiment, and customer lifetime value.
In simpler words, consumer insights are the window to what a customer thinks or feels about a business.
Prerequisites for Deriving Consumer Insights
Naturally, consumer insights cannot be conjured out of thin air. For consumer insights to deliver true value, businesses will require:
- High-Quality Data: Since insights would be extracted from customer data, high-value and actionable insights would only stem from equally high-value, relevant, and qualitative data.
- Analytics Team: A dedicated analytics team would lend language to the findings from the data. They play a key role in interpreting what customer data signify and indicate.
- Feedback: In addition to the customer data already present with your organization, you will also require customer inputs. After all, a part of consumer insights is listening to what your customers have to say.
- Audience Segments: Not all customers are created equally. Similarly, different customers will have varying experiences or sentiments towards your business. To demarcate the findings, you must categorize the customer base to maintain objectivity.
Different Types of Consumer Insights
The different types of consumer insights include:
- Firmographic data
- Usage information
- Customer loyalty information
- Customer service data
- Competitor analysis
- Socio-demographic data
- Brand perception
- Market research
- Trends analysis
- Customer surveys
Importance of Consumer Insights
Consumer insights offer businesses the opportunity to tailor their products and services to the needs of the customers. Such considerations can drive up sales by nearly 85% and rake in more revenue.
With such attractive benefits lined up, let’s gain an overview of why consumer insights are important:
- They maximize customer lifetime value (CLV) by anticipating customer needs and allowing businesses to adapt to these and deliver richer customer experiences.
- They allow companies to deliver personalized experiences and interactions that are relevant and valuable to the customers.
- They help with forecasting demand and inventory planning and management that plug in any potential revenue leakages or excessive markdowns.
- They allow businesses to predict churn, which may trigger reparative action for mending customer relations or estimating revenue dips and losses.
- They guide marketing efforts in running targeted campaigns that will drive conversions and send relevant promotions.
- They perform a value versus cost analysis from the customer’s perspective, which enables businesses to make optimal product/service pricing decisions.
- They support companies in making informed decisions while diversifying their offerings or withdrawing from underperforming markets.
- With customer insights, businesses can gear up for market/industry trends that will allow them to scale to demand.
- It allows composite businesses to measure and analyze the sales goals and achievements of every store/outlet operating under the management.
How Can Businesses Leverage Consumer Insights?
Now that you realize the importance of consumer insights, you may be eager to watch them in action. The following are some practical and actionable ways through which you can leverage consumer insights:
Even if you are a Goliath in your respective industry, don’t leave room for a David to take you down. Consumer insights act as your eyes and ears that collect customer sentiment and perception towards your business and that of your competitors. Gaining an understanding of where you stand in the market allows you to elaborate on why customers choose you. At the same time, it is also a reflection of what customers value in your competitors that lends direction on how you can improve.
Increase Customer Base
You can use consumer insights strategically to sense dissatisfied customers who are being serviced by your competitors. Such consumers are willing to make the switch, which makes them hot leads and qualifies them for effortless takeover. By targeting them through perfectly time marketing campaigns, you can poach these clients and increase your customer base.
Review Customer Journey
Consumer insights offer a bird’s eye view of the customer journey with sufficient control to scrutinize every stage at the desired granularity. As such, you can use it to streamline and optimize the customer journey and make it more seamless and rewarding for enhancing the customer experience, by eliminating the bottlenecks and adding value to the sales and marketing funnel the journey from awareness to purchase to advocacy.
As industries shed the convenience of mass marketing and move towards tailored marketing, consumer insights can be a key governing factor that can determine the right approach and strategy to drive desired results. Given that personalization helps businesses communicate effectively and unambiguously, it has become a key differentiator, especially for saturated sectors. By appealing to prospects by leveraging their areas of interest, you will be tipping the scales in favor of higher conversions.
Improve Customer Support
As stated previously, consumer insights allow businesses to understand how satisfied or dissatisfied customers are with their products and services. Accordingly, you can take action to improve your offerings and align them with customer expectations. And in the spheres where such adjustments cannot be made due to some justifiable reasons, you can focus on beefing up the customer support and service to offer resolutions that can assuage even the most disgruntled clients.
Reward Customer Loyalty
Brand loyalty is a powerful consumer sentiment that indicates their preference for your brand. Accordingly, such a trait must be duly acknowledged and rewarded to retain such high-value customers and to inspire others to follow suit. Further, consumer insights can help identify commonalities between such high-value customers so that you can drip-feed rewards to potential brand advocates and keep them hooked.
Constant Improvement and Diversification
As mentioned over and over again, consumer insights discover the scope to improve the product and service offered by businesses. At the same time, it helps with the discovery of complementary and related markets and opportunities that you can capitalize on by making smarter decisions.
Consumer insights have propelled several new and established businesses to new heights.
Whether it is through internal data, algorithms, or a mix of both, obtaining such data may be tough and will require a significant amount of effort. However, the returns businesses will draw from it would be stellar, which makes the exercise well worth the effort. Organizations can use it to expand their base, venture into different segments, strengthen the brand experience, retain customers, and develop long-term resilience. With such promising benefits, it would be a crime to miss out on harvesting this low-hanging fruit.
With such valuable data driving business results, the only way is up!
AskSid is a global conversational solutions company that partners with retail brands to elevate shopping experiences by leveraging the power of Artificial Intelligence. Our capabilities extend beyond support automation, extending to insight extraction, analysis, and business opportunity generation, all by leveraging the power of conversational data. We combine domain expertise and cutting-edge technology to build a Retail AI Brain for our clients, that mines insights from conversational data and becomes the basis of the business opportunity creation we offer. The power of actionable customer data has allowed us to create value and bring change to global brands including AkzoNobel, Danone, Wolford, Akris, and Himalaya. AskSid has live implementations in 23+ countries and supports 100+ international languages, managing millions of satisfied customers the world over.
Looking to deploy a vertical AI-based digital shopping assistant for your retail business?