Today, thanks to technological advancements, businesses no longer need to rely on traditional methods to understand human behavior. In business, such “mind-reading” ability translates into valuable customer insights. Indeed, in a world where data is now the new king, leveraging customer insights can be extremely helpful in beating the competition and driving more informed business decisions.
Keep reading to discover more about customer insights, their importance, the methods and techniques for capturing them, and how these insights can assist in making strategic business decisions.
Table of Contents
1. What are customer insights & how important are they
2. Methods & techniques for gathering customer insights
3. Driving business decisions with customer insights
4. Resonating with customers
What are customer insights & how important are they
Customer insights, often also referred to as consumer insights, are well-researched, data-driven understandings about customers based on data gathered from multiple sources. Utilizing various unique methodologies and techniques, including relevant database technology, extensive customer data are captured and analyzed to comprehend their purchasing behavior and to aid in actionable business strategies that can better respond to and guide customer behaviors.
Customer insights also involve interpretations of customer behaviors and the related changing trends to better understand the customer journey as a whole and gain an in-depth understanding of what they need and expect. In short, the definition of customer insights revolves around data-based knowledge of customer behavior, feedback, and preference-related actions.
Meanwhile, the importance of customer insights is primarily embodied through enhanced decision-making processes that involve critical business operations and processes, including product and service development, sales and marketing strategies such as pricing and distribution channels, as well as customer engagement tactics. All of these decisions fundamentally aim to improve one key aspect of the business: customer experience (CX).
This is achievable after gaining a deeper understanding of customer expectations and being able to provide products and services that meet their expectations to deepen engagement with them. Consequently, customer insights can further solidify and improve the overall sales and marketing position of the business, including increasing the chances of identifying new markets and business opportunities. Ultimately, companies that utilize customer insights effectively can also gain a competitive edge over their competitors in the marketplace.
Methods & techniques for gathering customer insights
While there are multiple methods to gather customer insights, they are mainly collected through automated and manual techniques or a combination of both. To enhance understanding of these methods and to effectively apply them, let’s review them according to these two main techniques:
Automated approach
The automated approach refers to the employment of web-based or online techniques and software used in gathering customer insights. All types of web-based communication with customers, including social media interactions and email correspondences, are examples of such an automated approach. These communication records can then be collected and automatically analyzed.
In the meantime, while many different software, including Customer Relationship Management (CRM) and marketing automation software or platforms, can also play a role in gathering customer data, a more holistic automated approach is via CDP- Customer Data Platform. These CDPs are packaged software that works in conjunction with various customer behavioral, transactional, and demographic data sources, including CRM and billing systems, to get these data collected, unified, and analyzed for further marketing and business actions. Most CDPs nowadays are also fully equipped with AI and Machine Learning algorithms and functionalities such as predictive analytics which can provide dynamic future predictions on customer behavior and decisions based on both historical and real-time data. Examples of CDPs include Oracle Unity Customer Data Platform, Adobe Real-Time CDP, Salesforce Customer Data Platform, Microsoft Dynamics 365 Customer Insights, and more.
Some of the common customer data-gathering methods that are best implemented with these automated solutions include:
- User-generated content: While this is mostly related to social-media-based content, it covers much more, including relevant blog posts and forum discussions. Similarly, automated tools can capture and analyze user-generated content and interactions as part of the data collection for customer insights.
- Online reviews: Online reviews from various sources can be collected and analyzed by different CDPs for valuable customer insights. Online reviews are getting more important nowadays as a recent survey revealed that more than 90% of respondents said that they checked out internet reviews before making any purchase decisions.
- Competitor reviews: Automated tools can be used to collect data about reviews for competitors, just as Sun Tzu accentuated the importance of ‘knowing your enemy’ in The Art of War. From these reviews, businesses can gain insights into their market positioning and how their competitors are perceived by customers.
- Website data: Various website data, including passively collected behavioral data such as the duration customers spent on specific web pages can be collected and analyzed to better understand customer expectations. Specific analytic tools such as Google Analytics and Hotjar are most effective for this purpose.
- Customer service data: Customer service interactions, customer purchase histories, and testimonials are data that can be collected. Automated approaches ensure an all-encompassing insight into overall customer satisfaction level.
Manual approach
- Customer feedback: In practice, this method is often conducted with both automated and manual approaches. Online surveys are the most common automated approach to gathering customer feedback, while hardcopy questionnaires are the typical manual feedback collection method.
- Customer interviews: This method represents a more advanced way to gather feedback compared to standard surveys or questionnaires. One-on-one interviews are most common for more direct and qualitative insights. The manual process is imperative in the collection and interpretation of these interview results.
- Internal teams: To gain a more comprehensive understanding of customer insights, It’s equally important to understand how staff members who work closely with the customers think. Echoing the ancient wisdom of: “He who knows others is wise, but he who knows himself is enlightened”, this also serves as a chance for the company to gain deeper self-awareness.
- Third-Party Data: Information acquired through third-party websites or gathered from competitors is normally subject to manual analysis for qualitative interpretations.
Driving business decisions with customer insights
Personalized customer experience
Properly collected and well-analyzed customer insights can lead to more tailored business decisions from various business aspects, whether in terms of communication with customers, product recommendations, content strategies, sales and marketing campaign execution as well as customer support.
Through the customer data unification feature of CDPs, invaluable customer insights can be derived to devise personalized customer journey orchestration, which eventually helps to adeptly enhance the process of planning and analyzing every step of customer interaction with the companies.
Improving product and service offerings
Using customer insights to identify customer needs signifies the initiation of new chapters in product and service development for many businesses as the inception of both a data-driven and customer-centric product development approach.
Instead of following the traditional product development path that is highly dependent on historical data, customer insights allow companies to focus on customer needs and areas where improvements are necessary based on their real-time feedback. Optimal product features can hence be developed in line with both business goals and customer satisfaction, rather than relying on industry trends and traditional market research data.
Optimizing marketing campaigns
With real-time customer insights, marketing strategies, and campaigns can be more targeted and adaptable to updated trends and customer behavior. This allows for more tailored marketing efforts that customers can better resonate with based on the gathered insights.
Up-to-date customer journey mapping and comprehensive data collected and analyzed from multiple sources further improve overall marketing strategies and planning for upcoming campaigns. This enhancement is realized through a combination of data management and predictive analytics that focus on customer preferences and eliminate common pain points to improve branding and launch more impactful types of campaigns.
Enhancing customer retention strategies
Customer retention initiatives can be optimized by leveraging customer insights through various perspectives. From overall product development, product and customer service quality, as well as customer support points of view, the likelihood of customer retention can be greatly increased with comprehensive improvements in these areas.
At the same time, the overall customer retention strategies can be fundamentally transformed by understanding why and how customers behave and what truly motivates them. More precise and effective retention strategies can be developed to better address their needs. The power of predictive analytics also indicates that customer churn can be more accurately forecasted, allowing for the development of more targeted strategies to mitigate churn.
Resonating with customers
Essentially, customer insights are all about tailoring the customer experience to align with what customers want. Companies need meaningful customer insights so they can better resonate with customers to enhance customer experience and drive loyalty.
Both automated and manual techniques can help in gathering customer insights but with different focuses as manual techniques typically concentrate on more qualitative aspects, which still rely heavily on human interpretations. Using these two approaches, or a combination of both, customer insights can be effectively obtained through various methods, which eventually form part of the comprehensive sources of customer insights alongside other transactional data or CRM software data. From personalized customer experiences to enhancing customer retention strategies, customer insights have proven instrumental in helping businesses make more strategic business decisions.
For more up-to-date information and guidance on customer insights, visit Chovm.com Reads regularly to stay informed about the latest international wholesale business trends and best practices.
