Here, we will take a look at the benefits and drawbacks of these two options and what you can do to get the best results from both.
How to Use Customer Insights to Drive Decision Making
Customer Insights (CI) enable businesses to understand customer behaviour, preferences, and needs – a powerful tool for ensuring that marketing strategies are designed appropriately. With this knowledge, businesses can make well-informed strategic decisions, not only in marketing but in areas such as product development.
The overall aim of CI is to make customer-centric decisions that provide customers with what they truly want, give them a better overall experience, and increase revenues as a result.
Businesses that use customer insights can see the bigger picture and identify strategic trends that, when leveraged, are likely to have long-term benefits. The information gathered can also be used to predict emerging trends, thus identifying areas of opportunity.
Smaller companies that don’t have dedicated CI departments still have many opportunities to leverage this data. In this article, we will explore the many sources of customer insights and how to use them to build powerful strategies.
Sources of Customer Insights Data
CI data can be qualitative and quantitative and using both gives you the fullest picture. If you’re using a CRM system, make the most of its data collection and analytics functions; various other sources that businesses can draw upon in their decision-making processes are below.
Surveys help in exploring customers’ current perceptions of a brand and the experiences they’ve had with it. They may also be sent out to gather feedback after a specific purchase.
Surveys are commonly used but they have their limitations – sending out a survey that takes a long time to complete will deter customers from engaging, while one that is too short may not give you the detailed insights you need.
Online reviews can be a powerful source of CI data in areas such as product development. If your business is service based, it can provide insights into how your customer support staff interact with your audience and the type of impression they make, and how this impacts your company on the whole. Reviews are also helpful in identifying the finer details of what customers like and dislike, helping you to refine your unique selling proposition in alignment with what they are asking for.
Analysing online behaviour through tools such as heat mapping software lets you track the digital paths of your customers in order to understand how they interact with your business. From the frequency of their website visits to the length of time spent on each page to what they purchase, you can gather a lot of insights through this method.
Loyalty Programme Analysis
Loyalty programme analysis is an important concept for businesses to consider when looking to create and maintain customer engagement. By understanding which types of incentives different segments respond best to, you can further hone your programme to maximise revenues. One of the best ways to gather data for this purpose may be customer interviews – it will allow for comprehensive discussions into how valuable customers consider your incentives to be and how you can improve.
Online sentiment analysis tools help companies track mentions of their brand, as well as uncover common themes that customers are talking about. These tools help in the analysis of both positive and negative comments people have posted on Twitter, Facebook, forums, and other online communities, as well as in product reviews, and other sources.
This method can provide valuable information that can be used to improve customer service and develop new products or services. Sentiment analysis tools can also be used to track changes in sentiment over time and identify any potential issues that may need to be addressed.
Third Party Data
This is especially helpful for smaller organisations with less resources or new businesses with a small customer base and limited customer feedback. Leveraging third party market research about consumer attitudes keeps you informed on the broader industry trends, which can help inform marketing strategy in many ways.
For online services, observing in person as users interact with your applications helps to uncover what the majority prefer. This may be combined with a focus group session in order to interview users more thoroughly.
You can also collect data on your competitors in many of the above areas. For example, you may analyse their reviews in order to identify areas in which they are underperforming, so you can strengthen your business in those areas and differentiate yourself.
How to Use CI Data
Once you have gathered comprehensive data, how can you use it? A few more suggestions are below.
You can use CI data to segment your customer base if you haven’t already, or to review the accuracy of your current segmentation. From there, you can develop comprehensive buyer personas.
Segmenting customers based on the insights gathered directly from them is advantageous because the categories can be more meaningful as opposed to simply dividing them based on demographic factors such as age and location. While these data points are still helpful, using factors such as preferences and attitudes as a means to segment your audience adds a new level of meaning, enabling you to target them in ways that resonate with them strongly.
Looking at the language your customers use (manually or through sentiment analysis) helps you develop your tone of voice in a way that resonates with them.
Customer Acquisition and Retention
Gathering insights from potential customers helps in acquiring more of them because it allows you to develop appropriate methods of targeting. Data from existing customers can be used in order to increase CLV.
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Product and Content Development
I mentioned earlier about using customer insights to drive product development. CI can also help with content development, ensuring your content marketing plan answers the questions your audience are asking.
Analysing data on website usage helps you to understand where visitors are struggling. You can then make changes to those digital touchpoints and check to see whether conversions have increased.
Improving your Content and Sales Copy
Leading on from the point above, behavioural analytics can show whether users are engaging with your content, and at which point you lose their attention. This will inform areas for improvement in terms of content writing. It will also give you some hints about how effective different elements of your copy is – for example, do readers get drawn in by headlines then quickly click off the page? This may indicate you need to work on the engagement of your body copy. (Again, understanding the language your audience uses and tailoring your messaging accordingly has a part to play here.)
Do users scroll halfway down your sales page then click off? Again, maybe the content is not interesting enough, or perhaps it’s too long for your particular audience. What if they get all the way to the end of the page but don’t convert? Then maybe your call to action is not effective.
Understand Purchasing Patterns
Learning which products or services are more popular on the whole helps you to allocate resources appropriately, in terms of which products to invest more in, which to discontinue, and which to promote to which segment. It can also uncover seasonal trends, again, allowing you to direct your budget in the most effective ways.
Challenges in Using Customer Insights
There are many benefits to using customer insights, but this practice comes with challenges. It requires time and effort to accurately gather data and once you have it, it needs to be analysed thoroughly and interpreted accurately. While other forms of analytics that simply rely on quantitative data will give black and white answers, a comprehensive approach that considers numerous sources, both qualitative and quantitative, will give you the most detailed picture.
If you don’t have the resources to spend time truly understanding the insights, it may not be worth the investment of gathering such detailed data to begin with. In this case, you may want to stick with more basic methods. You can have all the data in the world but it’s of no use if you cannot extract meaningful information from it. CI data is not something that you gather and can put aside; it is an ongoing process that requires consistent follow-up and attention.
In addition, certain data sources are not always reliable. While online reviews can provide useful insight, they are not always accurate and can be subject to bias. Customers may not have properly read the product description, for example, yet blame the company when the product they received was different to their expectations. This emphasizes the importance of having sufficient resources to be able to process the data thoroughly and account for such discrepancies.
Finally, in organisations with dedicated CI departments, there is the issue of conflict between marketing and CI. While they should be working closely together, this is often not the case and marketers will make decisions that are not informed by the rich CI data that is available. Naturally, this disconnect can reduce the effectiveness of both departments and is a sub-optimal approach in terms of directing the marketing budget.
Smaller businesses needn’t make this error. The systemic issues discussed above do not apply in small businesses and therefore, simple communication is all that is necessary in order to gain a greater understanding of the benefits of CI and its potential ROI.
Analysing Customer Insights data is a powerful method for any business that wants to truly have a customer-centric approach to their marketing efforts. There are a broad range of sources to gather data from and if you use a CRM system, you already have a great tool at your fingertips.
When CI data is converted into valuable, actionable insights, you can use it in a myriad of ways, from investing more in developing your staff’s customer service skills, to developing new products, to adjusting the language you use to address your audience in order to elicit the best responses.
Always remember to assess your capacity to thoroughly analyse any data you gather before you start putting together customer surveys and so on. Data is only as useful as the value you derive from it.
If you need assistance with developing your marketing strategy, please feel free to reach out to me here – my team and I will be happy to help.