A good product or service alone will not ensure your company’s success. So what lies at the foundation of any successful business? The answer is simple: a deep understanding of your customers’ needs, wants, interests, likes and dislikes. This type of deep understanding is called customer insight.
Businesses are increasingly coming to terms with the idea that they cannot create effective business strategies without good customer insights. This is evidenced by the fact that 56 % of customers stay loyal to brands that “get them”. But this is also where the problem lies: not just any insight is a good insight.
So what makes a good customer insight? Generally, a good insight will tell you at least one of the following:
- What your customers are doing or feeling
- The reasons behind customer behavior or sentiment
- What your business can do to improve customer experience and satisfaction
In order to be a good insight and provide this information, any customer insight should exhibit the following four key characteristics: focused, actionable, authoritative and surprising.
Let’s dive a little deeper to see what each of these characteristics entails…
Focused on business objectives
Customer insights research should always be connected to a clear business goal or question. Consider a situation in which you want to learn more about a specific target audience or customers’ experience with your service or product. The objective for doing this research could be boosting brand perception, generating product improvement ideas or driving sales through a new campaign that reflects the real-life value your customers receive.
Here are some common examples of business questions brands are answering with customer insights:
- Why didn’t our last marketing campaign resonate with Gen Z?
- How can we increase our customer lifetime value this holiday season?
- What factors contribute to positive and negative customer service interactions?
- How are consumers responding to our recent rebranding campaign?
- Why have our sales decreased with Millennials?
- How can we ensure the success of our new market expansion?
Followed up by actions
Insights are only useful when they are followed up with a clear action plan.
If your consumer insights research reveals your customers are unhappy with the type of language customer service representatives are using, the natural course of action might be restructuring and training your CX team. Similarly, if you find out that your packaging isn’t sustainable enough or customers don’t like the new formulation of your product, it’s time to pass that information on to your product development team so they can take the necessary action.
As the word “customer” in customer insights implies, a good insight should always have the customer at heart and serve to increase their satisfaction and loyalty. Increased customer satisfaction is a good way to boost your company’s revenue, success and growth. As we know – happy customers pay the bills!
Naturally, you should always ensure the validity of your customer insights. In order to be authoritative, customer insights need to be rooted in a sound methodology and based on a representative sample of data.
The authoritativeness of insights is directly related to building stakeholder confidence and spurring them to take action. A sound methodology and good data will create high confidence and hence a high willingness to take action, while bad data and an unreliable methodology will do the opposite.
Keep in mind that authoritativeness doesn’t necessarily equal a large data pool. In some instances, you might just want to focus on one specific target audience, such as Gen Z or Gen X. In this case your data set might be comparatively small but all the more meaningful. In other words: if your objective is to understand all customers, you want your data to be representative of all customers. If you’re interested in a particular customer segment, on the other hand, you simply want to make sure to have a good data sample from the segment you’re researching.
Leaves you surprised
We all know it: the best customer insights tend to be the ones you didn’t expect to find. These types of insights provide you with a fresh perspective or open your eyes to something that was previously unknown.
What your customers love most about your product might be what you least expected or were planning to change. Maybe the only aspect negatively impacting customer loyalty is the way you respond to customer service requests – without customer insights, you may never know.
Effectively communicating your customer insights
Now that you know the four features of a good customer insight, there is one more essential consideration to keep in mind: no matter how good your customer insight is, it won’t help the business unless you’re able to successfully communicate the ‘so what’ of it all to your stakeholders.
So how do you write consumer insights and effectively communicate them to your stakeholders? By creating a narrative that compels them to take action. Such a narrative needs to articulate what the data is telling you, why it matters, who in your organization it will affect, and possible actions the business could take based on these insights. Only then will you be able to inspire stakeholders, stimulate meaningful insight-driven change and be able to demonstrate the ROI of your customer insight work.
Want to put your newly acquired expert knowledge to the test and find out more about developing an effective customer insights strategy? Take a look at our comprehensive customer insights framework or book a no-commitment discovery call!