Customer insights: The essential guide
Do you want to get inside the minds of your customers? Understand their likes and dislikes? Needs and wants? Preferences and behavioral patterns? Customer insights research can help you do all of these things and more. In this complete guide to customer insights, we break down everything you need to know about customer insights analysis and why it is more important than ever for businesses.
What is customer insight and why is it important?
Customer insights help a business or a brand understand what customers want, think, feel, like, and dislike – and identify how attitudes differ across customer segments or periods of time.
Customer insight refers to the process of generating actionable intelligence from your customer data. This generally involves analyzing some combination of customer feedback and behavioral customer data to understand consumers’ attitudes towards a range of relevant topics including product quality, customer service, brand perception, experience and more.
What are the benefits of customer insights and analytics?
A business’s success is dependent on minimizing the disparity between a customer’s actual experience and desired experience. The smaller the gap, the more satisfied your customers will be. Good consumer insights can enable your brand to adapt strategies to effectively meet the standards of your audience. Among other things, customer insights allow you to:
- Understand the drivers of customer satisfaction
- Reveal (and act on) the strengths and weaknesses of your brand, product or service
- Decrease customer churn
- Amplify what people like about your product or service in marketing communications
- Make strategic decisions that put the customer first
- Personalize communications to different segments of your audience
- Eliminate trial and error processes and create effective strategies based on your consumer insight research
- Boost customer lifetime value
The different types of customer insights
Whenever you leverage customer data and feedback to shape business strategies, you’re using customer insights, so in theory, there is no limit when it comes to different types of consumer insights.
Practically speaking, however, these insights fall into one of six categories. So what are the types of customer insight?
1) Consumer insights In CX:
By analyzing customer feedback from surveys and online reviews (often attached to an NPS, CSAT or CES score), you can pinpoint patterns and trends relating to customer satisfaction or dissatisfaction. This will allow you to reveal the drivers of positive and negative experiences with your brand.
2) Customer service insights:
Customer service data can be generated through any type of customer service interaction, such as chat or call center transcripts. Customer service teams can use this data to understand what contributes to a successful customer service interaction. Discovering which particular language use or offered solutions are more likely to result in satisfied customers can inform training and best practice development across customer service teams.
3) Demographic insights:
This type of consumer insight helps you investigate the nuance within and between different target audiences based on aspects such as age, gender, location, occupation, or relationship status.
By segmenting your customer data and analyzing what makes each customer segment unique compared to the others, you’ll be able to take a more informed and nuanced approach to marketing, product development and other areas of your business to best meet customers’ differentiated needs.
4) Product insights:
By analyzing opinions about specific product offerings, you can find out what people like, dislike, want more of or want less of. Knowing what your customers truly look for and care about when purchasing a product can inform your product development roadmap and help you identify which product attributes to focus on in marketing and sales communications.
5) Behavioral insights:
Understanding how and when customers make purchases and how factors like spend, retention, churn, and average basket size differ across different segments can help you better understand consumers’ needs and wants. By understanding these needs and wants you can uncover motivators or specific points in the customer journey that result in a sale and hence inform your sales and marketing strategies.
6) Brand perception/competitor comparison:
With this type of insight, you can find out what customers think about your brand and/or your competitors. This will allow you to align and tailor brand communications and product offerings with the reality of how consumers perceive you.
To add an additional layer of insight, you might also want to compare your own brand perception against one or more competitors, to reveal respective strengths, weaknesses and points of differentiation in the eyes of customers.
The best data sources for generating customer insights
Surveys
Surveys are an efficient and targeted form of gathering customer feedback data to generate customer insights. As surveys are typically completed digitally without speaking to a human, it’s crucial that questions are crafted intentionally to generate insightful responses that will answer your business questions.
Online surveys are usually conducted using digital survey providers like Qualtrics, Survey Monkey or Google Forms. Respondents are often email subscribers, recent customer service clients, website visitors, or social media followers.
By asking questions relating to specific areas of interest, surveys can be structured in a way that streamlines the analysis process. It’s also easy to record respondent demographics like age, location, race, and more. These data points allow you to analyze and target consumer demographics and understand how they differ from one another.
Online reviews
Similar to survey data, online review platforms like TrustPilot, Amazon and Google Reviews provide detailed, qualitative feedback that is typically attached to a rating or score. Globally, 52% of consumers aged 25-34 post reviews online, and 36% use reviews for brand and product research. Despite their pervasiveness, reviews remain one of the most under-analyzed sources of customer insights.
Online reviews are often unprompted, which leaves you with little control over what respondents say. This can be damaging if prospective customers see consistent negative reviews, but it also helps to ensure the objectivity of the feedback you are generating. In other words, a large portion of consumers rely on information you have no influence over.
Nonetheless, this form of customer insights data is great for discovering what issues or trends need further investigation and highlighting the areas where you are already doing a great job. By analyzing review data, you can uncover persistent red flags that discourage potential customers from buying your product or service. On the other hand, you will also be able to discover what customers love about your products or services, and hence what you should amplify in your marketing campaigns.
Social media conversations
Social media is a goldmine for customer insights. 4.62 billion people (58.4% of the world’s population) use some form of social media. This gigantic mass of organic conversation is at your fingertips, just waiting to be analyzed.
Customers not only use social media platforms, like Twitter, Facebook, and Instagram to communicate issues directly to brands, they also discuss general brand perception within their own network. Consumers are less likely to use social media to formally review a product or experience, but the organic nature of social conversations can lead to an authentic understanding of brand perception.
Not only can brands observe and track conversations taking place on social media, they can also be a part of them. In addition to being a rich source of customer insights, social media is a great way for brands to communicate with customers in real-time and direct the flow of conversations.
Online forums
Forums are a facet of social media that typically results in inquiry-prompted conversation and long-form discussions. These detailed conversations provide a rich source of data for qualitative analysis. In-depth, lengthy responses offer more words for analysis and often uncover a deeper understanding of why and how people feel about your brand than a character-limited tweet.
Forums typically consist of posts from people especially knowledgeable or highly opinionated on a specific topic. It’s important to consider the type of consumer each feedback platform caters to and how that may skew or impact your analysis.
Customer service transcripts
Chat, telephone, and email interactions can be used to gauge persistent issues with products or customer experience, in addition to pinpointing potential areas for improvement. Customers come directly to your brand with these types of concerns, meaning they are likely important and require action or resolution.
Post-chat surveys can also be used to evaluate customer service representatives and more extensive CX processes. By tracking which customer service interactions result in satisfied customers, brands can adapt training programs and best practices to drive more successful outcomes.
Consumer insights examples and use cases
Consumer insights in CX
A Qualtrics report found that 94% of consumers were likely to buy from a brand with a satisfying customer experience. Customer service representatives play a big part in driving customer satisfaction and elevating brand perception. Customer feedback analysis can be used to uncover customer service inadequacies that impact the likelihood of recommending the brand to a friend or leaving a good review. Understanding customer experience to identify and resolve common issues is among the best ways to improve CX practices.
Competitor and brand insights
A popular way to generate marketing and brand insights is through competitor benchmarking. Competitor benchmarking helps businesses examine their brand in comparison to direct competitors or to the wider industry, which helps them discover strengths and weaknesses through the eyes of customers and rise above the competition.
There are a variety of ways brands and marketing teams tend to use customer insights. Examples include:
- Testing new products, campaigns, policies, etc.
- Learning why a product or campaign is underperforming
- Understanding the strengths of your competition
- Discovering how consumers of different demographics assess your brand
- Tracking customer satisfaction as your brand grows
- Tracking how topics and themes change over time
Effective marketing has to resonate with the respective target audience, which is why customer insights are a crucial input for any successful marketing strategy. Tracking changes in public opinion by comparing conversations before and after a campaign or newsworthy event, for example, will allow you to pinpoint changes in consumer behavior and anticipate future trends. Having this in-depth understanding of your customer base helps you create marketing campaigns that resonate with your audiences.
Consumer insights in product development
Consumer feedback has the power to shape product improvement and innovation. Consumers know your product better than anyone else. By analyzing feedback to uncover common issues or product-related dissatisfaction, brands can prioritize product strategy and uncover unknown weaknesses.
Customer insight methods: What makes a great consumer insight?
Defining your business questions
When it comes to generating customer insights, it is paramount to start with a business goal in mind. To uncover specific business goals, you need to ask yourself the right questions. Examples of such questions might be: How is our brand perceived in terms of sustainability? How can we expand our customer base to a new geographic market? Why have our sales been decreasing for Gen Z?
Each of the above questions encompasses a business goal, in this case, an increase in sales, an expansion to a new market, or improving customers’ perception of your brand. Customer insights are only valuable if they are linked with a clear business intention.
Finding the right data
The key to great customer insights is high-quality, representative data. Quality data should include a large number of respondents across different consumer demographics to ensure the validity of your consumer insights. Ideal data will provide you with consumer profiles along with comments, allowing you to correlate consumer opinions with demographic profiles and buyer personas.
Quantitative consumer insights vs. qualitative consumer insights
The key to collecting quality feedback data and generating great customer insights is asking your customers the right questions. Quantitative questions with yes/no answers, multiple choice, or a rating scale are easy to analyze and recognize trends. Qualitative questions are open-ended, giving respondents the room to say as much as they want in their own words.
Qualitative questions provide the detail and context that quantitative prompts can’t. But customers are more likely to respond to short and simple surveys, giving quantitative questions an edge. The ideal survey incorporates both open and closed questions, providing a balance between detail and ease.
Example closed questions
- What do you look for when purchasing (select all that apply)?
- Low price
- Sustainable materials
- Good reviews
- Convenience
- Innovative
- Good customer service
- Quality products
- How do you feel about our brand?
- Positive
- Negative
- Neutral
- Please rate your customer experience on a scale of 1-10
- Which brands have you recently made a purchase with?
- Coke
- Pepsi
- Red Bull
- Arizona
- Snapple
- How likely are you to recommend our brand to a friend?
- Unlikely
- Somewhat likely
- Likely
- Very likely
Example open questions
- What do you look for when purchasing [product or service]?
- What characteristics do you associate with our brand?
- How can we improve your customer experience?
- Do you purchase [product] from other companies and why?
- Would you recommend our brand to a friend and why?
Open-ended survey questions can take more time and effort to analyze, but a customer insights analysis tool makes the job easy. Instead of reading through every response and manually coding survey results, natural language processing tools automate the most time-consuming parts of the process to provide simple and accurate customer insights.
Analyzing your data with a customer insights tool
Qualitative customer feedback can be a treasure trove of qualitative data and actionable customer insights – but in the wrong hands or without the right tools, won’t reach its full potential. Large amounts of data are cumbersome, taking too long and too much effort to analyze.
Manual coding leaves your analysis subject to human bias and error. Taking a manual approach, you’re much more likely to allow preconceived hypotheses to shape the way you interpret the data and risk overlooking important insights with the power to transform internal perceptions.
This is where customer insights tools come in. Consumer insights analysis tools use AI and Natural Language Processing to understand text and detect linguistic patterns within the data. Customer insights tools are used by customer insights, business intelligence, market research, marketing, and data analytics teams.
Crafting a narrative
Once you have defined your objectives, collected your data and analyzed it using a customer insights tool, the next step is to create a coherent narrative that articulates what the data is telling you along with the implications for your organization or stakeholders. By identifying the who, what, why, and what’s next in your insights, your analysis can tell a complete story that can then inform your future business strategies.
How to gain customer insights from customer feedback data using the right customer insights platform
Each customer feedback analysis tool employs a different methodology to the analysis process. Typically through frequency analysis, traditional customer insights tools track the frequency of word usage across a textual data set. This shows you what is happening, but not why it is happening because only topical language is considered.
Relative Insight’s approach stands out because our customer insights platform uses comparison to uncover unique differences and similarities in two or more data sets. These comparisons provide contextual understanding, filtering out the noise and focusing your attention on what really matters.
For example, segmenting customer feedback survey responses based on the location of the respondent so you can understand how customer experience differs across key markets.
Relative Insight uncovers the differences between each customer group. This contextual outlook goes deeper to find meaningful, actionable customer intelligence. This identifies differences between brands, target consumer demographics, data sources, longitudinally, and more.
Customers willingly provide brands with the information they need to succeed. It’s time to utilize it. Customer insights tools take vast amounts of feedback and uncover actionable insights with the power to shape customer experience programs.
Want to use customer insights to inform your company’s data-driven business decisions? Join the growing number of data-driven organizations that use text analysis to support customer-centric decision making. Download our introductory guide or book a no-commitment discovery call to learn more and unleash the power of your customer insights!
