The Emergence of ‘Customer Insights’

Traditionally, marketers have used tools such as surveys, interviews, and focus groups to undertake marketing research. While these tools are still very important, they have some inherent limitations. For a start, to get good quality data from these tools a key assumption is that respondents will accurately respond to research questions. In many cases, these respondents are expected to recall a previous experience and report on it. In other situations, customers are presented with scenarios and asked to predict the likelihood of them undertaking a certain behaviour (e.g., purchase). Therefore, the key to good quality data depends on respondents’ engagement with, ability, and willingness to provide all necessary information.

Another limitation of the traditional marketing research methods is the bias that can creep in as per the wording or presentation of a question. It is well-known that responses to a question can vary depending on who is asking the question, how it is being asked, and perhaps, even the time when it is asked. Moreover, survey questions are pre-determined and offer little flexibility to bring in new ideas. Respondents are usually restricted in the way they can respond. Similarly, generating good data in an interview usually requires a good rapport between the interviewer and the participant. Not all researchers are skillful in this area.

Finally, marketing research methods are not inexpensive. It takes time, money, and expertise to design a survey, an interview, or a focus group. Many small and medium-sized enterprises are usually not able to employ the traditional tools effectively to gather information.

The current world is making use of digital technologies. With the use of smart wallets, smartphones, smart appliances, streaming services, and social media platforms instantaneous information is being generated. This creates an ever-growing repository of ‘Big Data’ which – logically speaking – should be mined to gain insights into consumer behaviour. While the traditional marketing research methods are still useful, these need to be supplemented by other forms of data which is being created and stored on a regular basis.

Many organizations have developed ‘Insights Teams’ which consist of staff members from a variety of backgrounds. As opposed to a market research department, the task with the Insights Team is to be able to ‘synthesise’ the massive amounts of data being generated. Team members play the role of aggregators, interpreters, and disseminators. It is not sufficient to only present ‘findings’ to survey questions. As an Insights specialist, the key role is to be able to aggregate different pieces of information, interpret the data by collaborating with colleagues from other departments and be able to suggest key action points for future growth.

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Table: What is the difference between Marketing Research and Customer Insights^[1]?

Use of Existing Data to Gain Insights:

The concept behind ‘customer insights’ is not to gather information through traditional sources of data collection, but to mine the existing sources which generate data continuously. Some of these sources which may provide useful insights are discussed below:

Internal Sales Data

Organisations have a wealth of internal data being collected in various forms. Every time a transaction is made there is a record generated.  Analysis of such sales data, revenue per customer, time, and place of sale may generate useful information for making decisions.

Customer Queries and Complaints

Every time a customer reaches out to make a query (or a complaint), a piece of data is being created. Many companies have learned that by analysing customers’ queries and complaints a wealth of information can be mined. This includes analysing customers’ chat transcripts or emails or voice mails.

Website Analytics

In today’s online world, customer interest in a company’s offering can be judged by web traffic and interactions. Tapping into relevant metrics may help to explain various aspects of visitors’ online behaviours (e.g., time spent on the website) as well as their interest

Previous Marketing Research Data

While some managers may toss away old research as ‘obsolete’, it is quite possible that some of the findings could prove to be useful. Qualitative data may hold some interesting insights and quantitative data could be ‘sliced and diced’ in a number of ways.

Social Media Analytics

It is expected that there will be over 4 billion social media users by the year 2025. This is more than half of the world’s population of 7.9 billion (2021). Ignoring social media is not affordable. While many organisations aim to have some presence on social media, small companies with a limited budget are still recommended to monitor – at the very least – conversations taking place on various social media platforms. Online communities, though different from Facebook and Instagram are also known to have discussions that could be vital for managers to follow.

Wearable Technologies and Smart Devices

Fitbit helps to generate wellbeing-related data while apps and smartphones can store a wealth of information. Integrating such data with other pieces of information collected is known to be helpful to marketers.

Third Party Sources of Information

Some information is shared by stakeholders across the network, while other types of information may also be available for sale. Getting consumer data, for instance from a credit card company may assist a manager in gaining a useful understanding of customers’ purchases.

Employees

A company’s own employees are generally the first point of face-to-face contact with a customer. Employees can provide firsthand information about the customer. There could be a wealth of information already present within a company that could be explored to better understand the customer.

Source: Networx Brisbane ^[2]