A business is nothing without its customers, so your aim should always be to provide for them in the best way you can. By offering products and services they need and delivering a customer experience they enjoy, you will start to attract more target customers and be able to do the same—rinse and repeat.
But in order to do these things and to excel in business at large, you need to gain a deeper understanding of your customers with data-rich customer insights.
The ability to generate and capitalise on deep customer insights is fast becoming the difference between success and failure in modern business. Those who invest in understanding their customers and finding more of the same are far better placed to grow than those who work off a mix of traditional business development strategies and gut feel.
In this guide, we take a deep dive into this world to answer the question “What is customer insight in marketing?”, discover why customer insights are so important, look at how to collect customer insights and consider how to use this newfound knowledge to get ahead.
What are customer insights?
A customer insight is a piece of information that gives you a deeper understanding of the customers you sell to. Customer insights are the end product of a process that includes collecting information, analysing and interpreting that information and drawing meaningful conclusions from it.
Customer insights help a business gain a deeper understanding of its audience: who they are, what they want, how they think, feel and do. By analysing your customers and their behaviours, you can understand how to appeal to them more effectively.
Your customers have always been goldmines of information. Between CRM data, web traffic data from Google Analytics, social media audience data and more, a modern business has access to more than enough information. But it’s only recently that businesses have had the technology to collect and analyse this information.
The challenge is in managing, processing and drawing insights from the endless pages, columns and rows of data. With the rise of AI and machine learning, which can find patterns in sprawling datasets with little to no oversight, technology has never been better at generating valuable insights.
Why are customer insights important?
Such is the sheer quantity of data at a modern business’s disposal, that the answer to almost every question you care to ask can be found within it – you just need to draw those insights out.
Investing in the generation of customer insights can lead to a wealth of positive outcomes for your business, including (but not limited to):
- Targeting customers more effectively: Collecting and analysing the demographic and behavioural information of your current customers can help you understand exactly who to target with your marketing and how to most effectively sell to them.
- Identifying and entering new markets: When analysing the demographic and behavioural information of your customers you might be surprised at who is buying what you sell – you could open the door to a whole new set of customers or geographic market.
- Improving the customer experience: By collecting customer data as they make their way through the awareness, consideration and transaction stages of the buyer journey, you can understand where customers tend to drop off and work to improve those parts of the process.
- Encouraging customer loyalty: A deeper understanding of your customers and their needs, wants and journey can help you craft loyalty programs and strategies that encourage people to keep coming back for more.
- Enhancing your product/service offerings: Feedback from customers is the most critical factor in developing better products/services and more enticing deals. By analysing data to understand what your customers want, or better yet, by asking for direct feedback, you can create far more alluring offerings.
- Forecasting demand: Analysing product and consumer trends helps you to forecast the future demand for products and adjust inventory accordingly. If you notice falling demand for a product, it may be time for it to be retired and replaced with something better.
Put all these benefits together and it’s clear that generating accurate customer insights consistently and the successful utilisation of said insights can drive incredible business growth.
Types of customer insight data
Customer insights are built on hard data. The type of data you collect and the insights that this information subsequently generates can be placed into four main categories as explained below:
Behavioural
This type of customer data focuses on how people act when they interact with your brand, products or services. How do they navigate the buyer journey? What triggers move them from the Awareness stage to the Consideration stage, to the Transaction stage? On average how many touchpoints lead to a purchase? What time of the day or week do they buy and on what type of device?
Demographic
Demographic data and insights describe your customers. They focus on quantitative data points like gender, age, location and income and qualitative data points like preferences towards products, buying habits and the buyer journey. Demographic data can be used to create customer personas – avatars that capture a certain type of customer and that can prove incredibly valuable for your marketing efforts.
Psychographic
Psychographic data, sometimes called attitudinal data, is information relating to the attitudes, preferences, opinions and desires of customers. This qualitative data is collected through interviews, focus groups and surveys like Net Promoter Score (NPS), SUS and SUPR-Q. Psychographic data can add much needed context to the behavioural and qualitative demographic data mentioned above.
Feedback
Feedback data can be thought of as the quantitative version of behavioural data. It includes actions captured as a user interacts with your online presence, such as views, impressions, engagements and clicks. Feedback data also includes customer ratings and reviews for your brand and offerings. Google Analytics and social media are your main sources of feedback data.
How to get customer insight data
Now that we’ve gained an idea of what customer insights are and the value that they can bring, it should be obvious that this information is one of a modern business’s most important assets. The question now becomes how to find customer insights.
The first step is to generate the base information that you will analyse and draw insights from. A few of the main sources include:
- Google Analytics: The ultimate source of website and web traffic data, Google Analytics offers critical behavioural, demographic and feedback data and insights.
- Social media analytics: Social media offers a clear view of the demographics of your customers, as well as plenty of feedback data on impressions, engagement and clicks.
- Advertising platforms: Google Ads and social media marketing tools are valuable sources of customer data to drive insights, particularly when A/B testing is conducted.
- eCommerce data: eCommerce platforms like Shopify and Square offer a deep dive into the Transaction stage of the buyer journey, which you can use to enhance the purchase process.
- Your CRM: If you commit to collecting and managing customer data in a CRM, you can generate valuable customer insights entirely in-house.
- Rating and review platforms: An obvious place to look for feedback data, the likes of Google, Facebook, TripAdvisor and Yelp can give you insight into your reputation.
- Psychographic surveys: Net Promoter Score (NPS) is the ultimate way to measure the quality of the customer experience you offer. There are a wealth of other, more niche survey options, such as SUS for system usability and SUPR-Q for user experience.
- Custom surveys and questionnaires: Create your own survey to ask the specific questions you need answers to. Consider using incentives to encourage people to complete your survey.
How to analyse customer data and generate insights
Having collected a wealth of data, you’re now faced with the challenge of analysing it. But how to build customer insights?
The good news is that basic insights can often be drawn from the source of the data: platforms like Google Analytics, Meta Business Suite and Shopify convert their data into graphs, charts and tables to help you draw insights and conclusions from it.
The problem with using these basic analytic tools is that they’re available to every single user. You aren’t going to gain a competitive advantage by generating similar insights to everyone else in your industry. Truly valuable, game-changing insights demand more effort and investment.
This is where business intelligence tools like Tableau, Qlik and Microsoft Power BI come in. These powerful platforms can ingest vast amounts of data and generate deep, transformative insights. Most businesses will need to bring in expert help to properly utilise these tools, but this is an investment that can generate incredible returns over time.
What to build from customer insights
Now that you’ve started to generate some insights, what can you do with them? Here are three of the most valuable customer insight use cases.
Tailored marketing campaigns
Armed with demographic insights, you know exactly who to target. Armed with behavioural and feedback insights, you know how this audience will act. Armed with psychographic insights, you know what this audience likes and doesn’t like.
All of these insights allow you to craft marketing campaigns that resonate deeply with your target audience, that lead them through the buyer journey in the most efficient and effective way possible and that result in more leads, more sales and more return business.
2. Enhanced customer service
By knowing who your customers are, you’ll get a sense of how they like to be serviced. Generally speaking, older customers will appreciate the ability to speak to a human on the phone or in-store, while younger customers will appreciate the instant answers that a website chatbot can deliver.
Feedback data can help you to identify customer service issues and opportunities, while psychographic surveys like your Net Promoter Score help you to track your performance over time.
3. Data-driven decision-making
By generating insights into the type of customers you should target and how those customers act, you can make better decisions faster.
You can identify and capitalise on new demographic and geographic markets. You can predict trends and change your offerings accordingly. You can streamline your buyer journey and push more people down that path.
Common mistakes when utilising customer insights
An investment in customer insights isn’t an automatic home run. There are a number of hurdles and potholes along the road that can harm your efforts. Here are a few of the most common customer insight mistakes that you should avoid.
- Not defining goals, purpose or scope: Without a proper plan, your customer insights efforts are destined to fail.
- Focusing on the wrong data: With so much information available it’s easy to get lost in the noise, which is why a firm strategy is so important.
- A lack of validation: Without double-checking and validating your data, your results may be biased or outright inaccurate.
- Not involving the right people: Ensure all relevant team members and the best outside experts are involved in the effort.
- Failing to share insights: Further to the above, the more people you share your insights with, the more brain power you have to draw upon.
Growth Partners: The customer insight specialists
Customer insights are no longer a nice-to-have for growth-focused businesses – they’re a must-have, holding the keys to the future of business success and should take priority as a strategic initiative at the top of the to-do list for any business seeking to gain a competitive advantage.
At Growth Partners we have built a reputation for helping businesses grow by solving real-world business problems with targeted data analysis, strategic marketing thinking and best-in-class digital implementation.
To achieve the results we are known for and provide a blueprint for success, we’ve developed DigitalArchitect – a proprietary system that uses deep data to highlight online expansion opportunities and determine the strength of your business case for digital marketing investment, laying the foundation for continuous, sustainable growth.
If you’re ready to transform your business with high-quality actionable customer insights, we’re ready to help. Contact us today to kickstart your growth journey.