“You never really understand a person until you consider things from his point of view”, said Harper Lee, the Pulitzer-winning author of To Kill a Mockingbird.For businesses to deliver a good customer experience, they need to understand the customers, and for that, as Harper Lee tells us, they need to consider things from the customers’ point of view. It is this consideration, this listening to the customers, that forms the fundamental part of an effective customer insight strategy.
What are customer insights?
Customer insights are data-driven and observational interpretations of people’s behavior that are used by businesses to understand how their customers (existing as well as potential) think, react, feel, and interact with the brand.
These interpretations or insights are then used while taking business decisions regarding brand positioning, audience or market targeting, product pricing, etc.
Why do you need a customer insight strategy?
Businesses often look at metrics like customer satisfaction (CSAT) scores and net promoter score (NPS) surveys to gauge how the customers feel about their brand. If these metrics are satisfactory, you may wonder why you need a customer insight strategy when you are already doing good as far as customer satisfaction is concerned.
But, effective customer insight strategies go well beyond simplistic quantitative markers in providing you with a complete view of your customers.
By leveraging the relevant customer insights you can enable the different teams at your organization to make customer-focused decisions and these decisions then funnel up over time to positively affect important metrics like customer retention and net customer value.
Following are some of the things that you can hope to achieve with a well-designed customer insights program.
Better product development and updation
By understanding your customers you can also understand what new products they need from your brand and what would they like to be improved in the existing products.
Constantly integrating the results of customer insights & analytics into your product development process will also help you stay informed about the new features that you should be bringing to your products to stay ahead of the competition.
Addressing customer concerns more effectively
It becomes a matter of course in many organizations to look past the customer support team personnel bringing up customer concerns from their day-to-day tickets.
But when customer insights help you figure out the underlying patterns of infrequent customer concerns, you can spot systemic problems and move towards solving them.
With the customer insight strategy putting relevant data at the fingertips of all team members, customer experience can be tailored to address the majority of common customer concerns.
At times, with techniques like beta releases, customer insights may also help you predict how specific changes in your products or services may be perceived by your target audience before you actually implement these changes.
Increasing the efficiency of marketing efforts
As a brand, it may often be more profitable for you to target the customers who are already looking for the kind of product that you offer, instead of spending resources in convincing people from scratch to do business with you.
For example, if you are a leather shoe manufacturer then instead of showing your Facebook Ad to 1000 random people you may achieve better ROI by showing it to the 100 people who have searched Google for formal and leather shoes in the last week.
A good example of the strategy is this case study about how Epsilon leveraged customer insights to help a pharmacy retail chain that was losing market share in the allergy category.
Epsilon’s advanced technology provided new customer insights, enabling personalized messages at the right consideration time, and drove new category sales from existing customers.
Customer insight strategies can help you target potential and existing customers more precisely by helping you understand what they want from you, and when. It can also be of great assistance in a better segmentation of your customer base.
Armed with research-based insights, you can maximize the output of your marketing efforts and deliver relevant communication to customers at the right time.
Now, let’s look at the essential steps you need to take for developing a customer insight strategy.
Ask yourself the 5 five fundamental questions
When you start developing a customer insight strategy, it is best to get clarity regarding these important questions at the beginning itself:
- What business goals are the most important to you and how are these goals related to your customer insights?
- What is the timeline for meeting the goals in which customer insights are going to be utilized?
- What are the constraints you will have to work with? These can be budgetary constraints or related to the technical know-how of the available human resource.
- What are the customer segments that you want to learn more about with the insights strategy?
- What are the main data sources that you will be analyzing to derive the insights?
Map out the customer journey
The process of visually depicting the various touchpoints at which a customer interacts with your brand is known as customer journey mapping.
By mapping the entire journey, right from making the first impression on a customer to the final conversion and churn rates, it is possible to make predictions about other customers in the same segment.
The easy-to-understand visual representation ensures that different teams like customer experience and customer support are able to get a clear view of the customer journey, which improves the quality of collaboration between them.
The question of how to act on insight is just as important, after all, as the question of how to gather customer insight.
Refine your data sources
The quality of your customer insights will depend a great deal upon the quality of the data you are analyzing to arrive at these insights.
Unreliable, inaccurate data will produce insights that do not reflect the real behavior of your customers and that may have an adverse effect on your business goals. Also, you will need to make sure that you are all the relevant data sources, like the customer feedback platform, are given due importance in the customer insight strategy.
Keep iterating and improving
Developing a customer insight strategy is an ever-evolving process and you will need to regularly improve it after each iteration, based on the performance metrics you use to gauge its effectiveness.
In order to remain impactful, the strategy will also need regular changes to fit the changing customer journey maps. You will need to take constant feedback from the team members who are involved in implementing the strategy and the ones who are in charge of acting on the customer insights.
This will help you make sure that there are no organizational silos regarding the strategy, and its execution will be seamless.
By integrating all these customer insight techniques in your strategy, and by collaborating with customer insight leaders like Epsilon, you will definitely be able to optimize your business operations while providing a great customer experience.