What are consumer insights?
Consumer insights, or customer insights, interpret trends in consumer behavior. It gives a further look into the customer journey, from what consumers are buying to why they’re making buying decisions and how they’re feeling about a brand or product. This information helps companies provide more effective products or services for consumers and increase sales.
Consumer insights help brands move into a consumer-centric way of thinking by looking beyond what products and services consumers are interested in and looking into why they’re interested in them. Business owners can use these real-time insights to understand how customers think and answer important questions like:
How should you position your products or services to customers?
What is the demand for each of your products or services?
How is your audience perceiving your brand?
How do you open up new opportunities for new audiences?
Where are there opportunities for new products or services?
Where are there opportunities for product or service add-ons or upgrades?
Where are your opportunities to increase sales or conversions?
How should you position yourself against competitors?
Consumer insights can be collected from several resources, including:
Customer service data
Social media channels
Focus groups or panels
Consumer test studies
Any channel through which consumers can offer feedback to a business or brand qualifies as consumer insight, which can be collected formally (e.g., customer surveys or focus groups) or informally (e.g., social media or online reviews).
Benefits of customer insights
Using customer insights to make actionable business decisions helps you better understand your customers’ needs and develop 1:1 relationships with your customers. This is vital for company success. These insights also give you an idea of how customers perceive your brand, products, or services, providing several benefits, including:
Optimized customer lifetime value
Listening to the voice of your customers builds customer loyalty, making them more likely to make repeat purchases with your brand. Higher customer lifetime values result in more revenue for your company.
Personalized customer experience
Customers demand personalized interactions and experiences in today's digital world. Customer insights give you a more granular understanding of how to better serve your customers on a 1:1 basis, opening up opportunities for a more personalized, uninterrupted customer experience.
More accurate inventory forecasts
Customer insights, specifically sales data, helps you determine what products are in high demand. This information enables you to forecast inventory needs to ensure you have an accurate, real-time supply chain strategy that avoids waste.
Customer insights such as browsing and buying history, social media conversations, and online reviews help you target specific ads and promotions to consumers based on their experience with your brand. For example, a repeat buyer is likely to see a different promotion than a one-time buyer who had a bad experience with your brand.
Determine ideal prices
Creating a pricing strategy for your products or services can be challenging and requires an understanding of how much your customer is willing to pay for them in your market. Consumer insights help you determine how customers value your brand, products, or services against the market competition and enable you to create or adjust your pricing strategy to reflect this sentiment.
Enter new markets
Sales data and customer data may help you discover opportunities to enter new markets. You may learn about a new audience of interested consumers you didn’t appeal to before. You may also learn that some of your current markets are not resulting in high enough ROIs, and it’s time to pivot your strategy.
Discover common pain points
Conducting consumer research can help you discover issues consumers face in the customer journey that you may not be aware of from your existing CX data, including poor customer service at a specific location, product or manufacturing issues, or unauthorized brand usage. This information allows you to take action to improve the customer experience.
Predict customer churn
Understanding why existing customers turn to competitors helps you execute improvements, boost retention, and exceed customer expectations. Higher customer retention leads to higher profits.
Understand consumer behavior
Consumer behavior tells you what consumers need and why they make certain purchase decisions. This information gives you an idea of whether you have enough brand awareness in your market to improve your chances of reaching your target audience.
Market research vs. consumer insights
Often, the terms ‘market research’ and ‘consumer insights’ are used interchangeably. They both provide valuable data that help you make better business decisions, but often overlap in terms of assisting your brand, as both methods provide important actionable insights. By defining the difference between market research and consumer insights, you can determine when to use each and how to maximize the results of both.
Market research is the process of gathering data about the entire market or industry. A mix of qualitative and quantitative data like focus groups, phone interviews, surveys, etc., are used to collect valuable information about how your audience is perceiving the industry and your brand. This data is used to identify gaps in your customer experience strategies. It provides information about market trends that affect every business in the industry, which is vital for determining current and future consumer needs. Data from market research is usually collected by asking direct and specific questions. This data often includes:
Size of the market
Demand for products or services in an area
Demographics such as income level, age, and education
Gaps in the market
Consumer insights research involves analyzing data gathered during market research to make relevant and actionable business decisions. Market research collects data about the entire market, while consumer insights research uses that data to help you predict how consumers will react to your brand. Unnecessary costs can be prevented when businesses understand customers because resources can be used to target those who are interested in your brand rather than a broad group of people. A deeper understanding of consumers allows businesses to better meet their needs and gain a competitive advantage.
Market research and consumer insights work together to give you a better understanding of where you currently stand in the market and what you can do to improve your position. Research decreases the guesswork involved in making business decisions.
Learn more: 5 questions to answer about customer insights
Consumer insights in marketing
Consumer insights help evaluate the competition. The way people talk about your industry's products and services can reveal a lot about your customers' needs and how you can enhance your product, service, or brand. Knowing what consumers say about other products, regardless of whether they've heard of or mentioned your business, can be extremely useful.
Consumer insights influence every part of the digital marketing process, the messaging in the content, the type of content created, and where the content is delivered. These insights help you understand what will resonate with consumers and how to speak to them.
Because the digital world is constantly changing, a deeper understanding of your customers is essential for all marketing efforts. Without knowing what customers expect, it’s easy to get caught up in a new trend or focus too much on what competitors are doing rather than what your customers want to see.
With all of the platforms that exist today, it’s difficult to know where your brand should exist digitally. Is a website enough, or are you missing out on potential customers if you’re not on social media? If you join a social media platform, which one is best? Customer insights help you understand which channels your target audience is on. As technology evolves, consumer habits are rapidly changing, and these insights can help you adjust accordingly to keep your brand relevant.
Marketing campaigns and strategies
Even though raw data is valuable, it’s difficult to know how to use it without consumer insights. Real-time insights into customer behavior help businesses put their data into perspective and use it in tangible ways. If used effectively, they can help you improve your marketing strategies to be more engaging for both new and existing customers.
You can better map out your customer journey with consumer insights. You’ll be able to identify any gaps in your customer experience and what strategies can be used to fill them. Suppose you’re not providing any kind of post-purchase care, for example. In that case, you may consider launching a social media campaign that encourages customers to post photos of their products and provide feedback. This increases customer engagement, leading to higher retention.
Knowing why your customers are making certain purchases, where and when they spend their money, which external factors affect their spending habits, etc., gives you a better understanding of your customers. This information can be used to create personalized messaging and targeted marketing strategies, saving companies money because their marketing campaigns are no longer wasted on consumers who aren’t interested or have no need for their products or services. The more research you have, the better your campaigns and strategies will be.
Segmentation is the process of dividing a broad target market into smaller, distinctive groups based on shared traits that set them apart from others. These shared characteristics could include behaviors, needs, or basic demographic or geographic data. Customer insights give you a look into these shared characteristics and how to divide consumers into segmented groups. Focusing on the right segmented groups allows you to target consumers who are most likely to buy your products.
A big challenge in marketing is narrowing down your target audience. Because of this, marketing teams often create several specific buying personas. Having multiple buying personas makes it easier to analyze consumer buying patterns and decide which ones you want to target. Every consumer has their own specific needs, so creating multiple personas that encompass these needs is important. A successful marketing campaign requires that your brand understands how each persona progresses through the buyer's journey.
How to get started with customer insights
While collecting customer insights can be difficult, businesses should regularly conduct research to stay on top of market trends and keep up with customer needs. Before you begin researching, consider a few things to ensure you get the most out of your research:
Determine what you want to learn
Before starting your research, the most important thing you can do is determine what you hope to learn. Maybe you want to understand why sales are down or what competitors are doing that customers prefer. Identify business goals based on what you want to know.
Where will you get your data, and how will you collect it? Who will analyze it? Ensure you have plenty of employees and time to collect and utilize consumer insights.
Keep data safe and secure
Data doesn’t just need to be managed. It’s also important to ensure that it’s secure and available to those who need access to it.
Identify strategies and processes for using your data
Plan and think ahead about how your data will be used. Who will be affected by the data collection and analyzing process? Which departments will be interacting with the data? What processes and strategies will be affected?
How to use consumer insights
After developing customer insights, it’s time to put them into action. To attract more leads and build customer retention, update your strategy with the consumer in mind. These three examples illustrate how you can make the most of your insights to guide your marketing efforts:
Adjust your strategy
When you get new information about your consumers, it’s important to use that information instead of letting it go stale. After developing the insights, create buyer personas based on your new information and determine whether or not these personas work with your marketing. If so, are there ways you can better cater to their needs? If not, what changes need to be made? Does the product or service need to be changed, or is there something about the brand that can be adjusted? Keeping up with consumer insights can help you regularly improve your business instead of attempting to catch up later.
Create personalized marketing campaigns
Consumer insights can provide you with more information about your audience than market research can, making them powerful tools for increasing personalization. Once your buyer personas are created, you can segment your customer base based on differences in why they buy certain products. Once they’ve been segmented, personalized campaigns can be designed to appeal to the groups who will get the most use out of your products or services.
Consumer insights can be used for competitive analysis. Understanding your consumers’ mindsets and anticipating their reactions will enable you to gauge what they think about your competitors and how you stand in comparison. You can get an idea of which companies are falling short and what products or services consumers need that companies in the industry aren’t providing. This helps you determine how to improve your products or services or what new ones you could consider adding.
Capture, analyze, and act on customer insights in real-time, all in one unified customer experience management (Unified-CXM) platform
Sprinklr Modern Research enables leading brands to become customer-centric by turning customer data into actionable insights and new business opportunities at scale.
By tapping into real conversations from billions of consumers on 30+ social, digital, and messaging channels — and leveraging AI to enrich that data and surface actionable insights — brands can engage with their audience more effectively than ever by:
Identifying and capitalizing on critical demographic and behavioral insights — such as preferences in media, sports, products, and other interests — to get a better understanding of audience insights and what they care about
Developing a better understanding of customer insights around products, services, and even specific store locations — plus key insights on competitors’ offerings and strategies — to identify critical market trends and capitalize on unmet customer needs
Transforming real-time voice of the customer data into actionable insights — then sharing it in all formats and on all devices across your entire organization to fuel collaboration and innovation
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