Today, customers across retail spaces expect high-quality goods and services to be matched with high-quality experiences. However a major challenge remains: how can companies and their target audiences understand each other enough to develop healthy relationships.
The answer is by using consumer insights. Gathering and employing consumer insights is key to understanding a firm’s customers and to helping match high-quality goods with quality experiences.
What Are Consumer Insights?
Consumer insights, also known as customer insights, are the ideas gathered after reviewing and interpreting consumer behaviors, data, and feedback. Marketers can use these ideas and concepts to improve customer support and product development.
With consumer insights, businesses have a 360-degree view of a customer, which helps them understand how key behaviors relate to purchasing decisions. As well, such insights provide businesses with a deeper understanding of consumers’ thinking patterns, which helps business owners make important decisions. Some decisions that businesses can make based on consumer insights include product pricing, audience targeting, gauging perceptions towards new and existing products, and determining how to increase conversion rates for marketing campaigns.
Businesses can collect consumer insights from various sources. These include purchase history, customer service data, product and service reviews, customer sentiments, and market research.
Why Are Consumer Insights Important in Marketing?
Incorporating consumer insights into marketing activities plays a big role in ensuring success. Studies have shown that incorporating consumer insights in marketing campaigns can help tailor product information to meet the consumer’s needs and demands. Most recently, a Microsoft study indicated that brands leveraging insights on customer behavior outperformed their peers by close to85% in sales growth.
At the same time, marketing teams can employ consumer insights to develop effective marketing strategies. By leveraging accurate customer journey maps and customer personas, marketing teams can enhance advertising materials. With effective marketing, customer experiences are further enhanced, which may translate to more revenue. A report by Microsoft showed that moderate increases in the quality of customer experiences canincrease revenues by $775million for brands with a $1 billion annual revenue. The increase in revenue happens over three years.
What’s more, adopting marketing strategies that improve customer experiences can play a role in enhancing client loyalty and help turn clients into product advocates.
What Benefits Do Marketers Draw from Customer Insights?
Marketers can harness several benefits from consumer insights. These benefits include:
#1. Improve Customer Targeting
Ad campaigns can leverage customer insights to reach different target groups within an organization’s markets. With insights into buying history, product returns, repair, and maintenance, marketers can identify how to tailor marketing campaigns to reach the most appropriate audience. Research conducted by MGI and McKinsey showed that efficient marketing initiatives and other levers that leverage data and analytics can increase operating margins by more than 60%.
#2. Ad Targeting
Customer insights provide accurate information on sales performances. With the information gathered from different markets, brands can decide which markets are cost-effective enough to operate campaigns in.
At the same time, customer insights provide information into which marketing strategies a brand can employ to reach an audience most effectively. With such insights marketers can cut costs by employing tailored advertising approaches meant to reach target markets.
#3. Deliver Personalized Marketing
By leveraging consumer insights, marketers can personalize ad campaigns to reach highly specific demographics. For instance, marketers can use personalized emails to reach a target audience, thereby increasing conversion rates.
In fact, a study by E-consultancy found that 93% of the companies in a study experienced a rise in conversion rates after personalizing their search engine marketing campaigns. And more than 92 % of the companies that personalized their marketing emails saw a jump in conversion rates.
Ronn Torossian is CEO of 5W, one of America’s leading PR firms.
