Consumer Insights: Why Are They Important in Marketing

2021-04-25 by Ronn Torossian
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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 5WPR, one of America’s leading PR firms.

Ronn Torossian: Insights from a Native New Yorker and CEO of 5WPR

Ronn Torossian is the founder and CEO of 5W Public Relations, one of the largest independently-owned PR firms in the United States. With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected Public Relations professionals. Since founding 5WPR in 2003, he has led the company's growth, overseeing more than 200 professionals in the company's headquarters in midtown Manhattan. With clients spanning corporate, technology, consumer and crisis, in addition to digital marketing and public affairs capabilities, 5WPR is regularly recognized as an industry leader and has been named "PR Agency of the Year" by the American Business Awards on multiple occasions. Throughout his career, Torossian has worked with some of the world's most visible companies, brands and organizations. His strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards 2020 Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, Metropolitan Magazine's Most Influential New Yorker, a 2020 Top Crisis Communications Professional by Business Insider, and a recipient of Crain’s New York 2021 Most Notable in Marketing & PR. Torossian is known as one of the country's foremost experts on crisis communications, and is called on to counsel blue chip companies, top business executives and entrepreneurs both in the United States and worldwide. Torossian has lectured on crisis PR at Harvard Business School, appears regularly on CNN & CNBC, is a contributing columnist for Forbes and the New York Observer, and has authored two editions of his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations," which is an industry best-seller. A NYC native, Torossian lives in Manhattan with his children. He is a member of Young Presidents Organization (YPO), and active in numerous charities