There are many examples of Consumer Insights, also called Customer Insights (we will use these terms interchangeably throughout the article). They have been described exhaustively. Therefore, let us consider a hypothetical but illustrative situation.
Three men walk into an automotive store. Each of them leaves the store with an identical hubcap. You may think that this is a good hubcap.
You could be convinced that each man bought it for the same reason as the other two.
You can also examine (in a strict sense, as in scientific research) their motivations and follow their needs and problems. You may find out that the truth contradicts these superficial explanations.
A mechanic could have bought a hubcap for their customer's car.
An older man, a pedantic taxi driver, could have bought it because they don't like untidiness and cannot suffer a missing hubcap in their car. A set is a set. The hubcaps must match each other.
It could also be that the third man selected a hubcap that is the most visually attractive. They bought it for their son, who had just fallen in love with cars.
So, what determined these choices? The same appearance of the hubcaps one already has? Price? Aesthetics? Or maybe something else?
Maybe a completely different motivation was behind the choice? But what? Consider this: hubcaps are automotive fetishes, a way to express emotions towards your car, a message to the outside world that even small boys can "sense."
What are Customer Insights?
There is nothing both as self-evident and (in theory) simple, and yet so (in practice) complicated as Consumer Insights.
Consumer Insights are essential and indispensable for most marketing (Insight Marketing), advertising, promotional and image-building activities that improve customer satisfaction and experience.
No advertising campaign, marketing strategy, or competitive strategy can be highly effective if it is not based on accurately discovered Insights and reliable research methodologies.
No brand can be strong, evoking intense emotions and inspiring customer loyalty, without a Customer Insights Strategy backed by a set of accurate, updated, and convincingly communicated Insights.
Today more than ever, gaining market advantage is a skill to perceive customers through the lens of their "human" needs and to research their emotions, problems, and goals.
An empathizing approach allows you to discover and leverage Customer Insights to create more effective Value Propositions and appeal to the customer's awareness and emotions with complex arguments.
Not excluding emotional, rational, and functional arguments, as well as those related to status and social prestige.
Without getting into the heart of the matter, the most significant reason for purchase, something that prompted the customer to act (Consumer Insights) and not just inspired an idea about a purchase, we will not be able to increase the sales by a dozen or so percent.
And that is how sales grow when we discover Consumer Insights that are universal and appealing to the most important (emotionally) reason for purchase.
The most spectacular examples of sales surges (preceded by advertising campaigns utilizing Consumer Insights) are the best proof of that. There are several reliable studies that support this.
Consumer Insights - definition
To begin with, let us say what Consumer Insights are not.
They are not a:
- Result of brainstorming and creative teamwork
- Market-based approach model to be replicated, copied, or imitated (what works for brand X may not necessarily prove successful for brand Y)
- Catchphrase, although Consumer Insights are used in them
- Just a concept, a marketing theory
- Loose association.
The word "insight" means discernment, an ability to understand people, situations, and contexts. Its other meaning is related to conducting observations and noting remarks.
Consumer Insights are a method aimed at determining the reason for a purchase, which can be expressed with a simple sentence. It is a method that allows you to discover motivations, i.e., factors that inspired a customer to purchase and collect customer feedback.
Naturally, discovering Insights is discovering motivations. These are not always conscious. More often, they are unconscious or not considered crucial. Although, in fact, they are.
Consumer Insights prompt to action. They are a behavioral reaction to a proposal, product, service, or brand. Here, it is worth remembering an old principle. It says that what a customer declares, thinks, and does are usually three different things. And they are loosely connected.
Customers' needs and problems and Customer Insights
Most probably, it is not surprising that today we are no longer dealing with typical, mass customers, very similar to one another, therefore constituting similar buyers. Such a situation is a thing of the past, both in marketing and commerce.
The times when sales were raised by simply pondering the "who else is a potential buyer" issue are a distant past. Today, the stress is not so much on "who else is a potential buyer" but "why the target audience would want to buy it." And here again, UX research is indispensable.
A simple answer: "because they need it" no longer suffices. It provides no competitive advantage. The same need of a target audience can be satisfied by many products.
Therefore, building (emotional and functional) customer relationships and searching for Consumer Insights is increasingly urgent. It determines the sales volume.
Discovering more profound, less obvious, but powerfully motivating reasons for purchase is the most effective way to compete.
All the more so because modern customers are increasingly demanding, they expect an individual approach and customized products and services.
They value the companies that can distinguish them and understand their needs and motivations better than the rest.
And that can offer them more than just a product and a solution to a problem. For the customers, a relationship is an added value.
And a way to build a lasting and convincing relationship is Consumer Insights which most accurately addresses the question: "Why is a customer supposed to buy a product offered by us and not by competitors?".
Thus, Consumer Insights can be defined as a set of research (in the strict sense: market research), observations, and analytical and communication activities designed to discover the strongest purchase motivators and apply them in advertising activities.
Which also means understanding the "actual," or better, "more convincing" reasons for purchase. Ones that hit home as regards customers' needs.
Remember that emotions are the strongest, most lasting, and fastest way to build a relationship between a brand, a product, or service and its fan, buyer, user, or group of consumers.
Often, if not always, it is the emotions that are behind our shopping decisions.
Due to various variables (from demographic and psychographic to lifestyle-related), the most convincing reason for each consumer group in a given market can be something completely different.
The objective truth does not have to be important for the customers. And usually, it isn't. Their beliefs are more important. If they think eating a candy bar better relieves the discomfort from being hungry than having lunch, then that is how it is. And it makes no sense to convince them otherwise.
Actually, you are not supposed to because, in practice, discovering Insights is not a creative activity, and it should not create new customer needs. It is a discovery, through various methods and techniques, of the most authentic needs.
Why is it necessary to discover Consumer Insights?
You might think that there is a shortcut. All you need to do is create a purchase need in a given target audience by means of advertising and wait for sales results that will soon appear.
The sooner, the more universal (concerning all) and timeless (not conditioned by changing political and social situations) are the needs you appeal to. However, this is not how you build lasting and emotional relationships and appeal to your customers. Sooner or later, your customers will discover the artificiality or the impermanence of the needs induced on an ad hoc basis.
Moreover, in most products of this type, ad hoc motivation becomes more and more marginal for the customers.
The abundance of products and service providers results in customers looking for more specific and individual reasons close to their experience. Hence, the need to discover such authentic, strong, real motivation, i.e., to discover Customer Insights.
For starters, the reasons to purchase a product can change quickly. And usually, they do. Secondly, one universal reason for purchase does not exist. There are many of them. For some products, there can be several to several hundred reasons.
The set of Insights (causes, reasons for purchase, their justification, beliefs related to them) for each customer segment can significantly differ.
An Insight is the sum, synthesis, and summary of attitudes, expectations, values, needs and views, and specific life determinants crucial for a given customer segment and product.
Therefore, the best method for researching and discovering Insights (conducting Customer Insight Research) is directly listening to ratings, frustration, beliefs, comments, customer feedback, and needs of the representatives of different target group segments.
Characteristics of good Customer Insights
Although they require research and analytical expertise as well as proven methods, the value of the discovered Consumer Insights can be estimated.
The classic grid of good Insight characteristics features four of them (4 R Principle).
Good Insight should be:
- Well-based in reality, it should be factual (Reality)
- Issue-appropriate (Relevance)
- Affecting, response-provoking (Resonates)
- Prompting to act (Reaction).
You can add more to the above characteristics, including the following:
- Validity, importance, and significance, that is, a motivator's strength
- Emotivity - the potential for stimulating emotions constituting the basis for a bond, a relationship with a brand.
- Popularity - the best Insights are neither excessively specific (understandable to a limited audience) nor excessively generic (they lose their uniqueness)
- Straightforwardness - must be automatically understood, almost obvious, acting by the force of their simplicity
- Directness - cannot employ hints, understatements, or metaphors; must be a clearly and precisely expressed "truth" about a problem or a need.
- Credibility - the trust they inspire must be unwavering
- Total acceptability - Insights cannot evoke a reaction of opposition or a defensive response and cannot generate controversy.
The following questions can help you collect Customer Insights:
- Who are your customers?
- How old are they?
- What level of education do they have?
- Where do they live?
- What do they want?
- What do they worry about?
- What problems do they face?
If you make sure to answer these questions exhaustively, you will gain valuable insights that will increase customer satisfaction and discover consumer needs that are crucial for the market success of products and services.
Types of Customer Insights
In marketing theory and practice, two types of Consumer Insights are distinguished:
They are used as the basis for advertisements and all marketing communications. Usually, they are a rating, opinion, belief, stereotype, an emotion expressed verbally, expectation, or more colloquially, "a truth about someone or something."
They form the basis for the development of new products and services which can fill in the market gaps, meet unfulfilled needs, or the needs fulfilled incompletely, in an unsatisfactory manner.
They are also used in brand expansion and product and service adaptation.
Both types of Insights are of great assistance in the development of ad hoc and long-term marketing activities.
Insights can also be divided according to the type of collected data and customer feedback.
- Sales trends
- Socio-demographic data
- Information regarding a customer's personal interest and lifestyle
- Purchase activity
- Competitor data (competitor reviews).
Differences between Consumer Insights and Market Research
It refers to various concepts and tools, such as qualitative and quantitative methods or focus groups. In a general sense, it focuses on studying general markets.
They are research observations that are comparably more challenging to obtain and concentrate on the customer base of a given brand.
Market Research and Consumer Insights differ in the goals that they aim to achieve.
Market Research, among others, aims to:
- Determine market trends
- Find new market opportunities
- Discover new markets
- Identify the target audience (target market) and market sizes.
The objectives of collecting Customer Insights include the following:
- Analyzing customer behavior (purchase habits, engagement)
- Assessing the responses to offers and promotions
- Identifying customer needs
- Discovering pain points.
You can use Consumer Insights and Market Research to develop marketing strategies, marketing campaigns and improve your products that not only will offer a better customer experience but also reduce customer churn (a percentage of customers that stopped using a given service or product).
Methods for verifying and testing Insights
The Insights used in marketing activities and definitively confirmed in terms of their sales usability can be selected in advance.
The selection should be subject to the following criteria:
- The naturalness of tone (language, beliefs, "truths")
- Effectiveness of the response to a problem or a need (WOW effect, Eureka effect)
- Source (the most effective are the Insights provided by the customers themselves)
- Emotional vector (the "truths" based on negative emotions have a stronger impact than the "truths" based on positive emotions).
How to discover the most accurate Consumer Insights?
The above question is not so easy to answer. Although there are proven and effective methods of searching for Consumer Insights, they can also be discovered by chance. But keep in mind that it is incidental.
The discovery is promoted by openness and alertness during the research of:
- Consumer rituals
- Ways to react to problems
- Ways to express needs
In the context of Consumer Insights discovery, ethnographic research is particularly useful, employing observational methods and techniques.
The most commonly used methods are:
- Desk Research
- Participant Observation
- IDI (Individual In-Depth Interview)
- Mystery Shopper
- Projective methods (e.g., TAT - Thematic Apperception Test)
- Focus Groups.
Finding an Insight is the art of combining methods and utilizing experience. It requires discernment and analytical, synthetic, and inductive thinking. Fruitful research is fostered by correct questions.
Regarding, for example, the research of:
- Purchase motivations (their hierarchy)
- Values and anti-values that guide the customers in life and are important for them at the time of purchase
- Requirements (functional and user requirements and emotions evoked by their presence and absence)
- Shopping goals (problems to be solved with them, needs they satisfy)
- Aspirations, dreams, hopes, worries, fears, to what they are particularly sensitive and indifferent
- Problems they face
- Professional and private priorities, priorities in life.
How to start collecting Insights
There are a couple of steps you can take or be inspired by when creating a Customer Insight Strategy. A good Insight Strategy will enable you to better communicate with your company's target audience.
1. Determine what you want to learn.
This step involves gathering questions that you need to answer and problems that you wish to solve. You can use the ones we proposed above or develop your own.
2. Establish how you will gather the necessary resources.
Determine who is going to collect and analyze the data. Define how to collect the necessary information and what sources you will use.
3. Identify your target market and select the method.
Choose what type of customer segment or type of audience you are going to target. Select the appropriate method of collecting data. For example, will you conduct market research, individual in-depth interviews, or focus groups?
4. Analyze the collected Insights.
Understand what the Insights you obtained are trying to tell you and what influences them. Customers sometimes do not know what stands behind their choices. That is why it is important to base your data on various sources so you can see the whole picture.
That said, you should also remember to check the reliability of your data sources.
5. Create a plan.
When you finish collecting and analyzing all the necessary data, devise an action plan that will help you determine how to implement your findings and determine which departments and processes will benefit most from your discoveries.
Tools for Discovering Customer Insights
The best customer insight tools that can help you collect data regarding valuable customer insights and significantly improve the customer experience and customer retention include the following:
- Online reviews
- Customer Insight Surveys
- Customer service data analytics
- Customer Journey Map
- Google analytics
- Google trends
As you can see, collecting Consumer Insights is more than beneficial. Thanks to them, you can design tailored solutions, improve customer interactions, and make informed decisions.
These marketing activities are essential for brand development and will enable your business to outperform your competition.