Last Updated on
Forrester, in its report ‘Insights-Driven Businesses Set The Pace For Global Growth‘, (2017) shares that insight-driven companies are on the right track to make $1.8 trillion every year by 2021. In the same report, it’s revealed that organisations which are insight-driven are growing eight times faster than the global GDP. These numbers show the power that marketing and consumer insight can bring to a brand.
What are marketing and consumer insights?
Data is one of the most important tools for driving business growth. As hundreds of tools become available for data collection, brands are easily able to gather information from consumers. However, being data-rich does not automatically translate to being insight-rich.
Marketing and consumer insights are the result of extensive data analysis to extract meaningful facts that a business can action in order to outperform their competitors. The aim is to identify better ways of acquiring, engaging and retaining customers for the long term by understanding how their target consumers think and act. Marketing and customer insights go beyond data and research to provide multiple views and perspectives of customer’s issues, needs and desires.
What is the difference between a marketing and a consumer insight?
Marketing insights are gleaned from a business’s existing marketing efforts from their marketing analytics. This marketing analytics data tells them if campaigns and messages are working or not. Marketing analytics are available across all marketing channels including social media, search advertising, email marketing, digital ads, TV ads, radio advertising and more.
Customer insights are a little different as these help brands to understand their EXISTING customers. Customer insights provide important information on what customers like, how they behave and any issues that they might be having. They also allow brands to fine-tune their marketing operations to accelerate marketing ROI.
Why are insights important for business?
They help to predict customer’s behaviour
Marketing and customer insights allow brands to identify patterns in the customer’s purchase behaviour. Using predictive analytics tools, a brand can even predict a customer’s behaviour months in advance. Some analysis methodologies can also help brands segment customers based on their predicted lifetime value in order to focus heavily on retaining those customers that are predicted to be the highest value.
They help keep customers satisfied
Insights are the best way of gauging if the business’s operations are effectively meeting customer’s expectations and of discovering what their customer’s priorities are. By engaging existing customers in conversations and surveys, customer insights can also help brands to build stronger relationships with their customers.
Insights help with better business decisions
Marketing and customer insights help businesses to make better decisions and allow businesses to more strongly resonate with their target customers. Many brands are under increasing pressured to prove a return of investment. Customer insight can also help here – by ensuring that they have the most effective messages and finely tuned targeting within their marketing campaigns.
Turning data into contextual insight
Brands should start by separating out the marketing vanity metrics from those that truly demonstrate marketing performance. A Facebook follower is not worth much if they don’t buy! In this respect, analytics are only effective when a brand has fully mapped those performance metrics and sets KPIS against them.
For example, what does it mean to have a 5.8% conversion rate? It means that, for every 100 clicks on the ad, about 5 – 6 of those who click are converted into customers. This means that 5.8% of those who clicked found the product, copy or design useful for them. Brands should look into how these conversion rates change from week to week and how they change based on tweaks to the customer journey and landing page. Which changes improve the conversion rates and which do not?
When brands are concrete about these different metrics and how they affect growth, conversions and other key performance indicators, they are well placed to optimise their marketing. Through insights, brands can make intelligent decisions and figure out where to invest their time and budget going forward.
Important KPIs to measure across digital marketing and customer engagement
Key Performance Indicators or KPIs are vital in order to drive accountability in marketing programmes and should ideally be set out across all marketing activities. When the results fall short of the required level, brands are then able to start analysing the cause in order to optimise (or cancel) the marketing activity.
- Monthly number of unconverted leads – Number of leads who entered the sales funnel but did not purchase or subscribe to the service.
- Email conversion rate – Percentage of people who saw something in a brands email campaign, and then completed the desired action.
- Email click-through rate – The percent of users who clicked through on the email versus the total number of recipients. Some email marketing and automation tools that brands can use are, EmailOctupus, OmniSend, and SendXio.
- Funnel drop-off rates – Measures the number of visits/visitors who left a sales/marketing funnel without completing it.
- Sales conversions – Measures the effectiveness of a brand’s sales tactics in terms of converting leads into new customers.
- Average collection period – The average number of days between 1) the dates that credit sales were made, and 2) the dates that the money was received/collected from the customers.
- On-time delivery – Measure of process and supply chain efficiency. This measures the number of finished goods or services delivered to customers on time and in full.
- Average customer lifetime value – The total revenue amount that a customer brings to a business over the entire period of the relationship.
- Customer churn rate – The number of lost customers divided by the number of customers at the start of the period. This is typically expressed as a percentage (%) of all customers and on a monthly or annual basis.
- Average customer retention period – The percentage of customers the company has retained over a given period. It is the opposite side of the churn rate.
- Customer Acquisition Cost (CAC)– The cost associated with convincing a customer to buy a product/service.
- Share of wallet – The percentage share that a brand has of the customer’s total spend in their product or service category over a given period
How to apply consumer insights to improve customer experience and encourage brand loyalty
When brands have developed a robust set of marketing and consumer insights, the next step is to turn this into a strategy which improves customer experience.
1. Start by building and analysing the problem – Combining analytics data with customer feedback can bring powerful results.
2. Organise customer feedback into segments – To give the brand an idea on what needs to be tackled for each different type of customer that they serve.
3. Search for quick-wins – Consider factors that can easily be actioned today, tomorrow or in a week.
4. Build segment specific strategies – Segmenting customers by value, purchase frequency or geography can enable brands to develop more tailored (and effective) marketing programmes. Building up segment-specific insights (their segment specific issues, needs and desires) can further strengthen this approach.
How can companies use insights to accelerate business growth?
Improve customer experience
According to the Customer Experience Strategy and Design Primer for 2018 by Gartner, 67% of companies compete mostly or completely on customer experience and 81% expect to be doing so within two years. Many companies fail to improve customer experience when they do not fully map out their customer’s journey or experience. Marketing and consumer insights are a vital component to mapping customer journeys and experiences accurately.
Sell more to your existing customers
According to the book, Marketing Metrics, by Paul Farris, “Brands have a 60-70% chance of selling to an existing customer, while the chances of selling to a new customer are only 5-20%. If brands want accelerated growth, selling to existing customers should be a priority. Insights can be useful as they give brands an idea of why the customer bought from the brand in the first place.
Expand into new markets with existing products
Insights can help brands adapt their marketing strategy to more effectively launch into new markets. market insights can help brands mitigate risk – they will know the mistakes to avoid, the approach that works and be sensitive to cultural nuances.
Retain more customers
Marketing and consumer insights can help businesses sharpen their customer acquisition strategy, understand why customers churn and optimise marketing programmes. By developing insight, analysing data, listening and engaging with their customers, brands can retain customers for longer, accelerate marketing performance and mitigate risk.