We used to use phrases like market research and customer data. Now that ‘customer insight’ has become a buzzword, it implies that we used to not really understand our customers. Even if we had plenty of information about them, whether from market research or customer satisfaction surveys, from our salesforce or distributors, from our customer database or today from what they tell us through our website, did we really bring it together to achieve ‘true insight’?
Consumer insight has two forms. Firstly, there are ‘insights’: penetrating discoveries that can lead to specific opportunities. Market research or customer databases can deliver these, and often do. However, much larger than this, and central to what companies need today is ‘insight’, a deep, embedded knowledge about their customers and markets that help to structure their thinking and decision making.
This type of insight is not about having a few pieces of the jigsaw, but most of them (‘all’ would be a dream), joined up to produce a quantified picture that everyone, from senior management to those who manage customers, can see.
It comes not just from market research. It comes from many pieces of research, combined with data from database, financial and planning data, market and competitor intelligence, feedback from sales and customer service staff, including customer complaints. It comes from having a passion for expressing marketing situations in real numbers, and from trying to understand these numbers. It is a picture built from any source that is available in a coherent format that addresses anomalies and apparent contradictions, and gives appropriate weight to all of them.
Dig deeper
‘Insight’ combines several ideas. It includes ‘classic’ areas, such as knowing who customers are, what they do, where they are, what they buy, what they would like to buy, what media they are exposed to and what media they choose to view, listen to or read. It also includes psychological areas: what customers think and feel, what their objectives and strategies are, and how these influence how they behave. Some of these are not conscious behaviours or thoughts. Most are affected – perhaps even conditioned, by various external factors, from the state of economy and society and their market, to the way a product of brand is marketed and sold.
Insight also includes areas that customer service (and latterly marketing) people focus on such as the experience that we give to customers. It includes their feelings about the experience and whether they have told the company what they think about it through complaints or compliments, or through requests for further information, or whether they have unresolved problems. It includes some idea of whether the company has delivered against any promises made (for example, through branding, product descriptions or marketing communications) and whether it has fulfilled the role in their life that customers have allocated to the company. Finally, it includes whether the company is gathering and using customer insight properly in the legal sense and also in the sense of allowing customers to delineate where their privacy begins and our insights should end.
Establish a process
Also important is the process by which we decide what insight we need, how to gain it and how to use it. Without this, it can be expensive and even obstructive. It includes deciding what insight you need and what you do not need, as well as how you aim to use the insight and what operational processes you need.
Managing the insight process can be difficult, which is why so many companies contract out different elements. Most companies routinely contract out market research because codes of practice usually require that the respondent’s identity be kept from the client. With information from customer databases, the opposite is true. A database of existing customers – and even some databases of prospects – must in most cases by law consist of individuals who have given permission for their name to be used by the company. This means that they can be managed inhouse. However, scarcity of the required database and statistical skills, combined with the fact that outsourced suppliers have fine-tuned their policies and processes and their own partnership relationships, means that many companies still outsource some, or all of their database analysis.
Two ways of working
This means that market research agencies increasingly need to work alongside database agencies. However, while market researchers are used to analysing relatively small and deep databases, customer database analysts are used to analysing very large and relatively shallow databases. Different statistical skills and knowledge are required for these two. Some suppliers have realised this and have established specialist customer insight agencies that are used to combining the two ways of working.
This could all create a long menu, which can be shortened by identifying what, if any, insight is missing. Do you have the insight you need to match your competitors, to achieve growth or efficiency objectives, for example? Insight without applications is a waste. Insight without innovation or creativity is also a waste. Having lots of insight isn’t necessarily going to help you make more money and can lose you money if you just accumulate it or become confused by its sheer quantity. So my final point is that learning to use insight effectively is just as important as learning to create it.
