What Is Consumer Insights & Why Is It So Valuable?
Consumer insights is a term used in reference to research and information gathering regarding a particular segment of individuals which usually informs the brand, product, sales, marketing, and operations strategies of a company. Typically, consumer insights are derived from the analysis of data in an effort to see consumers through different lenses.
Furthermore, consumer insights is almost always conducted in a manner that encourages a unique business action to more effectively satisfy the needs or wants of the consumer. Why? Firstly because it results in happier customers, and secondly because this approach has very high potential to create dramatic increases in both sales and financial benefits for those who are supplying the products or services to those consumers (i.e. companies).
In essence, consumer insights is defined as research and data-driven interpretations that businesses use to gain a deeper understanding of how their target audience thinks and feels. This understanding is usually broken into three key areas: 1) demographics, 2) psychographics, and 3) behavioral economics.
These areas enable companies to truly understand the wants and needs of their consumers and even more importantly, why their customers ultimately feel the way they feel and do the things they do.
How is Consumer Insights Used in the Business World Today?
In the competitive landscape that exists today, it is expected by customers that top-quality experiences will come along with high-quality services and products.
Therefore consumer insights are necessary tools that analytics teams must use to provide valuable information to assist businesses in exceeding the expectations of the customer.
There are several stages of the development at which consumer insights can be used. It can be valuable high upstream as a means of clarifying the innovation priorities the company would like to invest in.
For example: In the offer development stage, it can be used to bring the value proposition and the wants and needs of the consumer into alignment.
Furthermore, it can be used during the offer launch to draw public attention and make it agreeable with the message of the brand.
However, if one thing is clear, it is that consumer insights plays quite a strategic role at the start of the customer value chain. It is also a living element as it relates to consumers whose needs could change as their relationship with products, brands, and companies develop over time.
This is especially so if responses within a product category are offered by other brands during the design stage. As such, it is vital to check the significance of consumer insights regularly to ensure that products are consistently aligned with market expectations when launched.
What are the Many Use Cases?
A number of industries, such as retail, CPG, grocery, e-commerce, manufacturing, and financial services, now see the value of highly-personalized engagement and customer interactions. They realize that consumer insights are vital for the growth and retention of customers.
However, to remain competitive, operational silos of interactions with customers have to be broken down and assimilated. A unified experience will be provided by successful brands across all sales and marketing channels to gain an understanding of the end-to-end views of the journey of the customer. Today this is called building effective “omnichannel” customer experiences.
In recent years, there has been a dramatic pendulum shift that sees startups and smaller brands heavily investing in consumer insights and analytics. In fact, they often invest even more heavily in insights programs when compared to incumbent brands that are much bigger.
The needs of these smaller brands are more agile and they are searching for quicker methods of engaging in research. They’ve realized how vital the consumer voice is to product branding, development, and advertising; and are making the research team the foundation of their growth tactics.
This trend is expected to continue and accelerate in the future, and there are 4 key components to effective Consumer Insights research: 1) Demographics, 2) Psychographics, 3) Behavioral Insights, and 4) Organizational Attributes.
The 4 key Components to Effective Consumer Insights
Demographics and their Attributes
Demographic analysis has been described as the sociological study of human segments or ‘groups’ and can cover a wide variety of data or information to analyze, with these groups being defined by criteria such as geographic location, gender, age, race, religion, class, wealth, nationality, education, and even ethnicity.
It’s vitally important to note that consumer insights is both the art and science of identifying individual consumer cohorts to better understand what they want and need, so organizations can implicitly better serve them and their desires. Today, most businesses view demographics through the lens of “household segments” and leverage non-personally identifiable data to better market their products and services for better customer experiences.
Psychographics and their Descriptors
Psychographics is quite simply, the study of human thoughts and feelings, and can be defined as a qualitative method for the descriptive analysis of our collective human psychological attributes when directly applied to the study of our attitudes, personalities, opinions, and values.
This area of consumer insights is often confused with demographics, however, they are distinctly different and should be treated as such. Oftentimes, people will use ‘demographics’ as a blanket term for all variables including the attitudes, beliefs, and even cultural attitudes of certain entire generations. This often happens when referring to the defining characteristics of large groups of people born during the same time periods (i.e. “Millenials” or “Baby Boomers”, etc.)
However, psychographic consumer insights variables (opinions, values, etc.) are distinctly different from demographic variables (age, gender, etc.), behavioral variables (activities, interests, lifestyles, etc.), and even organizational variables like industry, the number of employees, purchase data, and functional areas.
Behavioral Insights as a Practice
The understanding of human behavioral insights involves researching and collecting data and information on their activities, consumption, interests, and lifestyles. This form of consumer insights segmentation also includes thoughts on arts and cultural issues, current events, the environment, gender, politics, religion, recreational activities, sports.
Now within Customer Insights, there exists a specific 6-step process that researchers, analysts, and advertisers may use to efficiently understand the key segments of their company’s brand or marketing audience:
- Identify core values, objectives, and benchmarks OR in the case of advertising: products and value-proposals
- Identify the buyer-types to target as well as the process for these buyers as consumers or purchasers of the product.
- Identify the potential gaps as this illustrates and finds what’s important to the buying process and the stages of behavior.
- Create high quality and engaging content for the stage where each key message and benchmark is identified and discussed.
- Organize marketing distribution to maximize the potential of content (can be via social media, blogs, or media like google display networks.)
- Measure the performance of campaigns with both engagement and financial metrics like views, clicks, CTR (click-through-rate), ROAS (return on ad-spend and), ROI (return on investment), and appropriate post-campaign attribution windows (14-day/30-day, etc.) for overall Incremental Sales Lifts.
Organizational Attributes & Insights
A very newly emerging area of Consumer Insights actually includes organizational attributes and contains firmographic variables such as individual contact info and more importantly company info like industry, employee count, revenue, title, and even core functional area. Naturally, we’re talking about data this deals with B2B marketing information.
This is data that has typically fallen directly within the area of lead capture and lead generation. However, it is increasingly finding its way into CRM management tools like Salesforce and other platforms that organizations are able to leverage for highly valuable consumer insights strategies.
Together, with the objective goal of focusing on market research and serving as a bridge between Marketing and Insights departments within an organization, consumer insights can get an in-depth understanding of how to motivate potential B2B clients for the greater long-term commitment of recurring revenue.
High-demand jobs and Services in the World of Consumer Insights
The high-demand jobs and services in the world of consumer insights include:
- Data Analysts
- This role includes using various internal data sources and outside research to create analyses based on customer, sales, and company objectives at micro and macro levels. It could also involve developing hypotheses, analyzing data, and creating remarkable visualizations to tell a story and transform intricate data into actionable insights that are easily consumable.
- Consumer Insights Consultants
- The goal of this position is to serve as a reliable adviser to clients. This includes being responsible for a core set of clients as well as playing a vital role in ad-hoc projects. This involves serving as the day-to-day point of contact, project manager, and engagement lead, specifically when working on Insights and Market Research projects.
- Consumer Researchers / Interviewers
- This position uses experienced market researchers to carry out specialized primary and secondary research, consumer surveys, insights panels, aiding in research studies, tracking competitors, engaging in consumer trend-spotting, social-media sentiment analysis, longitudinal studies, brand-lift studies, and market-share, category-share, and share-of-wallet analyses.
- Digital Analyst
- The responsibilities of the digital analyst include providing actionable insights, measurement plans, and generating reports that assist in driving conversions across e-commerce channels. This person would also be responsible for the development and maintenance of new and current key metrics like campaign and website performance.
The Future of Consumer Insights
Understanding the needs of the consumer is a vital element of the development of consumer technology. However, traditional techniques of collecting consumer insights are imperfect — even the action of collecting insights via interviews or surveys could actually change the behaviors and responses of consumers. In addition, collecting large volumes of information over extended periods is frequently impractical because of the complexity and cost of these large trials.
Therefore, we expect to see new technologies like sensing algorithms, machine learning, and connectivity technologies to become more and more ubiquitous. We anticipate seeing the industry leveraging them for the particular purpose of gaining increasing consumer insights will continue in the future and only get better as technologies continue to advance.
This will be true not only in product concept design, but product testing, and following the actual launches of products as well. The primary advantage of these types of technology-based data collection capabilities is the fact that they will be scalable in a manner that traditional consumer insights and survey methods will never be.