In the modern business landscape, competition is everywhere. In this environment, companies seek to gain advantages over one another in order to deliver a better customer or client experience and thereby increase their sales. In turn, the general public have come to expect their experiences to meet the new high standard that this competitive atmosphere has created. For these reasons, the tracking and utilization of consumer insights is invaluable today.
What are Consumer Insights?
Consumer insights are the cataloging and understanding of consumer behaviors, feedback, and purchasing patterns. In other words, it is the act of completely changing your perspective as a business and looking at your products and practices through the eyes of your patrons. The goal is to understand the consumer’s decision making process to figure out why they decide to purchase a product or why they prefer one business model over another. These insights can be gleaned from a number of sources including product and service reviews, customer service feedback, market research, purchasing histories, and customer experience surveys.
Benefits of Using Consumer Insights
The advantages of implementing consumer insights are huge. According to recent data from Microsoft, companies that successfully interpret customer behaviors and patterns into coherent customer insights outperform their similarly situated competitors by 85% in terms of sales growth. This is accomplished in a number of ways. First of all, inventory planning and price optimization can be greatly improved by understanding consumer purchasing patterns. This can reduce the amount of liquidations a retailer must perform and increase overall revenue. Additionally, learning the preferences and hang-ups that your customers have can help you to tailor and personalize experiences to each individual or group of consumers. This personalization is one of the key areas in which the general public have increased expectations of their consumer experiences.
These insights can be especially helpful for large companies and the unique decisions they face. For example, insights on sales and customer demand can weigh greatly on whether or not a company wants to expand into a new market or leave a market that is underperforming. Insights can also be used to appraise long-term consumer expectations and demands in order to reduce customer turnover, maximize customer lifetime, and ultimately increase the company’s revenue. Each of these factors may seem minor, but their totality makes the massive impact in performance reflected in that 85% increase in sales growth.
How to Start Using Consumer Insights
One of the first things that must be considered when beginning to utilize these insights is what your particular company’s goals are. The insights you need to pay attention to will be very different if the goal is to optimize your inventory as opposed to customer retention. This goal will help to determine where the data will be coming from, how it will be managed, and its relative quality. Additionally, the data needs to be securely stored but also available and easily accessible to those who need it. Finally, it will be important to assess what parts of your company will be affected by this process of data collection and storage. It may be necessary to hire new employees or reorganize departments in order to accommodate these activities.
