Forrester, in its report ‘Insights-Driven Businesses Set The Pace For Global Growth‘, (2017) shares that insight-driven companies are on 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 can easily gather information from consumers. However, collecting data does not translate to having high insight.
Extensive data analysis allows businesses to extract meaningful facts about their consumers and marketing efforts, giving them an edge over their competitors. The goal is to find more effective ways of acquiring, engaging and keeping customers over the long term by understanding how their target consumers think and behave. Marketing and customer insights offer more than just data and research. They provide multiple perspectives on customers’ issues, needs, and desires.
What is the difference between a marketing and a consumer insight?
Brands can extract marketing insights from their business’s existing marketing analytics to improve their marketing efforts. This marketing analytics data tells them if campaigns and messages are working. 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 crucial for brands to understand their existing customers. By providing important information on what customers like, how they behave, and any issues they have, customer insights allow brands to fine-tune their marketing operations and speed up marketing campaigns.
How insights can affect your 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 predict a customer’s behaviour in advance. Different analysis methodologies can help brands divide customers based on their predicted lifetime value, which can help focus on retaining high-value customers.
They help keep customers satisfied
The best way to see if a business is effectively meeting customer expectations and discovering customer priorities is to engage them in conversations and surveys. Customer insights can also aid brands in building stronger relationships.
Insights help with better business decisions
Marketing and customer insights help businesses to make better decisions and allow businesses to resonate with their target customers. Many brands are under pressure to prove a return on investment. Customer insight can help by ensuring that they have effective messages and finely tuned targeting within their campaigns.
Turning data into contextual insight
Brands should start by separating out the marketing vanity metrics from those that truly show 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 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 convert into customers. Therefore, 5.8% of those who clicked found the product, copy or design useful for them. Brands should look into how 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 companies are clear about these various metrics and how they affect growth, conversions and other key performance indicators, they are in a suitable position to optimise their marketing. Through insights, brands can make intelligent decisions and figure out where to invest their time and budget in the future.
What KPIs need measuring across digital marketing and customer engagement?
Key Performance Indicators or KPIs are vital in order to drive accountability in marketing programmes and should ideally apply across all marketing activities. When the results fall short of the required level, brands can then 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 to convert leads into new customers.
- Average collection period–The average number of days between 1) the dates of credit sales, and 2) the date of money collection 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 period of the relationship.
- Customer churn rate–The number of lost customers divided by the number of customers at the start of the period. We typically express this as a percentage (%) of all customers and on a monthly/annual basis.
- Average customer retention period–The percentage of customers the company has kept over a 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 period.
How applying consumer insights helps improve 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 of what needs to be tackled for each different type of customer that they serve.
3. Search for quick-wins–Actionable factors that brands can implement 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 increase business growth?
Improving 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 cannot 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.
Selling 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 fast 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 originally.
Expanding into new markets with existing products
Insights can help brands adapt their marketing strategy to 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.
Keeping more customers
Marketing and consumer insights can help businesses sharpen their customer acquisition strategy, understand why customers churn and optimise marketing programmes. Brands can keep customers for longer, accelerate marketing performance and mitigate risk by developing insight, analyzing data, and listening and engaging with their customers.