Know Your Consumer – Leveraging Insights To Shape Effective Strategies
Data, alone, is not enough to drive effective decision making. Here’s an interesting take on how consumer insights can be leveraged to deliver exceptional business value and customer experiences.
Consumer Insights is well-known but often-undervalued. Foundationally different from market research, it is an understanding of the consumer’s pulse. Companies like Apple, Starbucks, Uber, Spotify, and Amazon have effectively utilized consumer insights to disrupt the industry and become market leaders.
Findings vs Insights
Findings from data do not aid decision makers enough to improve brand value as no decisions are taken based on numbers alone. Insights, on the other hand, are an understanding of the non-obvious. They are perspectives drawn from a combination of facts that make perfect sense, but most importantly, perspectives that are actionable.
Consumer Insights can therefore play an instrumental role in formulating effective marketing strategies, improving existing ones, setting long and short-term goals, offering hyper-personalized customer experiences, and testing new products and solutions.
Let us take an example of how understanding customer behavior is vital to shape operational strategy: The Classic Customer Service Challenge – Reducing Call Volume
A business wants to reduce the number of calls being routed to Customer Service. Consumers contact Customer Service for a variety of reasons. Analyzing trends, it was found out that Order Information was the most common query by customers, despite multiple communications sent to them post order placement. Emails are sent at various points during the lifecycle of an order. If a huge proportion of calls placed are regarding existing orders, it could either mean that the emails lack sufficient information, or customers are placing calls without opening mails. Understanding why consumers call and how they respond to existing communications are key to reducing the number of calls placed.
Drawing better insights from data
Given the sensitive nature of insights, here are some caveats to keep in mind while generating useful, actionable consumer insights:
- Choose Wisely – With high levels of unpredictability and variations in customer behavior, it is important to ensure that the data is chosen correctly to provide an accurate reflection of consumers’ preferences.
- De-jargon – Lesser jargon leads to a more captivating story, helping one make decisions faster. It is always desirable to have simplified vocabulary in your story, even if it is being used to describe technical concepts or metrics.
- Zero Bias – While working on a marketing strategy, one must keep aside executive biases. Consumers’ wants should be the biggest motivator.
A Fortune 500 sports retailer partnered with Mu Sigma to optimize their targeting strategy
Mu Sigma worked with a Fortune 500 sporting goods manufacturer and retailer to formulate effective customer targeting strategies for different segments of their consumer base.
Analyzing purchase behavior, we found that majority of purchases by female consumers were items meant for men and kids, which led to the question – why do they not purchase items for women?
As it turned out, a huge number of unisex items were tagged under the men’s category. Similarly, there were a set of similar, unisex items belonging to both kids’ and women’s categories – the kids’ items being priced much lower.
Insights drawn from these findings helped the client’s global in-house analytics team offer strategic suggestions to top level executives. The recommendations included the recategorization of certain items and a revised targeting strategy for female customers with respect to those items.
Consumer Insights – The key to Business Decision Making
Understanding one’s consumers gives businesses an idea of the demand and hence the “why” behind certain trends. This in turn leads to the formulation of better strategies and opens the door to explore more problems lying beneath the surface. Corporate strategists and the C-Suite can rely on consumer insights to make decisions that can drive company growth and sustainable revenue, while delivering a personalized customer experience.