Consumer Insights

Importance of Consumer Insights

Consumer insights are important for brands as they help them to provide more suited solutions to the consumers and outperform their competition. It will eventually lead to more sales and an increase in market share. Brands can also use consumer insights to expand their product categories and break into new markets. It is the need of the hour too, because of intense competition in the market.

Consumer insights and big data

It is no secret that the explosion of information technologies has enabled companies to generate data easily. However, the problem comes with having too much data to use. Companies have access to many platforms to generate data, but the data alone can not be useful. It needs to be converted into meaningful information. This is where the concept of big data comes into the picture.

In the age of information overload, it is a tough ask for companies to extract meaningful information from huge sets of data. Big data offers big opportunities as well as challenges to companies. When the data is managed and used effectively, it could provide meaningful consumer insights. Companies need to design an effective information management system, and equally important to have expert data analysts at their disposal to gain valuable consumer insights.

Techniques to Gain Consumer Insights

Companies need to gain valuable consumer insights to develop or improve their products/services. There are many techniques through which companies can extract consumer insights. Some are based on statistical models and some are on user-responsive surveys. Here we discuss the most common techniques.

1. Questionnaires – Companies provide users with questionnaires to answer specific questions. Companies usually ask questions such as what motivates consumers to buy their brands, whether are they satisfied with the product/service, and what areas could be improved. These questionnaires help companies to improve the product/service and make their operations more efficient.

2. Third-party data – This means using third-party data to gain consumer insights. Companies that do not have access to data themselves use the data generated by other companies. However, it is important to get third-party data from the same industry. Companies also use this type of data because they do not have the resources to get it themselves.

3. Behavioral data – This data shows how consumers behave during the purchase of a certain product/service. Companies could access this data with the help of some software or through a firm that specializes in generating and managing behavioral data.

4. Real-time user testing – This technique is used to get consumer responses in real time. Companies use A/B tests to identify consumer responses to the processes and features of an offering. These user responses help companies to identify what works and what does not for the consumer base.

5. Customer sentiment survey – This kind of survey is used to determine the overall feeling of consumers. However, they provide fewer concrete responses than questionnaires. Star ratings and NPS are used in customer sentiment surveys. For instance, a user uses an app, and at the end, the app shows a message – rate your experience.

6. Predictive models – Artificial intelligence and machine learning has equipped companies to employ predictive models to gain consumer insights. They can manage large sets of data and extract valuable insights with greater accuracy.

Types of Consumer Insights

Overall, there are five main types of consumer insights:

• Socio-Demographics – Companies get this type of consumer insight through interaction with the consumers. Brands get to know information such as the gender, age, income, marital status, and working status of consumers. It could be used to segment the audience accurately and provide more customized solutions to them.

• Sales trends – Sales-related data helps companies to examine sales trends. It identifies whether the product/service is achieving the results in terms of sales. Companies can make financial projections based on such consumer insights.

• Customer feedback – One of the most common types of consumer insight is customer feedback. These insights help businesses to either improve or sustain their position in the market. It tells companies if their consumer base is satisfied or dissatisfied with their offerings.

• Buying motivations – The motivations behind buying specific brands could give valuable consumer insights to the companies. It helps companies identify the drivers for consumers to purchase certain brands. The motivations could be a specific feature, quality, or a brand’s problem-solving approach.

• Brand perception – This type of consumer insight tells companies how consumers think about their brands. If consumers have positive perceptions about a brand, they are likely to continue using that brand. Therefore, companies could improve their product/services by using these insights.

Consumer Insight Examples

The world’s top brands, such as Apple, Nike, and Netflix, use different techniques to gain consumer insights. They use these insights to improve their product/service and the customer experience. Here are a couple of examples of top brands using consumer insights to their advantage.

Nike

Fig. 1 - Nike uses consumers interaction to gain consumer insights

Starbucks

Fig. 2 - Customer feedback, A way for Starbucks to gain consumer insights