Consumers now expect high-quality experiences to drive high-quality products and services in today’s competitive retail landscape. Data and consumer insights are the tools required to provide useful information to businesses, particularly consumer packaged goods retailers, in order to exceed customer expectations. Discover the importance of consumer insights and how they can help you stay ahead of the competition. This is one of the best ways to use consumer insights for growth and customer retention.
What are consumer insights?
Consumer insights, also known as customer insights, are the comprehension and interpretation of customer data, behaviors, and feedback into findings that can be used to enhance product development and customer support.
These insights assist businesses in obtaining a 360-degree customer view in order to better understand customer behavior when making purchasing decisions. Such insights also provide a better understanding of how customers think and can assist business owners answer critical questions like:
- Why are sales of a particular product declining?
- How likely is it that you will succeed with a new target audience?
- How does your target audience perceive your brand?
- What are customers’ thoughts on a new or potential new product?
- How do customers buy more expensive products, upgrades, or add-ons to existing products?
- What is the best way to sell an existing product or service to your customers?
- What can you do to boost marketing campaign conversion rates?
- How can I gain a thorough understanding of market basket analysis?
- What are the best ways to use consumer insights for growth and customer retention?
You can obtain customer insights from various sources. They include customer service data, product and service reviews, market research (including how weather affects shopping and where customers spend their money). Others are purchase history, and customer sentiment.
Why are customer insights important?
Consumer insights can enable a company to better personalize and tailor products to their customers’ needs, wants, and demands. According to Microsoft, organizations that use customer behavior to generate insights outperform their peers in sales growth by 85%.
Businesses can use these insights to broaden their product/service offerings. They can also create new marketing strategies, develop detailed customer personas and customer journey maps, and improve existing offerings. Because effective use of customer insights is designed to enhance customer experience, it can also result in increased revenue. Microsoft also confirms that “a moderate increase in customer experience generates an average revenue increase of $775 million over three years for a company with $1 billion in annual revenues”.
Customers also have higher expectations for customer service. What is the significance of this? A great customer service experience will earn loyalty and turn customers into promoters with a lifetime value of 6 to 14 times that of detractors. Furthermore, companies that excel at customer service outperform their peers by 4-8%.
The advantages of leveraging customer insights
Developing connections with your customers, better understanding them, and generating meaningful and quantifiable results by using customer insights to inform strategic and tactical decisions is possible. Other advantages and actionable steps that consumer packaged goods (CPG) companies can take as a result of retail analytics and customer insights include:
- Predict churn. Improve your understanding of future expected revenue. Then, you can pinpoint where you can improve customer service and potentially reduce customer churn.
- Increase customer lifetime value. Simply put, the higher your company’s customer lifetime value, the more revenue it can expect.
- Provide personalized experiences. In the retail space, customers increasingly expect personalized experiences and interactions. You can deliver more tailored experiences by leveraging consumer insights.
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- Improved inventory planning results in smaller inventories and fewer markdowns. Utilizing consumer insights, especially sales data, will assist you in more accurately forecasting the amount of inventory you require. With more accurate inventory levels, your company is less likely to have excess inventory that must be marked down.
- Promotions targeted to customers most likely to buy. With extensive knowledge of customer purchasing history and other relevant data, you can target specific promotions to customers most likely to take advantage of them.
- Establish optimal product pricing. The ideal product price is whatever the customers are willing to pay. You can effectively set product pricing to deliver the highest returns with retail analytics providing greater customer insight.
- Expand into new markets or exit underperforming ones. More accurate customer and sales data will impact many areas of operations, particularly sales performance. With these insights, you can determine which new markets to enter and which areas do not provide a sufficient investment return.
Tracking data to get consumer insights
Merchandise managers, marketing managers, and other consumer goods industry leaders should use all available data to make better decisions. This information will primarily be derived from Trackers data analytics, which employs predictive analytical tools and solutions to provide actionable insights by accumulating data about products, suppliers, customers, the entire market, and the overall business operation. This information is divided into two categories: observational data and sales data.
In-store activity, inventory, promotions, competitor activity, customer behavior, and other similar metrics are examples of observational data.
Sales data is simple information that examines what product sells, how frequently, how one product sells compared to another, and other related metrics.
How to begin using consumer insights
Setting a goal is one of the most important aspects of using consumer insights. It’s also critical to figure out where the data is coming from, how it’s being collected and managed, and whether or not the ability to collect high-quality data exists.
You must also plan how to use the data; data governance is critical. Businesses must manage data and ensure it is safe and accessible. Determine which areas of your business will be impacted by the data collection/management process and how different departments will interact with and use the data.
Data-driven consumer insights, such as described above, have been shown to improve and personalize the customer experience, strengthening customer relationships, increasing customer retention rates, and driving revenue.
Survey54 gathers and aggregates transactional, observational, and behavioral data on African consumers. To learn more, please contact our team today.