CUSTOMER INSIGHT TOOLS
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CUSTOMER INSIGHT TOOLS
Why ARE CUSTOMER INSIGHT TOOLS important?
Running a business is complicated. The more successful your business becomes, the more people want to buy from you, the more products you need to carry, the more employees and different levels of management you need, and the bigger the whole system gets.
Growth is great, but it often results in a gap between customers and business leaders. What was once a shared enterprise between shoppers and retailers can quickly become a corporate conglomerate without a strong sense of direction or goals. Business leaders become disconnected from their customers’ needs, behaviors, and preferences, and the world of the customer is left behind.
In the end, though, it is customers who fuel the growth of a business, and keeping in touch with and listening to them is the quickest and surest path to success and longevity. Knowledge about what customers want, how they interact with your business, and what their preferences are when shopping can all be grouped together into something called customer insight. Customer insight is what helps management and other higher-ups keep one foot on the ground, monitoring and doing their best to understand what’s really going on with their consumer base.
Even for business leaders who spend much of their time on the sales floor, getting a clear picture of what customers want and how they’re behaving isn’t easy; some stores see thousands of guests shop with them every day. To do it right, management needs the help of customer insight tools and customer analytics software. These programs capture and crunch info on the comings and goings of shoppers and help management see and understand how their business activities—from marketing to service—impact actual customer behavior.
Data-driven customer insight is a new and effective way of tying together the top and bottom levels of your business model. Insights into the world of the consumer can help businesses improve customer service, increase their reach, and drive sales. In this article, we’ll answer the question “what is customer insight?,” looking at how data drives improvement and success, explaining some of the tools involved, going over some customer insight examples, and showing why it all matters.
Customer Insights Framework
Turning info into insight is a complex process. Luckily, most of this takes place behind the scenes and is handled by a variety of dedicated software programs such as Customer Data Platforms (CDPs).
Generally, your customer insights framework or system will include the following stages.
The first step in this process is to set programs to work collecting data to understand the ways customers interact with your store. Programs attached to your POS, clienteling software, data from your online store or website, and other business touchpoints will track what people purchase, how often they visit your stores, how much they spend, and more.
Huge amounts of data can be pulled in by many different retail systems every day. To keep the whole system efficient, you’ll next need to figure out how to store and organize this data into a single customer view. Integrating customer data with product data, third-party data enrichment from sources like Experian’s Mosaic, predictive analytics tools, and other data sources is the most common method, and this ensures that info on individuals and groups can be accessed quickly and easily. In particular, you want to make sure you can gather and organize omnichannel data to gain customer insights on the end-to-end brand experience you offer.
With all the data in one place, customer analytics programs can now get to work looking for patterns and generating stats about customer behaviors. These customer analysis models will look at both what customers are doing and what they want right now as well as how they are likely to feel and act in the future.
Display and Action
Once the customer analysis framework has sifted through all the data, the insights generated by these programs will be condensed, simplified, and displayed in easy-to-understand visuals. With this info in hand, business leaders can start targeting trouble areas and making improvements to their acquisition, growth, and retention strategies.
Customer Analysis Tools
To make this whole system work, there are certain customer analysis tools which are indispensable. All customer analytics platforms will have some version of these programs, with additional applications depending on the kind of business a company does. Some tools, Like Lexer, provide flexible tracking and measurement dashboards so you can customize your analysis as needed.
A CDP or customer data platform is the place where all the data you’ve gathered from the various branches and channels of your business is compiled and sorted. The CDP is composed of thousands of individual customer profiles, and each new piece of data is paired with the customer who created it.
However, not every CDP is made the same, and you need to analyze each CDP vendor carefully to choose the best CDP for your business and build an informed CDP business case that resonates with stakeholders.
This is more a class of programs than a specific application, but customer insight analysis is where all the raw numbers get transformed into something your team can actually work with to draw meaningful conclusions and develop data-driven strategies for customer engagement. These programs will generate stats about purchase habits, target demographics, customer lifetime value, customer satisfaction, sales, and much more. Predictive programs which use AI and machine learning will also help you look into the future and prepare for the challenges of tomorrow.
Analysis programs can generate a lot of stats and info, but management will usually only be focused on a few of the most important and relevant metrics or KPIs. Dashboard programs translate the analytic data into simple and straightforward graphs and charts. This way, management can quickly know what’s going on, what’s working, and where improvements can be made.
Each business will need its own unique and specially tailored suite of software apps, but these programs should be in the toolkit of every company, no matter what you do.
Customer Data Insights
No you’ve seen how customer data insights systems work, but what exactly are these insights? What kinds of data do these programs deal with and what sorts of info do they generate?
Much of the data has to do with customer purchases. POS systems can determine what kinds of products people buy, as well as the recency, frequency, and monetary value of their orders. Info about returns can give a broad idea about how customers like certain products and how satisfied they are with the customer experience you offer in-store and online.
Programs can also figure out what kinds of products customers like and what they’re likely to purchase next. This is especially easy in e-stores, where software can keep track of all the items people look at and everything they search. Inventory programs can do similar work in physical store locations.
Customer service interactions and online reviews of products constitute more complex forms of data, but these, too, can be analyzed for keywords and phrases to reveal info about what customers do and don’t like about your business.
Insights are any conclusions reached from this data that can be leveraged to improve acquisition, lifetime value growth, and retention. Types of consumer insights can include knowing people start buying winter clothes in fall, finding out seniors buy more frequently than other age groups, discovering customers wished you carried higher quality cookware, learning which outdoor and sports products newly-acquired customers are likely to purchase as their second sale, and a million other things about what customers think, want, do, and need.
Consumer Behavior Analysis
Insights are extremely valuable for driving sales and success, but they don’t have a very long shelf life. People change and so do their behaviors, and customer behavior analysis tools are necessary to keep up with these trends.
Markets, customer preferences, and the ways competitors operate are going to shift over time, and one of the most important categories of insights is these very changes. Predictive programs can see into the future and see how new dynamics will affect your business. They’ll monitor churn rate to see why consumers are being drawn to your rivals and who is most vulnerable.They’ll be able to tell whether seasonal changes influence how much and what kinds of products people are buying. They’ll also have the ability to see what kinds of effects discounts, promotions, and other special offerings have on your consumer base.
Consumer behavior analysis is important because it gives your team a clear view of how customers feel, what motivates them to purchase, and what kinds of products they’re likely to buy. This is a good case of “actions speak louder than words,” and when you can’t speak to each shopper directly, looking at what they do can fill in the gaps.
Customer Insight Strategy
The aim of the whole customer insight strategy is to use what you learn from the data to craft a better, more customer-centric experience. Gathering and analyzing huge amounts of data is only useful in that it tells business leaders how to tweak their business model to serve consumers.
Using key consumer insights, your team can plan and deploy initiatives which make customers want to buy more and stay loyal to your brand. New product lines can be introduced in response to changing customer tastes. Employee training can be updated to alter the ways salespeople assist and interact with customers. New paid social ad campaigns can be rolled out which connect better with customer needs and encourage them to buy things businesses know they’re interested in. Discounts can be introduced at strategic times to drive up sales and make people shop with you more often. Memberships can be offered to produce similar results and keep customers loyal.
These customer insights examples are only a few of the ways that data can be used in the real world to revolutionize the way you do business and communicate to customers that their needs and preferences are important. Better listening and visible action means more sales and revenue.
Customer Insight Methods
Now you should have a good idea of how to do consumer analysis and understand some of the customer insight techniques commonly deployed by businesses. These customer insights can be used to inform your approach to customer engagement across every lifecycle stage.
Customer insight methods are practically infinite. Any kind of data, no matter how complex, obscure, or hard to obtain can be leveraged in some way to drive success. As a result, there are a lot of different software providers out there, each with their own tools for gathering zero-party, first-party, second-party, and third-party data and using that data to generate insights.
Lexer is a company especially worthy of mention for the wide variety of customer insights and experience programs offered within its comprehensive suite. As the only CDP with native tools for marketing, retail, and service, we help the world’s most iconic brands drive incremental sales growth from improved customer engagement.
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