Understanding your customers is not just good practice, it's a necessity. Customer insights form the backbone of smart decision-making, and help you align your offerings to what your customers actually want and need.
But what are customer insights? And why do they matter to your business?
Customers are generating feedback all the time, across every available digital medium. Social media posts, online reviews, customer service call transcripts, and live support chats are all rich sources of customer insights. Amidst this sea of data, how do you know what's worth keeping, and focusing in on?
This guide helps you cut through the noise, get clear on your best feedback sources, and maximize the benefits insights can bring to your business. Leveraging customer insights goes beyond mere data collection – it's about turning your data into actionable insights.
Understanding Customer Insights: The What, Why, and How
What are customer insights?
Customer insights, or consumer insights, are interpretations of your customers' behaviors, needs, and preferences. To be meaningful, consumer insights should reveal actionable intelligence about how customers interact with your brand throughout the customer journey.
As you learn more about your customers' needs, wants, and desires, you can use these insights to improve your products and services. It's also helpful to note that the term 'Customer Insights' is often used in two ways:
Customer insights can refer to the actual insights that are derived from customer data. For example, after analyzing feedback, you might summarize a finding like this: 'our customers gain the most value for their money out of feature X.' That's a specific and valuable insight for your business.
Customer insights can also refer to the business function of managing feedback and generating insights. For example, many companies have a Voice of Customer (VoC) or Customer Insights team that is responsible for collecting, analyzing, and interpreting data to extract actionable insights.
In other words, Customer Insights (the team) is responsible for generating the actual customer insights.
Why do customer insights matter?
Knowing how to source and leverage consumer insights can be the difference between leading, and lagging behind. Consumer insights are great inputs into your product development, marketing campaigns, and strategic business decisions. They help you answer questions like:
How and why people are using your product or service.
The types of customers that benefit the most from your product.
The factors that lead to customer loyalty.
What different customer segments think of your overall customer experience.
Why your customers choose your product rather than a competitor.
How to get customer insights?
If you're like most businesses, you probably have access to a million different sources of information about your customers.
Product reviews, social media posts, NPS survey data, purchase history, and customer service data are all rich sources of valuable customer insights. Depending on your industry, you may have a very long list of sources, including:
Customer feedback. Direct responses from customer surveys, reviews, and feedback forms.
Behavioral data. How customers interact with your website, app, and social media.
Market research. Studies and analyses offering a broad view of consumer trends and preferences.
Customer service data. Insights from common customer questions, complaints, and interactions.
Sales data. Patterns and trends from sales figures and purchasing behavior.
Impact and benefits of customer insights
Direct impact on business strategy
When executed well, a customer insights program has the power to transform your business.
Here are some key statistics that highlight the relationship between an active Customer Insights team, and improved business performance:
Revenue growth. Data-driven organizations that leverage consumer insights are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to be profitable. Companies that invest in customer data and implement data-driven strategies can also expect a 3%-5% increase in revenue.
Customer acquisition. Effective customer insights programs lead to improvements in customer trust, more agile decision-making, better data processes, enhanced customer experiences, and accelerated digital transformation. Having a customer insights team allows you to tailor your strategies to increase sales.
Overall business performance. Data-driven organizations outperform the average, with 4% higher productivity and 6% higher profits. They also experience above-market growth in EBITDA, which ranges from 15 to 25 percent, by empowering sales with consumer insights.
Realizing these benefits can set your organization on a path to not only compete, but dominate your niche. The key lies in not just gathering customer feedback, but knowing how to analyze data in a way that unlocks insight across every area of your business. Using a feedback analytics platform like Kapiche can help you accelerate this process.
Benefits for business units
In addition to top-line business benefits, consumer insights shine a light on areas where business units can iterate to improve. Here are some of the top ways your team can leverage insights to drive better results:
Targeted marketing. With meaningful insights, marketing teams have the power to adjust marketing strategies to individual customers. Just like Netflix tailors its homepage to individual customer preferences, you can tailor your offers to what your customers want and enjoy.
Pricing strategy. Set too low of a price, you undervalue your offer. But set your price too high, and customers won't buy. Finding the sweet spot takes research and experimentation. Good customer insights merge the feedback your customers give with their behavior, giving you a view of which customers are purchasing what, and why.
Forecasting. Accurate forecasting gives you more confidence to serve customers fully equipped and prepared. Under preparation here means accruing significant costs from not being able to service specific demands for your products. Insights can help prevent this by helping you do accurate forecasting.
Customer experience. Providing a great customer experience is the only way to build long-term loyalty. Satisfied customers become advocates for your brand, driving significant growth. Customer insights enable you to keep your finger on the pulse of how your customers feel, so you can keep improving their experience.
Market entry strategy. Expanding into new markets is often one of the riskiest moves a business can make. Starting with market research is a great first step, but turning that research into meaningful insights brings you much closer to the right decisions and customers.
Gathering Customer Insights: Exploring 5 Key Sources
Anywhere your customers share what they think about your product, staff, or ways of interacting are potential feedback sources. But raw data isn't super helpful on its own. Customer feedback needs to be transformed for individual pieces of information into clear, structured data before you can extract meaningful insights.
Here are some of the top sources to collect customer insights:
1. Customer feedback
Think of customer feedback as the direct responses you collect from formal customer surveys, or feedback forms. These provide structured inputs provide valuable insights on your target audience, their preferences, and pain points.
Example:
A mid-market enterprise chooses to launch a post-purchase survey via email to gather insight on product satisfaction and areas for improvement. To complement this feedback, you may want to leverage online review platforms to monitor customer sentiment and identify any recurring themes.
2. Behavioral data
Behavioral data involves observing and analyzing how customers interact across all touch points with your brand. Your website, app, or other digital channels are great sources to investigate. Metrics like page views, click-through rates, and purchase data are helpful to look at here.
Example:
Setting up customer insight tools in collaboration with marketing analytics tracking will help you collect data points that explore customer behavior. Event tracking around user flows and sales transactions, provide insights into areas of success or friction in the customer journey. A platform like Kapiche operates as a combined customer data platform, helping you thread together various data sources.
3. Market research
Market research provides a broader view of consumer trends and preferences against the competitive landscape. Market research data typically includes both qualitative and quantitative insights from surveys, focus groups, and industry reports.
Example:
To conduct market research, you might want to commission a survey or conduct focus groups to gather consumer insights on emerging market trends in your industry. Leveraging reports from market research firms like Nielsen or Gartner can provide a bird's eye view of market intelligence to pair with your primary research.
4. Customer service data
Every customer success team is sitting on a goldmine of consumer insights. Questions, complaints, and patterns of interaction involving your customer service agents offer valuable feedback on product and service quality.
Example:
Use insights in your CRM systems like Salesforce or Zendesk to start to track and categorize customer inquiries and complains. You'll likely find data on how to provide more connected customer journeys, and create more personalized customer experiences.
5. Sales data
Sales data is a great place to begin to analyze data around purchasing behavior and drivers. Transaction history, order frequency, and average order value are great metrics to track.
Example:
Start by analyzing transaction records stored in your CRM. You can identify loyal customers, detect buying trends, and tailor your marketing strategies accordingly.
Actionable Steps: Leveraging Customer Insights Effectively
Investing in customer insights should bring a massive ROI for your business. At Kapiche, we've noticed that teams who get the most out of these programs share some commonalities in their approach.
Here are a few strategies can help boost the odds of your investment paying off:
1. Gather data strategically
Turning insights into informed decisions starts with the way you collect data. It doesn't mean you should collect all the data that's available. You need to plan out a data collection strategy that supports your goals. In our experience, there are two main things you'll want to have in your approach:
Data that spans the entire customer journey. You might already send out one or two surveys at different stages of your customer's journey. Ideally, you should do a customer journey mapping exercise, and make sure you have no gaps in where you collect data. Individual, fragmented pieces of data aren't as powerful as one coherent story.
A diverse range of data sources. The best insights programs include in-house sources – like NPS responses, demographic data, support tickets – and external sources – like store reviews, and social media comments. It's often easier to work with internal data because you already have the full context behind it. But combining external with internal data will give you a more complete picture. Consider converting your data sources into a text format, to make it easy to do meaningful text analysis. Collecting all of your text data into a platform like Kapiche can help you quickly mine for collective insights.
It's also ideal for insights programs to track and analyze both solicited feedback (directly asking customers for feedback), and unsolicited feedback (the customer shares their feelings unprompted, on social media platforms or support tickets). Unsolicited feedback enables teams to uncover insights they would never find from solicited feedback alone.
2. Invest in a customer insights platform
If VoC teams have a nemesis, it's probably time. Manually coding and analyzing data using tools like Excel or Google Sheets is a never-ending (and often mind-numbing) process.
A customer insights platform overcomes this challenge. Great insights platforms can take a bunch of siloed data sources and seamlessly integrate them for you. It can process thousands of data points in minutes, saving your team countless hours of manual work – and saving you tens of thousands of dollars. At Kapiche, we make it easy to generate this kind of Insights program at scale.
3. Turn your data into actionable insights
Gathering data is the first step. Feeding that data into a tool should make it more accessible, and easier to use. Give that information more context, and you'll have turned that information into knowledge. But the real value comes from the last (often overlooked) step: transforming that knowledge into actionable insights.
Your customer insights program should be focused on the future. Collecting information and extracting lessons from the past is important. But you can't grow if you're only looking in the rearview mirror. Your efforts will only be useful if you apply the insights you've uncovered by making decisions that impact your product or go-to-market strategy.
Remember, the practice of Customer Insights is never ending journey. Each insight you generate is an educated assumption about the things that matter most to your customer base. If you want to operate from a place of wisdom, you must continuously feed new data into your program and update your interpretations accordingly.
4. Improve customer experiences using insights
The biggest hurdle in using customer feedback is translating that feedback into action. Your north star should be to use your insights to inform your customer experience (CX) strategy.
The best experiences don't happen when you simply deliver a good customer experience one time. What differentiates 'good' from 'great' is exceeding your customers' expectations over and over again, in an effortless way. Aligning what customers want with your CX strategy is how you create consistently excellent experiences.
5. Share great insights reports
Creating reports about customer insights is a key piece to ensuring your program is a success. You need organizational alignment and buy-in that customer research is a priority, for it to be impactful long-term. A great way to keep top of mind and show value to the research, is to communicate findings through summaries and reports proactively. This way, there will be less surprises, and hopefully more questions routed to the Insights team as internal visibility and credibility rises.
The question is: How can you make those reports powerful? At Kapiche, we've found that these simple principles can make a big difference in delivery:
Focus on providing information that has a purpose and is relevant to your audience.
Create reports that speak to different audience goals and priorities across your company.
Present your data as a narrative and take your audience on a journey.
Focusing too much on the numbers will decrease your audience's engagement. This is also the case if you focus too much on storytelling. Following a guideline like the one above can help you establish the right balance so you can craft reports that resonate.
6. Develop a self-service customer insights engine
Creating reports is vital, but if you want to run a customer insights program that continuously supports itself you'll need a self-service engine. Here's what that looks like in practice:
Centralize your data to improve its quality.
Adopt self-service tools for analysis to save your in-house team time.
Measure how effective the insights are by connecting them to business outcomes.
Democratize insights by making them accessible throughout your organization.
Adopting self-service solutions opens the door for generating better customer insights. Investing in a self-service style tool will free up a lot of time for your time. Instead of having to analyze data manually, they can focus on insight interpretation or building a better insights engine overall.
7. Future-proof your insights team
Once you have these pieces set up and working together, you can start to turn your focus to the future.
Getting started with your insights program is usually the hardest part. Once you have a program up and running, you can move into iteration activities to make it better over time. The more of a reputation you build across your company, the more of an impact your insights have, and the greater the demand for insights there will be.
Keep up to date by studying trends in customer insights, and bring those back into you program playbooks and protocols, to produce great results, year after year.
In summary: harness the power of customer insights
Customer insights are more than just data points — they are the key to unlocking growth, driving customer satisfaction, and staying ahead in today's competitive landscape.
By tapping into various sources of customer data, integrating information across touch points, and taking actionable steps to personalize experiences and optimize processes, you can position your team for success.
As we've explored in this article, the journey to unlocking the full potential of customer insights requires a strategic approach and a commitment to continuous improvement. It's about more than just collecting data — it's about transforming that data into meaningful actions that drive results.
Ready to get started?
Book a demo with Kapiche today and discover how our advanced customer insights platform can help your organization unlock the full potential of your customer data. Turn insights into action, and drive meaningful results for your business.
