What do your customers watch on Netflix, how do they interact with you on social media, and how loyal are they to your brand or product? The questions are many and nuanced but the essence of them is simple: do you know and understand your customers based on insights? This break down of consumer insights anno 2018 is applicable for all companies.
One size does not fit all. That’s the reality of today’s marketing landscape — we all want more personalised products, communications, relationships with brands and so on — that’s only likely to increase over time. Some brands go to great efforts in establishing communities and BFF-like relationships with their customers, and this can help create loyalty and long-term business value. But what is the secret recipe?
Consumer insights, of course.
Now more than ever, consumer insights are vital assets for a company’s long-term survival and economic performance, and they (should) act as the fundamental basis for any marketing-related decisions or activities in any organization — big or small.
Why is that? Honestly, consumers are not stationary entities, so it is important to understand their buying behaviour and underlying motivations along with how their relationships with businesses and products develops over time as their lives develops, too.
Consumer insights help companies adapt their products and services to the market and it works as the marketing department’s guiding star for how to carry its messages to the audience, and, of course, which audience to target.
Therefore, consumer insights make us able to better understand individual consumers and target groups, as well as how and why people act in a certain way or do things in a particular order.
The world around us is developing at a faster rate than ever before and the same goes for most industries, especially those operating primarily within the digital sphere. Companies need to be flexible in developing solutions and products that adapts to the changing consumer needs. The bottomline of consumer insights is that if you don’t know your consumer, it’s very hard to build a product or service that will develop to meet their needs and desires.
The better companies are at understanding where consumers sit in a larger context, and how those trends and behaviours are likely to develop, the better they will be at positioning their products services and brands.
AI and large scale consumer data
The rise of the prevalence and availability of data has led to an increased ability to focus on consumer insights, and we are becoming progressively better at understanding the motivations and rationale behind behaviours across audience segments. However, this presents a challenge to organisations. Managing, interpreting and understanding this data is becoming increasingly complex and laborious. This is one of the reasons why integration of tools like IBM Watson and other AI solutions has expanded rapidly in the last few years. These solutions are going to change the way businesses go about understanding their consumers.
AI technology has the ability to understand and identify patterns in data at scale not previously possible. By entrusting the processes of identifying insights to technology, organizations have the possibility of reaching scales of effectiveness and testing hypothesis that hasn’t been feasible, due (in part) to the time taken and complexity to do so. This shift also demands a more focused approach to interpretation and utilization of information collected to produce better strategic answers and solutions. Whilst technology may help interpret that data, it will never replace the ability to turn that information into actionable insight.
As an example; it’s a fact that most people drink beer at music festivals but we don’t necessarily know why or in what context. As a tool, AI allows us to fill in some of these gaps of knowledge. We used IBM Watson to interpret thousands of images from Roskilde Festival to identify those images containing a specific beer brand’s product. Whilst only a demonstration of functionality, this kind of information, in context, may help the brand shape its messaging, sponsorship or even product going forward.
This use of technologies to interpret consumer insights is valuable, but as the process of analysing data becomes much more effective, open and achievable there will be a need for technologies to become more nuanced within understanding real world scenarios due to components such as cultural differences.
Accordingly, the trend we will see in 2018 is not so much the introduction of new technologies but more the introduction of new ways of thinking or approaching challenges as a result of these technologies. Brands and agencies will need to adapt their way of thinking to incorporate the developing technologies.
Where to start and how to pull off consumer insights
Essentially, you should look at the desired behaviour or change that you want to understand or achieve and go from there.
If you’re an agency like us, initiating a consumer insight analysis for your client should start with this first question: “What does the business want to achieve or learn?” Is the objective to sell more cinema tickets, increase the customer lifetime value or identify the most valuable target audience? These questions are examples of potential starting points for developing insights, so bare in mind the organization, the industry, in which it operates, and the specific goal that it wants to achieve.
Start the analysis by working from the bottom up and search for data that explores different motivating factors, which are likely to work towards the objective from a lifestyle and behavioural perspective. Here, it is imperative to understand the nuances between different customer segments, and obviously, seeking for the why behind these behaviours are key to acquiring valuable consumer insights. Once you know that, you can begin to build out a selection of questions or hypothesis you wish to answer and use the data and tools at your disposal to answer those.
How to utilize consumer insights
Clearly, the best insights are the ones that you can act upon, and where you can see a behaviour that has an obvious answer or leads to an obvious action for your brand.
However, utilizing consumer insights demands the ability to be flexible. Given the way the world is changing there is an enhanced importance for brands, marketing agencies and advertisers to continue to be innovative. If you don’t develop, change or improve, you’re going to lose out.
Consequently, in order to take advantage of valuable consumer insights, companies must be open to being flexible and adapting their product or even business model to fit the ever-changing expectations of its environment.
This is, of course, easier said than done, which is why managing change within especially larger organizations should to take place gradually to adhere to both internal and external stakeholders.
Without doubt, consumer insights are crucial to today’s brands and marketers as they navigate the constant developing landscape of advertising to achieve the loyalty of consumers’ wallets. The importance of consumer insights will only increase as the shifts in demands of consumers continues to reach for new heights. Buckle up if you haven’t already!
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