Becoming a customer-centric business seems simple enough in principle; keep your customers at the centre of your business decision making. What that means in practice is something else. Among the many reasons business fail to become customer-centric is that their customer understanding does reflect what drives customer behaviour. Customer insights, however, provide a business with a common framework across the business for designing and choosing activities based on an understanding of what motivates customers to buy and engage with your brand as the starting point.
A customer insight in its simplest form is an understanding of what drives customer behaviour. The key part of this definition is that an insight must relate to driving a behaviour, without this link you cannot use the insight to effect change and achieve our objectives. A second key part of this definition is that it doesn’t prescribe what it is that drives behaviour. Drivers of behaviour can operate at the personal level like attitudes and beliefs, be driven by context triggers like a family and employment, or a combination of personal and contextual factors. When looking for and integrating customer insights into the business it is important not to be prescriptive of what types behaviour drivers are acceptable. Finally, while the definition uses the term ‘customer’, a customer can refer to buyers, users, distributors and stakeholders.
What makes a great customer insight?
When looking through your research it is relatively easy to come up with a large number of potential insights. What is needed is a way to select the best possible insights for helping you to create effective strategies. Three criteria I find effective are:
- Is it real? If an insight is going to affect strategy and have a chance of impacting behaviour it needs to be grounded in evidence. The quality of your insight rests on the quality of your evidence. In addition, having and sharing the evidence that the insight id based on will help to get others to adopt the insight into their decision making.
- Is it relevant? An effective insight needs to relate to your objectives and the customer behaviour you are trying affect. This also means that different insights are needed across the business and over time, the insight that drives acquisition may not be the same as the one that guides cross-selling or retention.
- Is it actionable? An insight needs to help you achieve your goals. If the insight does not explain why the market behaves like it does in a way that you can affect then you need a different insight or rethink what tools you have to affect demand.
In the past, I’ve worked on a number of brands where ‘inspiring’ was used as an important criterion in choosing insights for campaign development and new product development. I feel this is a mistake for several reasons. First, what inspires one person may not inspire another and vice versa, making ‘inspiring’ an unreliable criteria where we try and second guess what would inspire others. Second, looking for an inspiring insight can lead us to ignore powerful insights because they are familiar. Turning insights into something inspirational is, as one client and Marketing Director in an FMCG put it, is the creative challenge. Changing how we word an insight may be what is required to help inspire others rather than dismiss the insight itself.
Where do you use customer insights?
In short, at each and every point where business activity can affect the behaviour of each and every type of customer, stakeholder, and distribution channel.
Unless your business has a very simple model, you are likely to have many areas of customer engagement and many different types of customers. By understanding the insights that drive a particular customer group, we are also better able to resolve differences that were previously seen as intractable, such as the conflict between customer acquisition and retention.
Where you want to use insights will help determine the type of insight you need. Listed below is a framework for general types of insights that moves from specific context-dependent to broad context-independent types of insights.
- Engagement Insight. This is the most specific insight level. It explains what drives behaviour in relation to a specific point of engagement, such how much of credit card bill is paid, giving to charity when approached in a public place, or choosing to re-enrol in a course.
- Brand Insight. Why choose your brand over another? This type of insight is a brand insight. It tells us what things or situations will lead us to create a preference or choose a specific brand.
- Category Insight. Operating across brands are category insights. These are insights that relate to why people buy into the category and their behaviour. For example, what drives interest in using pain relievers, saving money, baking with packet mix and not raw ingredients?
- Human Insight. These are insights that are independent of any brand or category, operating at a cultural level or are a universal. Because these insights are so broad, care is needed to frame them to make the relevant and actionable. An example of a human insight is that people are motivated by the desire for meaning in what they do this might be framed at the engagement level around the need for understanding why a stage is needed in their journey of completing a document.
Understanding what behaviour you are trying to influence helps to determine what type of insight you need. While the above framework is framed in respects to customer behaviour the same general framework can also be applied to different stakeholder groups.
What does a customer insight look like?
Reflecting the broad range of situations and customer types, there is no universal formula. As a guide when writing them for strategy plans and creative briefs, it is a good starting point to write the insight in a cause – consequence – understanding framework from the customer’s perspective in the first person: When X happens I do Y why because of Z. Emotional reactions can be inserted as part of the consequence or as part of the customer’s understanding of why they reacted as they did. Although this is written as a conscious stream, for the customer it may operate automatically like System 1 process popularized by Daniel Kahneman in his book ‘Thinking, Fast and Slow’.
An example of an insight using the first person consumer perspective approach is one I’ve worked with on cold sores. Based on research that showed people were embarrassed, avoided social situations and tried to hide their cold sores the insight we used was “When I get a cold sore on my face it feels like a beacon of embarrassment so that I want to hide away until it is gone”. This insight gives a clear understanding of the problem context (cold sore on the face), how the person felt (embarrassed), and the behavioural consequence (social avoidance). This insight is clearly shown in an earlier Zovirax commercial. Click the link to watch the video.
How do you find customer insights?
Writing an insight in the consumer’s voice does not mean that an insight is something a customer would actually say. Many insights relating to our behaviour are not things we are consciously aware, able to express or even willing to mention. This means that finding insights requires looking beyond the voice of the customer reports and interview transcripts.
A technique that can help you find insights once you have identified the behaviour you are most interested in affecting, focus in on the specific behaviour you want to change and ask ‘Why does this happen?’ and then keep asking ‘Why?’ until you have built a model at fine enough detail to give you the insights you need. This is a similar approach to root cause analysis and Socratic questioning. A good understanding of consumer behaviour theory, however, will greatly increase your chances of uncovering a real, relevant and actionable insight.
“Discovery is seeing what everybody else has seen, and thinking what nobody else has thought”. Albert Szent-Györgyi, Nobel laureate (Medicine)
Becoming a customer-centric business is about making implementing strategies and activities that improve customer experience and the value customers get from engaging with your business. To do this requires not just research but an understanding of what drives and shapes customer behaviour. This understanding is consumer insight. Having this insight readily available to those who make and implement strategies that affect customers is critical in creating and maintaining a customer-centric business.