Data-driven organizations grow at an average of 30% or more annually. But what does being “data-driven” mean? When people think about data, they often think about KPIs like customer acquisition cost (CAC), working capital, or even time to first response. The problem with those metrics is that they take the humanity out of business—they focus on your customers as commodities rather than people. Customer insights reverse that and put the attention back on the humanity of your customers.
Customer insights use the hard data of KPIs and merge them with behavioral insights within your product. They serve to provide clarity on exactly who your customers are and what their needs are.
When you combine the quantitative nature of data with the qualitative aspects of customer feedback, it enables you to hone your personas and improve customer experience. It also gives you a straightforward way to confirm any hypotheses you have about what your customers want. Let’s talk about how to do it!
Define what you want to understand
Of leading marketers, 95% believe that KPIs must relate to broader business goals to be meaningful. So, rather than just measuring the number, you need to understand your purpose, whether it’s increasing sales or boosting customer retention. To figure out where to look, define what it is you want to know.
Some examples of questions that might be useful, specifically for customer insights, are:
- Have sales numbers dropped for a particular customer group?
- Does your brand perception need an update?
- Do you want to define new user groups?
- Are you hoping to release a new product and want to understand your marketing reach?
- Do you want to understand more of an understanding of your customer landscape?
Consider what you hope to get out of your metrics, and then you’ll know where to look for insights and what information will be most useful. For instance, if you are looking at improving sales numbers for a specific group, you would start by narrowing your search to individuals that fall within that particular segment, rather than your entire customer base.
Collect your data
There are a few ways that you can collect customer data. Ultimately, a combination of all of them will yield the best results.
You probably already have several ways to ask for feedback from your customers. Net promoter scores, user interviews, and churn feedback are a few that many companies already have in place. Each of these is an excellent place to start to glean information for your customer insights.
Don’t be afraid to ask for interviews with your customers if you feel like there’s the potential to get more useful information. Like a good therapist, skilled interviewers can get a ton of details about how a customer feels and perceives the product. If you interview well, you have the potential to show your customers that you deeply care about them, and also learn more about how they experience the world.
Do you currently send surveys around customer satisfaction, customer effort score, or follow your brand’s mentions on social media? If so, you already have your fingers partially on the pulse of customer sentiment. Knowing how your customers feel about your brand and services is a great way to qualify later customer insights.
For instance, you can measure the sentiment for people who use a specific part of your product, or who got a certain speed with their support responses. Knowing what levers you have to pull and push for customer experience will be valuable later on.
While both customer sentiment and customer feedback are useful, they depend on one fallible thing: human memories and opinions. Nothing will be as telling as the actual patterns that your users follow in your product or on your marketing site.
Any kind of hard numbers that you have around user behavior can be valuable. Information pulled from tools like Google Analytics, Heap, or Segment can be used to flesh out your customer journey map and better understand where your customers are coming or going from.
Finally, you can verify the analytics data by viewing what your users are doing on your platform. Following customers’ path to purchase and through menial in-product tasks can give you insight into their thought processes and motivations. It will also tell you where they are confident in your product and where they might have trouble. All of these are significant data points in the next step of the process.
Create personas and journey maps
Once you’ve defined the audiences you want to learn more about and collected all of the data around their experience, it’s time to create your frameworks. Marketing personas and customer journey maps help codify information so that everyone in your company can use them.
If you don’t understand who your audience is and what they want, you end up making decisions more slowly and potentially miss out on making the right call for your customers.
Creating and using more formulaic personas and maps supports everyone in your company knowing who your customers are, their priorities and motivations, and what challenges they experience with your product. That knowledge sets each team up to better cater to the customer experience and create a brand that your users will love.
Shift your strategies
When you’re going through the process of understanding what your customers want, you’ll often end up uncovering that you’ve focused on the wrong things. The method of gathering and understanding customer insights should be cyclical:
You discover information, develop a hypothesis around them, act on your theories, and then uncover more information. The benefit is that your learning is never over: you should always be putting your consumer insights to the test to find what truly resonates with your users.
For example, your company may root itself in the idea of money and frugality being the number one driver for your users. However, your research may show that your audience would pay a higher price for specific product features or quality. A great example of this was Ryan Air’s pivot after doing a deep dive into customer insights. They realized that customers cared more about more lenient baggage policies and flight change procedures than extremely cheap flights. They shifted their focus towards improving their business’s most critical aspects for their customers, rather than lowering their bottom line, and their operating profit grew by 40% and revenue increased by 16%.
Constantly challenge your company to push against your customers’ assumptions by regularly gut checking them against your real customer insights.
Make things better for everyone
Gathering and improving your customer insights makes for a much better experience for your customers. But it also gives your company more ground to stand on when making product decisions and conceptualizing new marketing strategies.
When you’re getting started, take time to define what you’re hoping to understand with improved customer insights. It can be tempting to say that you want to understand the customer experience holistically, but breaking it down into smaller portions will make it a more manageable and meaningful task to start. Once you know what you’re looking to learn, dive into the qualitative and quantitative data you have on hand about your customers.
Once you have the appropriate information, organize it into customer personas and journey maps. Formalizing this information makes it easier for everyone in your company to understand and use it to impact their part of the customer experience. For instance, your marketing team can better understand how to use their campaigns to support self-service customers, or your support team can better handle what goals your customers are trying to achieve.
When you work collectively, you can make quick pivots on strategy and continue to learn how to make your customers’ experiences excellent.
What’s one assumption you had about your customers that was recently challenged? Let us know in the comments!
Read more about how to take the next step and create a culture that deeply cares about customer insights on our blog.