Companies Rate the Best Customer Insight Strategies
- 57% of businesses ramped up investment in customer insight in recent years.
- The top three most effective research methods for analyzing consumer insights: (1) Tracking real-time customer website behavior (2) Analyzing reviews of products and services, and (3) Interviewing customers.
- “Conducting customer surveys” was ranked as the most common method for gaining customer insight, but came in fifth when ranked by effectiveness.
- Researching keywords and search trends was the most effective method for companies who judge the effectiveness of consumer insight by its impact on profit.
In the past decade, innovators have invented a dizzying array of new tools and strategies to allow companies to learn more about their customers. However, according to the results of our latest survey, more than 1 in 3 companies find it more difficult to understand their customers now than in previous years. Many factors, such as the increasing cost of customer acquisition strategies, could be contributing to this phenomenon.
To get the scoop on the tools and methods companies are employing to better understand customer habits, we asked 696 customer insight specialists to provide their thoughts on the issue. We specifically asked about the difficulties of gathering customer information in today’s world, the most common methods used, and the effectiveness of these methods according to a variety of different metrics.
Confidence in Customer Insight
Three-quarters of customer insight specialists said they were “very” or “extremely” confident in their business’s knowledge of its customers. This confidence is due in no small part to the emphasis the majority of companies place on gathering customer insight.
Business size had a noticeable impact on the amount of emphasis placed on gathering customer knowledge. Midsize and small businesses tended to emphasize customer insights slightly less than micro and large businesses and were also less confident in their customer knowledge. Businesses that are struggling with customer insight should remember that understanding customers goes beyond merely collecting information: It’s crucial to be able to analyze it effectively too.
Despite the number of customer tracking tools available to businesses today, 36% of the insight specialists we surveyed admitted that understanding customer habits has become increasingly challenging. However, a corresponding increase in resources devoted to the effort is paying dividends: 75% of respondents said they’d expanded their customer knowledge over the last few years.
Small businesses stood apart from other size categories in reporting that collecting customer data had actually become less challenging over the past few years. One reason may be an increase in the presence and accessibility of online tools that make gathering and analyzing information more efficient, especially with the continued development of AI-powered analytics.
Research That Works
For companies to effectively compete in 2022 and beyond, customer data is a must-have.Well over half (57%) of respondents said their business was currently devoting more resources to customer data collection than in previous years. Only a tiny percentage (3%) said they were allocating less than before.
Conducting customer surveys was the most common method used to better understand client behavior, with 44% of insight specialists implementing this strategy. Analyzing customer reviews followed close behind, being used by 42% of respondents.
Surprisingly, the data showed that many midsize companies (50–249 employees) struggle to track customer activity on their websites. Free tools such as Google Analytics provide tons of information once users learn to gather and evaluate the data. And, for companies that feel overwhelmed by mountains of statistics, there are ways to automate the data analysis process using the latest AI tools.
For companies looking to implement new and more effective ways of gathering customer insight, tracking the real-time behavior of customers on their website is a good starting point. Two-thirds of respondents indicated that this was the most effective method employed by their company in 2021.
Other specialist-approved methods of gaining customer insight included direct interviews and social media interaction. Additionally, over half of respondents said that holding events was an effective strategy for gaining customer insight. For example, retailers that specialize in kitchen gadgets and cookware might invite customers to an in-store cooking demonstration or class. Allowing end-users to see and use products for themselves enables sales and marketing professionals to evaluate their reactions and even gain valuable feedback on improving product design.
Insight specialists use specific strategies to achieve different objectives, such as increasing customer satisfaction levels, profit margins, and conversion rates. Reading syndicated third-party research was mentioned by respondents as an effective strategy and one many companies have adopted. However, third-party research proved to be the least effective strategy for most measurements when determining key metrics. Conversely, analyzing product and service reviews, conducting keyword research, and tracking real-time customer website behavior were the most successful approaches.
Unsupervised Makes Life Easier
In the highly competitive world of online marketing, using the right tools goes a long way toward attracting new and profitable customers. Once information has been compiled, understanding its meaning can be challenging. Having access to the proper tools makes collecting and analyzing data much more straightforward. Unsupervised uses AI to uncover hard-to-find insights from all types of data, allowing company executives to identify offerings that lead to a higher return on investment.
Methodology and Limitations
Data used in this analysis came from a survey of 696 business owners and employees who were directly involved in customer data strategies, with a 4% margin of error at a 95% confidence level. Business owners comprised 119 of the 696 respondents, and the remaining 577 were employees.
Samples of respondents by business size were as follows:
- Large (250 or more employees): 198
- Midsize (50 to 249 employees): 261
- Small (5 to 49 employees): 132
- Micro (1 to 4 employees): 105
To help ensure data quality, all respondents were required to identify and correctly answer an attention-check question. Please note that survey data may be subject to certain limitations related to self-reporting.
Fair Use Statement
Companies that understand their customers provide a higher level of service. To give your readers the same, feel free to share the insights from this survey for any noncommercial purposes. We have one simple request: When you share, please link back to this article to provide the appropriate credit.