Customer input is to a company. Once a company has this information, what do they do with it?

In this article, you will learn how to use that information to improve relations with your existing customers, and to gain new customers.

What are customer insights?

Customer insights are a company's understanding of their customers and the market that serves them.

Let's use an example.

You call AT&T because of a problem with your bill. Before you are connected to a representative, you are asked whether or not you will participate in a short survey after the call. You are in no rush, so you click yes. The survey asks five questions about the customer service experience with AT&T.

The marketing department at AT&T will gather the results of all of these calls and determine what areas are lacking, and which ones are succeeding.

They will use all this data to come to a conclusion, and then present their findings to AT&T management. Then, management will make a decision on how to better meet the needs of their customers.

This is an example of customer insights.

Now, what is the first step to assessing this marketing information?

The marketing department must do market research to determine which information would best help the company.

Marketing Research

Marketing research is the design and collection of data that is relevant and valuable to the marketing situation. In order to accomplish this, the research must:

A. Define the problem.

B. Decide how to develop the plan for collecting the information.

C. Implement the plan, then analyze the data.

D. Report the findings.

A. Define the problem.

This may sound obvious, but before the marketer can start a marketing program, he must know what problem he is seeking to fix.

Examples of these problems could be the following:

• A clothing line that is very expensive, because it is hand made, using the best materials, is not selling.

• An accounting firm has lost 25 percent of its tax season business.

• A dance studio with many different classes notices its ballet classes are rarely filled.

• A major automotive company wants to sell a hybrid car to a market that has low gas prices.

So, the problem has been identified, what is next?

The marketer will do preliminary research to determine any trends that might immediately stick out.

This research would involve market research to attempt to find the problems, and suggest ways to fix them. This method assumes the marketer has an idea why the business is having problems.

Next, the marketer would do descriptive research to delve into more details about the failures of the business. This type of research requires the market research to delve deeper in the wants and needs of the customer, such as demographics and economic situations.

Lastly, the marketer would do casual research, which would give the marketer a chance to test whether the changes made during the first two research methods worked.

Key Terms

Preliminary Research

Descriptive Research

Casual Research

B. Decide how to develop the plan for collecting the information.

Once the marketers have identified the problem, and have decided how they will collect that information, it is time to develop a research plan. The marketers must determine the exact information needed, and devise a way to gather this information efficiently.

There are two types of data that can be collected, primary and secondary data.

Primary data is the most valuable, and also the most extensive. Examples of primary data are:

1. Contacting your customers by the following methods: mail, phone, online, or in person. This can be done with surveys, mailings, or interviews.

2. Doing market research to observe customers, such as in a focus group. A focus group would enable the marketers to observe their customers, to survey them, and to use experimental practices on them. Ideally, a company would have several focus groups so they can contrast and compare the groups.

3. Sample existing customers and potential customers. To do this, a marketer would survey a sample of the public that hits the company's demographics. Before a marketer uses this approach, they would have to choose a sample size, and how to approach the group.

Secondary data is easier to collect, although it is less valuable. This is information gathered from a company's own database, or a national database available to any company. However, this is often the best place to start for a small company or sole-proprietor, as it is much less costly than primary data. If the secondary data is not sufficient, the business owner can look into primary data methods.

Key Terms

Primary Data

Secondary Data

C. Implement the plan, then analyze the data.

Once a marketer has decided how to gather information, it is time to implement the plan. This normally takes a few months, if not longer. It is not a process that can be rushed, since rushing the customer would leave a bad taste in their mouth.

Once the plan has been implemented, it is time to analyze the data, which is the most important part.

Once all of the findings have been collected and analyzed, the marketers can draw their conclusions, and determine the next step to take.

There are two types of methods to analyze data: descriptive and inferential data analysis.

A marketer using descriptive analysis would report his findings using graphs and charts, which would be easy to understand for the intended audience.

Inferential analysis is more detailed than descriptive analysis. For this type of analysis, the marketer would use the data collected to make determinations about the detailed information that was gathered.

Such analysis would include forecasts based on the information collected as well as comparing focus groups to detail any large differences in how group members responded to a question.

Key Terms

Descriptive Analysis

Inferential Analysis

Using inferential data is crucial to getting advanced insights and usable information. To successfully use this type of data, the marketer must have a well-detailed research plan that follows a scientific method of data collection.

Here is an example of inferential data collection.

A large automotive company wants to find out if a certain car will sell in American, Asian and European markets. The marketer will survey each group thoroughly to get their thoughts, using a scale of 1 to 10. Then, the marketer can use the data collected in a statistical program to analyze the differences between each market. This type of analysis would give he company much better data than simple descriptive data which would only give them graphs and charts to see the information. Inferential data provides far more detailed information.

D. Report the findings.

The final step is to report the findings, and work with management to draw any conclusions, and suggest solutions to the repair the problem. The marketer would present their findings to management, as a formal marketing plan.

Since straight data can be difficult to understand; the marketer would summarize the plan in an easy to understand fashion. This is especially the case with a very large or complex set of data.

A thorough research plan must ensure the marketing team has considered all aspects of the problem, and did appropriate research to solve the problem.

What will management do with the marketing plan?

That depends. Sometimes they don't value the data, or dismiss it.

Management often doesn't understand the value of data collection, and only see it as a way to fact-find. This is why it is imperative the marketing team use data in such a way that management will understand and value the information received.

Or, management doesn't take market research and data collection seriously, and hires inept or poorly qualified researchers. If management gets poor data, they are less likely to trust good data in the future. This is why it is key for companies to spend the money required to get good data the first time around. Good researchers cost time and money, but in the end, they are worth it.

The best way to have management take a marketing proposal seriously is to use well experienced researchers who know how to collect and analyze data, as well as be able to express findings in a way that is easy to understand.

Outside of market research, what are other ways to assess marketing information? Or, if you are a smaller company, and want to know how to better market to your customers, what should you do?

Here are three ideas for the smaller company:

1. Attend Trade Shows

Attending trade shows is a great way to meet potential customers, as well as watch what your competition is doing. Look at how your competitors interact with customers, and gain information from that and use it in the future.

2. Empathy Interviews

When interviewing potential customers, most businesses use the typical Q&A method. They ask boring questions that might not garner a truthful response. Instead, have the interviewer try to get the interviewee to open up to them. You want to get the customer to speak from the heart and trust the interviewer. It is a much better way to get honest answers.

3. Check Out Your Competition

Watching what your competitors do is a great way to assess your own business practices. If given the opportunity to watch your competitors in their natural setting, take the opportunity. For example, if you are a small clothing store, visit other small clothing stores and look at their business practices. Watch how they interact with customers.

Gaining customer insights is key to any marketer. Without this information, you do not know your customers, and therefore, are unable to meet their needs and wants.

Remember these key takeaways:

1. Define the problem – Should the marketer use preliminary research, descriptive research, or casual research?

2. Decide how to develop the marketing plan – Should the marketer use primary or secondary data?

3. Implement the plan and analyze the data – Should the marketer use descriptive analysis or inferential analysis?

For the marketer, it is important to understand why consumers make the purchases they make. They also must know which factors influence a purchase, and whether there are any factors that are contributing to the purchase.

Marketing has one ultimate goal. That goal is to reach the consumers and find a way to influence their buying decisions. This is why companies that sell televisions have their products on display, showing the highest quality high-definition pictures. When you shop for makeup at Sephora, you can sample any of their makeup products. By being able to use the product and test it out, you are more likely to buy.

It's why Amazon has product recommendations when you login to their site. They know you have logged in for a reason, and are probably ready to buy. They keep your browsing history, and use that to suggest products to you.

And it famously was the reason soap company Proctor and Gamble produced daily television shows and called them "Soap Operas."

The goal of marketers has always been to find these moments when the consumer is open to influence.

In this article, we will discuss:

1. Consumer Markets

2. Consumer Buyer Behavior

3. Consumer Decision Making

Consumer Markets

Consumer markets are the marketplaces in which all goods and services are sold to the general consumer. Every item you buy belongs to a specific consumer market group.

There are four types of consumer markets

1. Consumer Products

2. Food and Beverage

3. Retail Products

4. Transportation Products

Consumer Products

This market includes all consumer durables, such as electronics, appliances, furniture, jewelry, and clothing.

In this market, a marketer must be aggressive, because consumers shift between brands and lack loyalty to a particular brand. This is a very competitive market, with sellers competing for the business of the consumer. The sellers are constantly looking for new ways to sell to these consumers, and if they don't remain competitive, they will lose business and market share.

Food and Beverage

This market includes all food, drinks, dairy products, meat, alcohol, and packaged food products. This is a growing market since consumer tastes are always changing. This is a market where companies seek brand loyalty, as it helps grow the company's market share.

Retail Products

The retail consumer market consists of supermarkets, big-box stores, department stores, outlets, franchises, and specialty stores.

This is an emerging consumer market with new business opportunities at every turn. For example, Walmart is now in many small towns and suburbs. These types of stores usually have low profit margins, so they make it up with volume. These types of stores must provide a good value for customers, and then they will remain loyal to the brand, and continue to shop at that store.

Transportation Products

This type of consumer market includes postal, courier, and logistical services.

This market is dominated by mostly large companies, such as the U.S.Postal Service, FedEx, and UPS. These companies require brand name and recognition, and a very strong network. With the addition of technology, new opportunities are opening up for this market.

Key Terms!

The Four Types Of Consumer Markets

Consumer products

Food and beverage

Retail Products

Transportation Products

Consumer Buyer Behavior

The type of consumer buying behavior is determined by:

The level of involvement in the buying decision. The amount of importance the buyer places on the product.

The buyers' level of involvement determines why they want to find out about certain products and/or brands, while ignoring all others.

High involvement purchases are those that a consumer does not take lightly. Examples are cars, luxury items, jewelry, electronics, etc. The higher the risk, the higher the level of involvement. There are three types of risks taken with high involvement purchases. They are:

1. Personal risk

2. Social risk

3. Economic risk

There are four types of consumer buying behavior. They are:

1. Routine Response/Programmed Behavior – These are the purchases you make without thinking. These purchases include routine items such as milk, groceries, paper products, etc.

2. Limited Decision Making – These are the purchases where you might do some research. These are items you don't buy routinely, maybe only shopping for them once a month or every other month. Examples of this kind of item would be clothing or shoes.

3. Extensive Decision Making – These are the purchases that are infrequent, and might have a high degree of risk. Examples are cars, computers, or homes. You will generally spend a lot of time making these decisions. You will get advice from friends and family before making these purchases. For these purchases you will go through all five steps of the consumer buying process.

4. Impulse Buying – These are the purchases you make without thinking. Perhaps when you are checking out you purchase a candy bar or a pack of gum.

Not everyone experiences the same buying behavior for a product. Someone who is rich will have a different behavior when going out to dinner than a low-income person would.

The low-income buyer would have a higher involvement in the purchase process since they have to be more careful with money.

Decision Making

What makes you purchase something? When you purchase a laptop, why did you buy that particular laptop? Was it because of the brand? Or was it because of the price, or the features the laptop has?

Did anyone help you purchase the laptop, or give you advice or ideas about the type of laptop to buy?

Did you see an ad in the newspaper for the laptop?

Consumers are always changing their buying behavior, which changes with their life circumstances.

The consumer decision-making process involves five steps that consumers use when deciding to purchase a good or service. A good marketer understands these steps and uses them as a part of their marketing strategies. Knowing these steps allows the marketer to bridge the consumer and the product to close the sale.

There are five steps to the consumer decision-making process.

Step 1. Need Recognition

Step 2. Search for Information

Step 3. Product Evaluation

Step 4. Product Choice and Purchase

Step 5. Post-purchase Use and Evaluation

Step 1. Need Recognition

This is the most important step in the buying process. A customer must have a need -- otherwise there is no purchase. The need recognition occurs between the consumer's current situation, and their desired situation.

For example, assume you are invited on a last-minute camping trip and you need to buy a sleeping bag. A company that sells sleeping bags might have a low-cost bag meant for just this opportunity.

Marketers also try to convince people they need things when they actually don't. For instance, have you ever watched the previews played before a movie? Ever notice that a movie you would never think you'd want to see suddenly seems interesting? That's great marketing.

Step 2. Search for Information

Let's say you need that sleeping bag for your camping trip, but have a few days to make your purchase. You are familiar with some brands, and do some research on forums that discuss sleeping bags. This is great for a company that owns the brand you are interested in, and most companies strive for this.

If you need more information about sleeping bags, you will continue to search for information. You might ask any friends or family who are campers. You might read online reviews, or the reviews at large online sellers like Amazon.com or Walmart.com. Consumers leave the reviews on these sites, so you are more likely to trust them.

Step 3. Product Evaluation

There are thousands of sleeping bags available in the market and there is no way you can evaluate them all. Good salesmen are aware that too many choices can be overwhelming, so they only give you a few choices to choose from. At this point, you use evaluative criteria to narrow down the choices.

This evaluative criteria includes the price, the size, how warm the bag keeps you, as well as the color. Some of these features are more important than others. For example, if you are camping in a cold location, you will want a sleeping bag that can keep you warm enough.

Step 4. Product Choice and Purchase

This is the step where you buy the sleeping bag. However, you may not have decided where to buy the bag, as some stores are more expensive than others. Or if you have time, you may decide to buy the bag online.

Step 5. Post-Purchase Use and Evaluation

This is when you determine whether the sleeping bag was a good purchase. You go on your camping trip, and the sleeping bag doesn't keep you warm. Since you are unhappy, you will have what is called post-purchase dissonance, otherwise known as buyer's remorse. You are unhappy about your purchase. You wish you had done more research, or shopped at additional stores. This is never good for sellers.

In addition to the above five steps, many marketers believe that how a product is disposed of is an important part of the buying process. There was a time when manufacturers didn't care how a product was disposed of. But in this day and age, consumers care about the environment.

Items such as batteries are dangerous for landfills, as are computer parts and used oil. Consumers care about properly disposing of dangerous items, and companies are becoming more aware of this by the day.

For example, think of Keurig coffee makers. When the coffee makers first debuted, they were an enormous hit. Never has making coffee been so convenient. You can choose any type of coffee you want! And your spouse can have a different flavor! The Keurig coffee pods were an enormous hit and sold like crazy. As of the beginning of 2015, one in three homes have a Keurig coffee maker. In 2014, there were over 9 billion coffee pods sold. That is billion, with a B.

However, soon consumers realized that the coffee pods were neither recyclable nor biodegradable. And landfills were filling with the little plastic cups. People soon stopped buying the pods, or began using a refillable pod. Keurig has promised the public they will invent a recyclable pod, but that isn't until 2020. In the meantime, sales of pods have decreased considerably.

Some companies plan to make their products obsolete after new products come out. Many people believe Apple is guilty of this practice, as new iPhones often have features that older iPhones do not have.

Family Decision Making

Members of a family often have different roles when deciding on a purchase. Some of the family members are theinformation gatherers, who find the information about the product. Because these people do all the research, they have a lot of power when it comes time to make a purchase decision.

The influencer in the family doesn't have the power to choose the product to purchase, but they make their wishes known and can cause issues if not listened to. Imagine a child who doesn't get their way.

The decision maker has the ability to decide on whether or not to buy, which product to buy, which brand to buy, where to buy it, and when to buy it. The decision maker is not necessarily the same as the purchaser.

Key Terms!

The five steps of the buying process

Need Recognition

Search for Information

Product Evaluation

Product Choice and Purchase