‘Customer Insight’ is a phrase bandied about by many as the basis for any successful retailer. However, there is such a vast range of useful and not so useful insight that many are confused as to exactly what they should know about their customers and why.
Here at Leapfrogg, we believe that there are four types of insight that all retailers should have about their customers. When combined together, this set of insight gives a true picture of who their customers are, the shopping experience they desire and how much they are likely to spend.
Attitudinal insight refers to information about who your customers are and what they think. It covers all aspects of their socio economic status as well as personal values, attitudes, lifestyle etc. This type of insight helps you to form a picture about your customers; who they are, which types of marketing will most appeal to them, why they might buy your product and what their general attitude will be to you as a brand.
This insight helps retailers and brands understand how to engage with their customers and give them the emotional experience they want.
Transactional insight is the understanding of what your customers buy from you, how much they spend and how often. This data gives you a single customer view across multiple channels, the lifetime value of each customer and enables you to segment them accordingly. Being able to group your customers into value based segments allows you to work out how much you can spend to acquire them, how much to retain them and it enables you to tailor your marketing to specific segments (e.g. rewards for high spenders). If you have enough historical data, it also allows you to start to predict the potential spend of each segment in the future allowing far smarter marketing budgeting and spend.
This insight tells you how your customers are behaving and engaging with you right now. How many visit your website? What they do there before purchasing? Who is visiting your store and what are they doing in there? How many people buy from your catalogue etc? This actionable insight helps you to understand the impact of changes you make to your business and are crucial in fine tuning your successes by making improvements and tracking their success.
The last pillar of insight comes directly from your customers themselves in the form of feedback. This comes in the form of solicited (i.e. surveys) and unsolicited (i.e. via social media). Ask them what they think, value their opinion and make changes on the back of it. Those retailers who really engage directly with their customers are those that gain loyalty and a true picture of what works for their customers and what doesn’t!
Each of the above types of insight gives valuable information on their own, however it is when a retailer or brand takes the time to combine and understand the insight as a whole that the magic happens.
Using the above insight means that the focus of the customer becomes central to all operations. The retailer is able to really provide the perfect experience for each key type of customer at each stage of their buying journey with confidence of the outcome of any investment made to do so.
A retailer that places the customer at the heart of their business is the retailer who acquires and retains more of the RIGHT customers than its competitors, leading to higher profit margins and market share.