The 4 Main Aspects of Customer Insights and Why it's Important for E-Commerce
Consumers are overwhelmed with choice in today's eCommerce landscape. The pandemic especially has resulted in the number of Shopify stores, for example, increasing exponentially.
So competition is fierce for any eCommerce store. Competitors are only the touch of a button away and ads are running across every channel. How do you make sure you make sure yours is the one that makes the consumer click?
The main thing that sets eCommerce stores apart is tuning in to their customers.
By tuning in to your customers and talking to them, you learn from them. This allows you to create an ever-improving experience that will deliver results.
But tuning in to your customers can be different. Traditionally eCommerce stores largely rely on quantitative data based on complex analytics. This leaves a lot up to inference and doesn’t let you truly listen to your customers.
E-Commerce stores with access to quality data that allows them to truly understand their customers thoughts and opinions will make them more likely to gain actionable customer insights that can make a meaningful difference.
What Are Consumer Insights?
A consumer insight is a way of businesses interpreting data to get a better understanding of how their customers think and feel. This includes far more than just what the consumer is looking for and goes deeper to understand their motivations for buying and their feeling about their shopping experience.
Consumer insights that have been conducted effectively can lead to many benefits of how eCommerce stores communicate with their customers, both on their website and through marketing. Consumer insights can help businesses make changes which can change customer behaviours, drive customer loyalty and retention, attract a higher caliber of customers and increase margins.
The reason why so many eCommerce businesses struggle in collecting effective customer insights is because of the challenges associated with collecting and analysing these insights.
The 4 Main Aspects of Collecting & Utilising Customer Insights
1. Good Data Quality
This is the most important thing to consider. Bad data quality makes all the following points redundant, no matter how well you have them in place.
Good data quality involves data that is:
Accurate: For whatever data described, it needs to be accurate
Relevant: The data should meet the requirements of its intended purpose
Complete: The data should not have missing values or miss data records
Timely: The data should be up to date
Consistent: The data should have the same format and be able to be then cross referenced with the same results
2. An Analytics Team
Analytics already plays such a crucial role in optimising eCommerce stores. Everything and anything regarding customer behaviour can be captured now and analysed. This data capture often leads to a series of A/B tests to improve the analytics and conversions.
The same approach should be taken with customer insights. Customer insights can let you understand more about your target customers. The weakness with traditional eCommerce analytics is that all the data is based on past results, but what if you are using these past results to optimise a channel that isn’t optimal for your business?
Customer analytics can help inform you of any gaps you may have in your current strategy. Once the gaps have been identified, new channels can be experimented with based on the results and the same A/B tests implemented to optimise the outcome.
3. Consumer Research
Consumer research helps you get beneath the surface level of ‘why someone buys’ and lets you look into the emotions and underpinnings of consumer behaviour.
All eCommerce storers of any decent size should be segmenting their audience. E-Commerce stores often create a ‘buyer persona’, but, in reality there is often more than one type of person that is a customer on your website and you should be looking to capture as many different ‘buyer personas’ as possible.
You may run a lingerie eCommerce store and assume all of your customers are female and within a certain age range. But, do you consider that 20% of your customers may actually be Men purchasing lingerie for their girlfriends?
Understanding the demographics and purchase intentions of your customers can unlock segmenting capabilities that can make the ROI of your digital marketing increase considerably. You can learn more about purchase intent here.
The Benefits Customer Insights Can Bring To Your E-Commerce Store
E-Commerce stores are all too familiar with looking into the ‘what’ behind their customers. What channels are most effective in driving traffic? What copy is most effective in increasing website visit time? What audiences are best to target to increase conversions? What promotions are most effective?
The list can go on and on.
Customer analytics goes beyond the ‘what’ and asks the ‘why’ behind customer behaviour. It looks at the reasons behind what is happening. This added data (in conjunction with quantitative data that tells the ‘what’) can help eCommerce store’s identify both what it needs to change and why it is important. It works best when it is aimed at specific goals such as improving customer retention or increasing funnel conversion rates.
So, what kinds of tangible business outcomes can be achieved through customer insights?
Personalise Your Marketing
We previously talked about the importance of segmentation in gathering customer insights. Well, the benefit this segmentation can bring is to allow your store to optimise your digital marketing through personalisation. You can read more on why personalisation is important for eCommerce brands here.
There are many ways to use customer insights to help segment the way in which you personalise your marketing efforts, but, the most effective way is to combine customer insights with demographic insights.
For example, you may be a Health store primarily selling supplements and ask your customer ‘why are you looking for supplements’? The results may tell you that younger males are using them to subsidise a poor diet. It may show that older women are using them to get a better night's sleep. You may find that middle aged men are using them to fight fatigue.
Once you have these answers you are able to create personal messaging to each segment in your marketing material and are therefore attracting a much higher calibre customer through your marketing. This is because your ads aren’t generic and are specific to a customer pain point meaning when someone clicks on your ad they are likely someone with a higher purchase intent.
Improve The Customer Journey
Customer journeys involve a lot of parts and these parts fit together to (hopefully) lead to a purchase and later subsequent purchases. But, just one flawed part along the customer journey can significantly impact sales.
But, how do you know what part is the weak link? As mentioned earlier this is usually due to a series of A/B tests which may only be telling part of the story.
Instead, use customer insights to find out from your customers first hand what part of their customer journey did they feel a bit let down with. Then you can later ask ways to improve this part.
Analyse The Wider Competition
With eCommerce’s fierce competitive landscape, why not make most of the competition? Larger eCommerce businesses may have conducted customer insight analysis and made it publicly available. It may not be totally relevant to your audience but you can surely learn from it.
Alternatively, Bazar offers a consumer insights platform that allows our partners to view how their survey results differ from other retailers within their industry. These insights can help you explore new avenues or improve on your current avenues.
How Your E-Commerce Store Can Get Started With Customer Insights
We only touched upon some of the ways in which customer insights can positively impact your business. In reality, customer insights can help inform almost all aspects of an eCommerce store whether it be social media, content, marketing, website and everything in between.
Despite all the benefits many eCommerce stores are neglecting customer insights. In reality, it’s difficult to know where to start.
Follow this 4 step plan to get started on your customer insights journey today:
Establish Your Goals - Before getting stuck into research you want to really have a clear idea of what the goal of the research is. Essentially, what do you want to learn about your customers? Better yet, what business impact do you want what you learn about your customers to achieve?
Identify Your Assets - Before jumping into trying to gather customer insights, make sure you have the relevant resources in place first. Perhaps software to help store and analyse the data, methods to obtain the data and enough staff time and expertise to collect and make sense of the data.
Establish a Data Collection Strategy - How are you going to obtain the data? This is a very important step. You will need to consider whether you want a specific type of person for the data, whether it's from your customers or a wider audience. Different methods for collecting the data could be considered such as surveys/focus groups/interviews.
Bazar allows for a great way to approach this step. Use our tool to survey your current and future customers.
Set Data Goals - You previously established your goals, now you need to figure out how the data at hand can help you achieve those goals.
So even though getting customer insights might seem like a bit of a daunting task and it lies outside your traditional analytics ‘comfort zone’, the best route forward is to just take the leap and get into it.
As an eCommerce store you will find that finding answers to the ‘why’ through customer insights will add a lot more value than just knowing the ‘what’ through traditional analytics. The results and pay-offs can be immense.
Learn about bazar’s customer insights tool here.