Customer Insights: Beyond the Jargon

Having a clear definition of Customer Insights will help businesses unleash the potential power of Customer Experience research.

Customer Insights. They are quickly becoming one of those buzzwords that all self-respecting sales and marketing departments need to be seen adding to their budget. The speed of their popularity increase has led to insights becoming an amorphous, murky concept that not many people fully understand. The combination of a broad definition and the overuse of the phrase leaves insights open to abuse. Unsurprisingly, Business is getting sceptical. And rightly so. Between 2013-14, business satisfaction with analytics went down by 21%.

Yet it doesn’t have to be this way. Well-produced insights can genuinely transform the way you do business. And, according to Nemertes Research, business leaders understand its potential as the most transformative of future business practices. We all just need to know

how to tap their potential. As with any nascent buzzword, the general understanding of insights is fuzzy. Having a clear understanding of what customer insights actually are is a great place to start in understanding their value.


Capturing a Meaning

A quick google search will show you that there are almost as many definitions of Customer Insight as practitioners in the field. And frankly, they only seem to be adding to the confusion with their vague descriptions, jargon and attempts to capture a broad meaning.


Here are just a few:

“A non-obvious understanding about your customers, which if acted upon, has the potential to change their behaviour for mutual benefit.” Customer Insight Leader


”We believe customer insights come from data and tells you something new and potentially actionable about your customers and markets.” CIG


“An interpretation of trends in human behaviors which aims to increase the effectiveness of a product or service for the consumer, as well as increase sales for mutual benefit.” Wikipedia


See what I mean?

To avoid falling into the same trap, let’s start with an extremely rudimentary definition of our own. From there we can explore the specifics in more detail. So, here we go:


“Customer insights are new, useful knowledge about your customer.”


Simple enough? Now let’s have a look at what I think are the three most important characteristics of well-produced insights that make them so valuable: (i) they’re more than just data, (ii) they’re useful, and (iii) they produce new knowledge.


More than Customer Data

Insights are built on data. Yet data are just a random jumble of facts, numbers and observations. Even if they are collected and processed into a more user-friendly dataset, it is still not an insight. At best it’s just information. Because it would be impossible to collect data on every element of you customer’s world, data is collected on a small customer segment. These data are analysed to find patterns of behaviour and thought that can be generalised across the entire customer base. It is these analysed, generalisablepatterns that make up the insights.


Making it Useful

Insights need to tell you something that can help you improve your product for your customer. There are two important points related to this. Firstly, insights need to address a concern. This may be a broad concern such as increasing ROI or a more specific concern like creating a new advertising video. Secondly, they need to be presented in a useful way. If the analysis of the data has not been presented in a way that will guide, explain and inform decision-making then it has no value. For insights to be useful, they need to be actionable, meaning everyone needs to understand how they can help improve the business.


Keep it Interesting

Finally, insights need to tell you something new about your customer. This seems like a fairly obvious point, but I think it needs reinforcing. A practitioner may have produced the most detailed, insightful analysis of your customer experience but if you already know what they’re telling you, what’s the point? To ensure insights are interesting, it is important that there is a dialogue between the CX practitioner and the end-user (i.e. the business). The end-user needs to communicate what they already know so that the practitioner makes sure they focus on finding something new about the customer.

Making your business customer-driven is becoming more important than ever and, there are thousands of consultancy firms out there promising to provide the insights to make it happen. If you’re not careful, the shiny consultancy promising to revolutionise your marketing strategy may just give you a load of well-packaged data, not tell you how to use it or simply not give you any new information. High quality customer insights are the opposite of this. Understanding what they are and how they can help your business will ensure you use them to their full potential.



Billy Jones

Behavioral Economic Analyst

No Comments

Post a Comment