Understanding your consumers’ wants and needs is essential for running a successful business. Consumer insights are the key to understanding what drives consumer behavior.
A company should understand its customers to better market and sell its products, services, or ideas. For example, if a company discovers that many of its customers purchase products online, it may wish to focus on becoming a more prominent online retailer. Additionally, companies can use consumer insights to help determine pricing structures and layouts for retail locations by using information about how different populations prefer shopping. Here is a list of the importance of consumer insights to a company:
Marketing is all about selling a product or service to a consumer. For example, suppose a company learns that most of its consumers are women interested in beauty products and make-up. In that case, they may decide to market their products to women and target marketing toward women.
2. Product Development and Pricing
Understanding what consumers want can help companies develop new products or determine how to price for the general public by using surveys of potential customers. In addition, companies can use demographics such as age range and sex to determine the best customers to targets, such as men that are over 35 years old or women who are between 18-24 years old.
3. Product Sales
Using customer insight to understand the customers’ needs helps companies decide how to market their products most effectively. Companies can also use customer insights to help determine the most reliable sales channels and distribution routes, such as direct mail, online advertising, or advertisements on television. Knowing the best way to reach consumers can help save money and effort by cutting out inefficient marketing strategies and will likely increase the chances of a successful sale.
4. Company Marketing and Strategy
Using consumer insights helps companies develop a marketing strategy that meets customer needs and company goals. For example, a company may want to market to baby boomers interested in health and beauty products. This can help the company sell more products because the large consumer demographic is often interested in these products.
5. Business Development and Planning
Understanding what consumers want can help companies develop new businesses by identifying trends for future business growth. For example, a business might find that consumers are interested in yoga and other physical exercises, so the company may decide to create yoga classes to expand their market and meet consumer needs.
Knowing how consumers receive competition and what they like or dislike can help a company decide how to compete better with competitors. For example, if a company learns that consumers prefer one competitor over another, they may choose to create strategies to specifically appeal to that competitor’s weaknesses to gain more customers.
7. Regulatory Compliance
Many companies are required by law to collect data on their customers. Using customer insights can help companies comply with regulations and reduce legal risks. For example, a company may need to collect and report income tax information for customers who reside in the United States. It can do this by accessing customer data online or through existing customer surveys.
Consumer insights help companies limit risk and improve their bottom line by providing them with the information they need to serve their customers better.
The use of consumer insights can help a company understand their customers better, whether they are new or existing customers, to make better decisions when making business decisions. Beyond marketing and product development, using customer insight can also help a company set a sales and distribution channels policy.