Customer Insight: Types, Benefits, Strategies, and Tools

January 13, 2022

A famed tech investor Paul Graham asks startup founders one question: “What do you understand about your business that other companies just don’t get?”

If you don’t have an answer to that question, start looking for one. 

Great startups are built off of insight about customers. As Paul Graham indicates, their competitive edge comes from knowing something about customers that others just don’t understand.

But the trick is that your understanding of consumer behavior only matters if no one else knows it. If it’s too apparent to send an insight, competitors will pop up and do the same thing. Your product won’t be more effective or valuable than other ones on the market.

So, let’s start by understanding what customer insights mean and how you can create a robust customer insights strategy to boost your success.

What is Customer Insight?

By definition, customer insight is an interpretation that businesses use to deeply understand their potential customers and target audience’s needs and perspectives.

Customer insights are all about analyzing human behaviors to dive deep into wants, likes, dislikes, and the context behind these behaviors of the customers

So, proper consumer insights research will allow a company to improve its communication with customers, which will eventually improve customer behavior and increase sales as a result.

Here’s an example – The founders of ChubbyBrain initially wanted to make a Yelp-like site for private companies and startups but never asked their customer base if that was what they wanted or needed. 

Once they built the site, it became a low-traffic hub for bashing former employers instead of a startup resource. Even though they thought their idea was revolutionary, it just wasn’t relevant.

In essence, if you don’t ground your unexpected insights in practical, everyday customer solutions, it’s all for nothing.

Why is Customer Insight so Important?

Of course, you aren’t convinced just yet about why you should even bother collecting customer insights, so we thought it’s better to let its benefits convince you otherwise. 

Improves Customer Journey

The whole process of the customer journey benefits a lot from the customer insights. These insights help explore any gaps and find out what works best in improving customer experience

Customer insights are crucial at every stage of the customer journey. For instance, if your target audience doesn’t know about your brand yet, you can still collect insights and analyze and use them to your benefit.

Let’s look at an example to understand this better. A multi-billion dollar online home goods retailer, Wayfair, once conducted customer insight research and explored the data. Soon, they realized they needed to work on their customer experience. 

For this, they created an app that allows users to take pictures of the things customers like and share them on the platform to send them recommendations.

So, with the initial customer insights, they not only improved customer experience, but the app is now also a source of customer insights such as customer behavior.

Must Read: 25 Best Customer Experience Management Software in 2022

Promoters Personalization of Marketing

Mass marketing is not a smart strategy anymore for companies. Personalization has become a norm and needs for customers, so personalized marketing is the natural strategy. 

And for personalized marketing, you need customer insights. These insights will tell you which products are customers’ favorites and why. You can use these insights to update your buyer personas and create tailored strategies to see better results.

One fantastic example of personalized marketing is Spotify’s ‘Wrapped’ annual marketing campaign.


Spotify sends ‘Wrapped’ as a campaign to its users with the personalized music preferences of each customer for a whole year. It runs this campaign at the end of every year.

It mentions most played songs by each user, their top artists, and the total minutes they spend listening to songs. It’s like a complete year-end music summary of each user, which is interesting.

Boosts Brand Development

Brand development and customer experience go hand in hand. If the customers cannot connect to your brand, your brand development will not flourish as you want. 

You need to have a brand image that customers can relate to emotionally so that they don’t just see your company as an enterprise offering products but more than that. 

For this, using customer insights to explore what moves them, what social issues they are concerned with, and so on will help you build your brand in the right direction.

Assists in Inventory Planning

Customer behavior tells you more than any sales number could. Besides using sales for inventory planning, use customer behavior to explore why and when they purchase products, their motivations, and such insights will prepare you for better inventory management.

Identifies Context Behind Customer Churn

One of the most frustrating scenarios for any business is having a high customer churn rate without any idea why it’s happening. If you don’t know what’s causing customers to churn, you cannot stop the churn rate from increasing. 

Customer insights (especially in-context insights) allow businesses to understand what issues customers face, the kind of experience they have with your brand, and what areas need work to offer a good customer experience. 

Prepares You to Break into New Markets

The only way to break into a new market and emerge successfully is when you have an accurate idea of what your potential customers are like, their preferences, shopping behavior, and other environmental factors.

By performing user research and market research surveys, you can collect rich, unfiltered, and genuine customer feedback on which you can base your strategies to make your brand a success in the new market.

Here are a few questions you can ask:

To Segment the Target Market

  • Please specify your age.
  • Please specify your gender.
  • What is your job title?
  • What is your annual income?
  • How do you shop online?
  • How do you do your Holiday shopping?

To Gauge Brand Awareness

  • [Your brand name] Have you heard of the brand before?
  • How did you hear about us?
  • Would you recommend [your brand name] to others based on its current features and attributes?
  • Have you seen this brand’s advertisements?

{Bonus read: 100+ Market Research Questions to Ask Your Customers}

Nothing is better than a real-life example to understand something. So, let’s look at a case study of logistics company Lalamove and see how it used market research surveys to understand new markets through customer insights.  

Case Study: Lalamove

Lalamove case study

Lalamove is an Asian logistics organization that specializes in intra-city deliveries. Their operations are spread across  110 cities in Asia, making market and customer insights research indispensable components for their business strategies. 

The teams at Lalamove conduct surveys in the markets they plan to enter to understand the customer challenges and wants so that they can provide tailored solutions. They constantly use customer sentiment data to keep their strategies on the right track and offer an impeccable customer experience. 
If you want to look more into how they do it, you can check it out here.

Consumer Insights vs. Market Research

Market research and customer insights are two branches of the same tree. They have subtle differences that you should be clear about to utilize the data at your disposal.

In brief, market research:

  • deals with gathering information about customers and the markets
  • focuses on the market sizes, needs, and competitors 
  • delivers all the data in the form of statistics

On the other hand, customer insights:

  • focuses more on delivering the context behind the statistics
  • tells you why customers are behaving a certain way. 

{Bonus read: 12 Best Market Research Tools for 2022}

Types of Customer Insights

So far, we’ve discussed how imperative customer insights are for any business. Besides the general customer feedback you collect from analyzing social media, surveys on websites and apps, there are so many distinctions in the insights that it’s better if you know the types and how you can use them to your advantage. 

So, let’s start. 

  • Sales Trend

Sales trends are the behavior patterns customers show throughout the sales funnel. For instance, when customers interact with your business, you can analyze how often they ask for certain products, which features they excitedly inquire about. 

These inquiries can hint towards their preferences which you can use to update and promote those features and products or even create new ones. 

Make sure to analyze these sales trends, and you will find gold in the form of data. Doing so will help you predict demand spikes/drops, identify products with high/low demand, and so on. 

  • Product and Process Data

Interaction through customer support is essential in collecting valuable customer insight data. Customers interact with the support personnel regarding some issues they may be facing with your products, services, etc.

Doing so, they unknowingly provide crucial feedback that you should take as a rich source of information as a company. 

By analyzing this feedback, you can find areas to improve your products or processes.

  • Socio-Demographics

Another type of customer insight is socio-demographic information. You can collect this information through initial surveys on your website or social media. They provide the information they become a lead or your customer and interact with your brand through various touchpoints in the customer journey. 

This kind of customer insight data answers questions like “What age groups are more attracted to the product/service,” “What are the types of demographics you have as your customers?” and so on.

  • Personal Interest and Lifestyle

This type of customer insight is on the more personal level of customers. It’s about the kind of lifestyle they lead, which may affect their buying decisions, power, and preferences. 

Keeping track of such insights will allow you to target these demographics effectively with tailored strategies. 

Read Also: Best Customer Feedback Tools in 2022

Inspiring Real-Life Customer Insight Examples

With the theory under our belt, let’s move towards the real world and how brands have used customer insights to achieve their goals and more.

Nike

Nike implemented a masterstroke of a marketing campaign called “Find Your Greatness,” where the brand promoted aspirations of being an athlete with ordinary people (regardless of the physical capabilities) and high-performing athletes. 

The Insights: Nike found out that most of their user base consists of aspirational athletes who want to have a career in sports. So, the brand encouraged them to achieve their personal greatness.


Netflix

Netflix is a leading on-demand video streaming platform offering binge-worthy content. Besides the addictive content, Netflix’s ability to use customer insights to drive its branding, pricing, delivery, content, and user experience made the platform what it is today. 

For example, Netflix uses individual customer insights to offer personalized recommendations. For example, if a customer watches content from a particular genre, Netflix will recommend more content that matches their taste.  


What is a Customer Insights Strategy?

A customer insight strategy is a method that allows you to effectively engage and communicate with your target audience and customers and offer them relevant, innovative solutions, content, and services. 

Every organization has a customer insight strategy tailored for their business and is unique in its way. Even then, the goal of every strategy is the same – To understand the customers deeply to create a customer-centric and conscious brand.

How to Develop a Customer Insights Strategy?

Now that you have a glimpse of real-world customer insight examples of how a robust customer insight strategy can help you achieve, it’s time for you to create your own. 

We have covered everything that you need to do in steps. So, shall we dive in?

Step 1: Identify Who Are Important to a Good Strategy

Before starting anything, you need to figure out all the parties that are a part or should be a part of the strategy and how they can affect the end result. 

Are they stakeholders, customers, focus groups, other team members from different departments, etc.? Once you have this figured out, you will establish streamlined communication to keep the positive inflow of feedback and ideas. 

Step 2: Find Answers to These Important Questions

Once you establish the people who will be a part of the strategy, it’s time to sit with them and explore the three Ws – Why, When, and What and answer these six questions.

Why:

Question 1: What is the objective/purpose of creating a customer insight strategy? 

Question 2: What is your main goal with this?

If you are doing something, it should be for the right reasons. If you cannot find a genuine reason to start this process, you shouldn’t start at all.  

When:

Question 1: When are you planning to start the process? What is the timeline you are considering to complete the project?

Of course, the final timeline may differ from the one you created initially, but it is crucial to do so. 

Creating a timeline will allow you to estimate factors such as resources needed during the process, risk evaluation, and other customer trend predictions that may or may not explicitly affect your strategy development process.

Additionally, you need to keep the stakeholders updated along the way, so a timeline helps them get an idea about the progress of the process.

What:

Question 1: What kind of data do you want to collect and analyze? 

Question 2: How will you measure it?

Question 3: What are the limitations and obstacles you are or may face?

Every business faces certain limitations and issues during all processes. Although it may not be possible to avoid these hiccups entirely, you can certainly minimize the damage by anticipating them and making preparations for the inevitable.

Another point is the data you want to analyze. As we discussed above, there are many types of customer insights. You can choose to focus on one or more data types simultaneously depending on the insights you deem most relevant to you at the time. 

For instance, if you think you need to dive deeper into the demographic insights of your customers, you can create surveys and analyze the responses using advanced customer insight analytics to create personas.

These customer personas will allow you to create tailored customer journeys for different customer segments. 

Here are a few examples of demographic surveys.

Example 1: Exploring ethnicity  

demographic surveys.

Example 2: Identifying profession

industries survey question

For this, you can use customer insight software like Qualaroo. It offers different survey templates to choose from and comes with advanced analytics with targeting and filtering options. 

Again, you can track many things, such as:

Who:

Question 1: Who is this strategy for? 

Question 2: Who are you targeting: existing customers, specific demographic, potential leads, or a specific customer segment? 

Your targets will determine your end goal and what you want to achieve with your robust consumer insights strategy. 

Must Read: 50 Best Lead Generation Tools For Your Business

Step 3: Devise a Customer Journey Map

At this stage, when you have your team and your purpose clear, start working on creating a tentative customer journey map.  

Of course, you will make a detailed journey map later in the process, but you need to have one while creating a customer insight strategy. It will help you align your actions with the ultimate goal you want to achieve.

This is how a customer journey map looks like:

Customer Persona

You can use this template to create your customer journey map and while doing so, ask yourself these following questions:

  • What are the ways customers start their journey?
  • What does their first impression look like?
  • What touchpoints will they come across in the first few days, weeks, months, etc.?
  • What is the last touchpoint of the journey, and where do they end?
  • Do you have one or require multiple customer journeys?

You can measure the difference at the beginning and the end of the journey so you can fill in any gaps in your customer insight strategy. 

Once you understand the next steps for your customers in the journey, you can strategize and find the perfect touchpoints to collect desired insights.

Step 4: Create Customer Insight Surveys

Now that you have a way to know the key touchpoints where you should ask for customer feedback and collect insights, it’s time to prepare the deliverable that will help you do the same. 

You can create one long-form survey or add pop-up surveys throughout the customer journey to collect in-context feedback during different stages of the customer journey. 

There are other decisions you need to make of similar nature. For example, if you want to perform research via interviews, focus groups, or stick to the online feedback collection via in-app and on-site surveys.

All these decisions also depend on your customers’ level of engagement and the nature of your product/service.

Suppose you think your offering plays a considerable part in the life of customers and affects them on a day-to-day basis. In that case, you should go for more detailed and personal methods of collecting feedback such as focus groups, one-on-one interviews, and long-form surveys. 

If your product is essential for customers, they will take their time out and answer your long-form surveys and participate in other activities. To maintain and enhance customer engagement, you can use different tactics to offer monetary benefits through gift cards, vouchers, and more.

For example, tools such as Picreel help you create pop-ups offering monetary benefits to your website visitors to increase engagement and response rate on your surveys.  


Step 5: Select the Customer Insight Tools You Will Use

Until and unless you are required to create a complex customer insights strategy that would need a dedicated customer insights platform, you can just add a few helpful customer insight tools to your existing tech stack. 

To help you shortlist the best customer insight tools, we have dedicated this next section to a list of the top 6 tools you can choose from. 

Top 6 Tools to Use for Customer Insights

Each tool fulfills a different purpose in your strategy. So, you can choose one or more tools according to your business needs. Let’s look at each one and what features will assist you with your strategy.

Qualaroo

Qualaroo is a feedback software and a customer insight solution that allows you to create pop-up surveys using professionally-designed templates and from scratch. It comes with advanced survey targeting, branching logic, sentiment analysis using IBM-Watson, and other features that help capture in-context customer insights. 


You can use its NudgeTM feature to create pop-up surveys and add them to different pages of your website, in-app, and even in your prototypes to make feedback collection streamlined and get actionable customer insights. 

It helps you deploy different surveys, such as Net Promoter Score, Customer Satisfaction Surveys, Customer Effort Score Surveys, and Exit-intent surveys.


All the data is stored and analyzed using its dashboard with advanced reporting. You can download the insights in PDF format or CSV file format. 

The tool offers various integrations with different CRMs and other marketing and analytics platforms, so feedback collection and customer insight analysis are effective.  

For example, knowing about how the majority of your prospects discover your business, what they like about your product, what they dislike, or what they would like to see in your product via survey answers can help you work on your marketing and product development strategies

{BONUS READ: 10 Best Exit-Intent Pop-Up Tools to Increase Customer Retention}

Google Analytics and Its Goal Funnel

Google Analytics is an excellent and essential tool for every business. It does everything for your website, from tracking traffic and segmenting customer demographics to showing customer churn and bounce rates; the list is endless.

But one feature, in particular, we would like to mention separately is its Goal Funnel. It tracks customers that go through the purchase process and is very useful for retail sites and marketers. 

For any company, a goal funnel consists of a flow of pages where each step is a page visitors will visit to reach the set goal, such as the checkout page. 

You can set up a list of URLs that customers click through when they make a purchase or complete a goal, and Goal Funnel will track the number of customers clicked.  

Not just this, it tells you how many abandoned the purchase at a specific stage. Such insights tell you whether there is something in your checkout process and strategies that you need to revise and improve.  

Let’s take an example for a B2B setup. In this case, a visitor first discovers blog posts from the company. While going through the posts, they may click on product page links, schedule an appointment with your sales representative, and convert into a customer, which is the end goal.

Must Read: Top 30 Website Feedback Tools list

YouTube Analytics

YouTube is another popular marketing platform that most companies use to promote their work culture, products, services, infotainment content, and more. 

With the content you post, you can gather deep customer insights if you know how to look for them. YouTube analytics is a great tool that tells you all about your audience from demographics, watch time, popular videos, and so much more. 

You can use these detailed insights to evaluate your customer persona and, if needed, change your strategies accordingly. 

Image Source

Google Surveys

Another survey tool you can use is the Google surveys which also offer focus groups. You can submit your questions, and Google shows them to the relevant audience for only 10 cents per response. 

You can specify the type of data you are looking for, such as age, gender, income, geographical location, etc., and it will collect relevant responses.

Google Trends


As the name suggests, Google trends show what people are most interested in and when by analyzing the keywords used. As more people search a keyword, Google Trends tracks those keywords for metrics, such as how many views the keyword has.

You can track keywords relevant to your business to pinpoint what interests your potential customers and how you can use them to your advantage. 

Facebook Audience Insights

Facebook is one of the major social media platforms that work as a crucial tool for businesses. But behind the curtains, it has many functions that benefit businesses besides providing a platform offering global exposure. 

Its Audience Insights tells you all about your audience, such as demographics like age, gender, lifestyle, profession, and tracks likes and engagement on the platform.

Use Customer Insights to Lead Your Business to the Top

Whether developing your product or updating it, customer insights should drive your path forward, no matter what stage of development you’re in. 

If you closely analyze what your customer wants, iterate based on consumer insights, and listen to the voice of your customers, you’ll corner the market eventually. 

And to collect valuable customer insights, you’ll need a feature-rich tool that allows you to ask your customers without interrupting their customer experience. Once you have the support of a trusted tool, devising and implementing a robust customer insight strategy will become easier.

Frequently Asked Questions

How do you define customer insight?

Customer insight is the data about customers, such as their behavior patterns, personal information, preferences, buying history, etc. Any data procured through customer feedback or analytics is known as customer insights.

Which is the most important factor of customer insight?

Setting a goal is one of the most critical factors of customer insight. Once that’s done, you need to find out where the data comes from, how you’ll collect and analyze it, and what’s the quality of that data.

How do you use customer insight?

Businesses across the world use customer insights for various purposes. For instance, Netflix uses customer insights to create pricing, marketing, and personalized content recommendations. 

You can use customer data insights to improve processes, increase customer satisfaction, resolve customer issues to reduce bounce and churn rates, create bespoke products/solutions for customers, and much more.

What are the elements of customer insights?

There are four crucial customer insights elements:
Consumer research
Database marketing
Data quality
Analytics team

Want insights that improve experience & conversions?

Capture customer feedback to improve customer experience & grow conversions.

Want insights that improve experience & conversions?

Capture customer feedback to improve customer experience & grow conversions.

Want insights that improve experience & conversions?

Capture customer feedback to improve customer experience & grow conversions.