THE BLOG
10/02/2014 01:38 pm ET Updated Dec 02, 2014

What Are Consumer Insights and How Do They Impact Marketing Effectiveness?

While companies today might agree that consumer insights are a good thing, there are varying levels of opinions about just what these insights should be and how to use them. Traditionally, the struggle has broken down along departmental functions. Research focuses on the numbers, marketing wants to reach new customers, and sales just wants more leads, with little coordination, sharing or understanding.

For a long time, this segmentation worked, too. Back when there were three television networks, one newspaper in every city, and clearly defined radio stations, it was easy to generalize that your audience was 25-54 and that millions of them would be watching NBC between 8:00 and 10:00 p.m. on Thursday evenings. Put out a catchy message or a spiffy new product, and customers would line up outside your doors.

How things have changed in just a decade or two. Now there are hundreds of television and cable channels, let alone Netflix and DVRs. Local radio is fading as satellite networks take command of listeners. Even the once mightiest of newspapers are struggling to survive. That doesn't even begin to take into consideration the myriad online marketing and social media marketing opportunities that must now be brought into the fold.

Since simple demographics no longer suffice in this complicated and complex marketing environment, consumer insights have begun to take hold in the corporate mindset. Researchers, or those who casually profess to provide consumer background, are now being forced to provide more than just numbers, but real useful information that can be acted on by all parts of the organization that are involved in doing business with prospects and customers.

When compiled properly, consumer insights can make it almost feel like a "typical" consumer has been invited into the boardroom and conference rooms where decisions are being made. While traditional marketing research involved gathering mounds of facts, figures and statistics to look for generalities or trends, that was really just skimming the surface. Consumer insights research gets under the skin and inside the consumer's head to find the "why" of a purchase, to understand what happened, and to project what could occur in the future.

Consumer insights don't necessarily come from one focus group or customer survey. They are usually gathered through a combination of information-gathering activities and combined with an analysis that provides texture and meaning. Often in today's business environment, an anthropologist or ethnographer may even be brought in to help provide a deeper cultural understanding of why an individual or a group chooses to take a specific action.

From Mass Marketing to Personalized Marketing

Today's businesses must gather consumer insights in order to strategize and implement effective consumer marketing strategies. This applies not only to how to present products and services to the buying public, but even to the development of the products and services themselves.

Traditionally, a company might develop a product and then spend millions of dollars on mass marketing to push it out to consumers. In a way consumers were almost being treated as children - here's what you need to make your house look great, to smell better, to attract someone. This arrangement worked rather well for some time, too. But try achieving the same results today when corporations are called to task in the social media universe for any perceived slight or condescending attitude.

Consumer insights provide understanding that leads to marketing on a more direct and personal level. Not only does a beverage company need to know which parts of the country call it soda and which say "pop," they may even find it helpful to understand whether cultural differences play a role in beverage selection. Do people from a certain ethnic background prefer one type of drink over another?

Consumer insights can help try to find a problem that the company can solve. How long did it take auto manufacturers to finally realize that some people had problems opening the tailgates on their SUVs, and that the ability to simply wave your foot under a sensor to open it might actually help sell vehicles?

Anthropologists and ethnographers can also uncover group dynamics that can aid in launching products, building sales or establishing a brand identify. This understanding will definitely be necessary as corporations delve into the veritable gold mine of marketing that is social media. The ability to identify group influencers and advocates, and predict how information will be shared among the group members, can lead to a more effective consumer relationship in an online world.

This learning can be applied to business and marketing decisions that provide a corporation with a competitive edge. Once you know why your customers do things a certain way, it will be much easier to establish and build long-term relationships with them.