Customer Insight

Given the fundamental shift in your industry, how can you effectively create and use customer insight from existing data?

Customer Insight is defined as 'the ability to perceive clearly or deeply', a deep, embedded knowledge about our consumers and our markets that helps structure our thinking and decision making. Everyone involved in marketing needs this form of Insight. In a customer- focused organization it is something that almost everyone should have [1] Market research or customer database can often help a firm to deliver that insights or discoveries that can lead to specific opportunities.

A high quality process must be in place to decide what consumer insight it need and what it does not need. It should include how it targets to use those insight and what operational processes it needs to make sure that it does use insight - either when the organisation or its business partners are interacting with consumers, or when it is planning what to do with consumers [2] Database marketing depends on insights from consumer information that relies on creating a bank of information about individual consumers that are taken from orders, enquiries, consumer service contacts, research questionnaires, external lists.

Discuss how you can apply the data-to-value cycle in your organisation.

As mentioned, database marketing depends on insights from consumer information. This bank of information is used to analyse consumers' buying and enquiry patterns. The analysis coupled with the opportunity offered by the database to contact individual consumers through a variety of media, enabled an organization to attain several objectives [1][2], such as:

* Design products to meet the needs of identified consumers;

* Target the marketing of products and services quickly and more accurately at the same time, Add a Note Herepromote the benefits of brand loyalty to consumers at risk from competition;

* Identify potential consumers likely to buy new products and services thus Add a Note Hereincreasing sales effectiveness

* Support low-cost alternatives to traditional sales methods;

* Make the marketing function more accountable;

* Improve the link between advertising and sales promotion, product management and sales channels;

* Improve consumer care by making all relevant information available at the point of contact between the organisation and its consumers anytime during service delivery;

* Coordinate different aspects of marketing as they affect individual consumers.

For example, Tesco is the largest retailer in UK. Data from its loyalty card scheme - Clubcard, revealed that families with babies who shopped for child- care products spent much more than similar families who did not buy these products from Tesco, although they bought similar amounts of other products. It's market research revealed that non-baby product buyers trusted the Tesco brand less for baby products than for the other products that they bought at Tesco. These customers preferred to take their baby business to Boots, the leading retailer of healthcare products despite Boots charging up to 20% more. Therefore, Tesco decided to modify its positioning towards mother and baby customers by partly by setting up the Tesco Baby Club. This and a number of other initiatives led to Tesco gaining share rapidly from Boots, and it now sells as much in childcare as its nearest two competitors, Boots and Mothercare. [3]


[1] Stone, Merlin, Alison Bond, and Bryan Foss (eds). “Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer”. Kogan Page. © 2004.

[2] Stone, M, Woodcock, N and Foss, B (2002) The Customer Management Scorecard, Kogan Page, London, especially chapters 11, 12, 22 and 31.

[3] Humby, Clive, Terry Hunt, and Tim Phillips. Scoring Points: How Tesco Is Winning Customer Loyalty. Kogan Page. © 2003.

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