Customer insight is a marketing term used to describe the way that information about customers is gathered by companies in their efforts to stimulate future business. Cultivating excellent long-term relationships with customers is crucial to any business hoping to succeed. For that reason, marketing teams pay close attention to customer insight when devising promotions, marketing strategies, and advertising campaigns. This concept also pays close attention to how different triggers stimulate customer action and how the past behavior of customers can be projected in the future.
Marketing techniques have changed greatly over time. In the past, when media like television, radio, and print media first gave companies new avenues to advertise, the focus was often placed on the products and services that the companies had to offer. But that view has gradually evolved to the point where much of marketing is based on predicting how it will affect the company's consumers. This customer-driven approach is especially prevalent due to developments in computer technology, which allow marketers to reach consumers just about anywhere. As a result, the concept of customer insight is as crucial as any other in the world of modern marketing.
In many ways, customer insight is a concept with psychological elements. Companies are essentially trying to get inside the heads of their customers to gain some knowledge of why they buy the things they buy and how they can gain the customer's trust in a specific brand. The ability to do this would conceivably allow the businesses to cater all of their efforts to the sensibilities of its consumers.
Since getting inside the heads of customers is technically impossible, companies rely on past behavior to gain customer insight. To those ends, propensity modeling is a technique which takes the past actions of customers are makes predictions on how they will act in the future. This is especially useful when studying how past initiatives impacted the customer base, either negatively or positively. Learning from these past lessons can give marketing personnel an educated guess about how future promotions or sales campaigns will be received.
While customer insight can help make marketing decisions in the short term, it is also valuable for a company looking beyond the next promotion to building a stable, long-term business. Treating customers as assets with a specific value allows companies to judge their worth in a similar fashion as they might judge the worth of a new piece of machinery. This makes the decision-making process clearer when it comes to marketing choices related to customer attraction and retention.