Consumer Insight

What is customer insight?

Customer insight is simply understanding what makes customers tick, right? Not so fast. Marketing gurus say there is a higher form of insight emerging, one that holds thepromise of unlocking additional revenue and enhancing customer loyalty. In its most evolved state, customer insight means taking a new look at a customer segment, seeing things that no one else hasnoticed and then turning that knowledge into competitive advantage. "It is a fresh understanding about a customer that is not obvious to others," says Mohanbir Sawhney, the McCormick Tribune professorof technology and director of the Center for Research and Innovation at Northwestern University's Kellogg School of Management.
What is an example of customer insight in action?The Apple iPod is anexcellent case of a breakthrough customer insight, says Sawhney. The innovative personal digital music player leveraged two important phenomena. First, consumers adore handheld gadgets that give themthe ability to spin a private cocoon while in a public space. Second, digital music was a megahit in search of a legally viable foothold (as shown by Napster's wild but short-lived popularity). Afterporing over trend data and observing consumer behavior, Apple's "aha!" moment was seeing that a product combining a personal "bubble" with portable digital music would serve an untapped need. Throw inexcellent design, and you've got a sensation.Why are such insights gaining importance now?Primarily because globalization and ever-increasing competitive pressures are leading to faster-than-evercommoditization of products and services. "Customer insights have the potential to provide competitive advantage and differentiation," says Sawhney. So companies such as Best Buy are actively seeking abetter understanding of different customer segments in order to match their offerings to unarticulated buyer desires.How do marketers prospect for customer insight?Customer insights derive from...