What Is Marketing Without Customer Insights?

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Marketers engage in a wide range of activities, from developing customer segmentation and targeting strategies to executing email campaigns. The one thing that all marketing activities require to be successful is customer insights.

Marketing facilitates the intimate understanding of customers’ needs, wants and expectations in order to identify opportunities to focus the execution of marketing activities, but how do organizations determine where to invest their resources to appropriately balance these needs? Typically, companies allocate approximately 10% of their annual revenues to marketing, but how much of that goes to gathering customer insights? Chief marketing officers report allocating 0 to 6% of their marketing budgets to research, so that leaves anywhere from 94 to 100% of their marketing budgets for other activities. What about those organizations without funds allocated to research? What happens when companies execute marketing without research to build a deep customer understanding? 

We recently conducted a marketing assessment for one company and found that more than 85% of its headcount and 100% of its marketing budget went toward tactical marketing activities (such as email campaigns, flyers, advertising, etc.), with almost none of its budget allocated to research. Not surprisingly, this client failed to recognize its desired returns. Upon further investigation, we determined that the company’s marketing tactics were developed with little to no insight from customers, using only anecdotal stories from sales or operations teams and some desk research into competitors’ activities. So what does marketing without customer insights lead to?

  1. Poor investment decisions and decision-making processes: Anecdotal evidence becomes the default tie-breaker among stakeholders making strategic marketing investment decisions, and unfortunately, the loudest voice in the room often gets what he or she wants, not necessarily what’s best for the business.
  2. Over-emphasis on poorly informed tactical marketing activities: Marketing teams can quickly be reduced to sales support fulfillment agencies, spending significant time creating fliers, drop cards and custom materials that don’t add value to the rest of the organization. Furthermore, these activities are often based on someone’s opinion of what looks or sounds good, rather than on what would actually resonate with customers.
  3. Internally focused customer engagement: Without an understanding of customers’ needs or preferences, most organizations revert to what they think they do best. For example, a company may have a dedicated resource and great social media platform to engage customers, but if that isn’t how customers want to engage, these are wasted efforts.

Now that we’ve made the case for customer insights in marketing, where and how do we start to develop customer-centric marketing strategy and tactics? Here are three steps to get you on the path to recognizing the returns from your marketing investments:

  1. Gain a deep customer understanding. Collecting and analyzing customer research and feedback is critical to understand customers’ needs, engagement preferences, buying behaviors and the health of your customer relationships, and how these things differ across different customer segments.
  2. Prioritize your customer segments and targets. Not all customers are created equal, so understanding different customer types and how they align to your organization’s vision and strategy is a critical input to an effective marketing strategy. Marketing budget and resource investment decisions should reflect the overall priority and alignment of a target customer segment.
  3. Integrate your engagement strategy. Develop a holistic engagement strategy that incorporates not just marketing tactics and touch points, but also the sales, delivery and service elements of your customer experience.

For any marketing effort, focusing on the customer is key, and marketing organizations can’t do that without customer research and the resulting insights. 

2 COMMENTS

  1. Very refreshing piece on the importance of gathering customer insight.

    It underscores the importance exhibiting or attending trade shows. Going out and engaging the market, shaking hands, seeing the latest trends and getting feedback is key.

  2. Completely agree, Rachel. Most of us face a tremendous volume and velocity of anecdotal information and a strong organization and individual urge to react to that information. As you point out, that often produces poor results. True and representative customer insights generated from rigorously designed and well executed market research are much more likely to help any business achieve its broader marketing and business objectives. Thanks for taking the time to make an important point.

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