Principles and Definition of Insight

"The best vision is insight." — Malcolm Forbes, Publisher of Forbes Magazine.

Understanding the deeper nuances of data allows companies to see beyond the obvious and craft strategies that genuinely resonate with their audience.

For instance, companies that use emotional marketing report 31% higher revenue, demonstrating the power of connecting with customers on a more profound level. But how do these companies achieve such results? The answer lies in their ability to derive actionable insights from their data.
Often needing clarification with raw data, insights go beyond numbers to reveal underlying patterns, behaviors, and opportunities that can drive business success. So, what are insights?

Read on to learn the principles and definition of insights and discover how they can change how you operate and grow your business.

What are Insights?

Imagine running an e-commerce store and feeling like you were firing blindly at sales targets. You track website clicks and analyze shopping cart abandonment, but your conversion rates leave something to be desired. That's because data, while valuable, is just the tip of the iceberg. What you need are insights.

So, what are insights? Insights are the "aha moments" that transform data points into actionable strategies. They're the "why" behind those abandoned carts, the reason a specific product category is underperforming.

Let's say your data shows a surge in traffic for athletic wear, but sales for running shoes need to catch up. Here's how insights can unlock your next move:

Data tells you what: Traffic is high, but conversions are low.
Insights tell you why: Maybe your running shoe selection lacks variety, the sizing information needs to be clarified, or the return policy needs to be customer-friendly for runners who might need to try multiple pairs.

With this knowledge of what are insights, you can:

Expand your running shoe range to cater to different running styles or foot types.
Improve product descriptions with detailed sizing guides and user-generated reviews.
Offer a free return window for running shoes, addressing a potential customer concern.

These strategies align perfectly with the top factors motivating online shopping. According to the Academy of Marketing Studies Journal report, 50.6% of US online shoppers are driven by free shipping, 39.3% by coupons and discounts, and 33.2% by convenient returns.

Learning what insights are from industry leaders on how they leverage customer feedback to refine their strategies and enhance user experiences is crucial for reducing customer churn.

Also Read Guide To Reduce Customer Churn – 10 Strategies With Examples.

Clarifying What Are Insights and What Are Not

It's easy to confuse insights with simple observations or customer wishes. This distinction is crucial for companies striving to grow and make informed decisions. So, what are insights? Let's break them down. ‍

Understanding what insights are helps distinguish valuable information from raw data, opinions, assumptions, general observations, and gut feelings, providing a more straightforward path to actionable decisions. Read below to understand in detail:

Distinguishing Insight from Data, Observation, and Expressed Customer Needs

Data, observations, and expressed customer needs often need to be corrected for insights. However, what are insights, if not more, than raw data?

Data: Raw data are unprocessed facts and figures. They tell you what happened but need to know why. For instance, knowing that your website had 10,000 visitors last month is data.
Observations: Observations are general statements about customer behavior. They might tell you many visitors abandon their carts, but they don’t explain the underlying reasons.
Expressed Customer Needs: These are direct requests or feedback from customers, such as wanting faster shipping times. While valuable, they often reflect surface-level desires without more profound analysis.

Accurate insights dig deeper, revealing the motivations and drivers behind these data points and observations.

For instance, Nudge’s Surveys feature can help gather more nuanced customer feedback, transforming expressed needs into more profound insights by leveraging customizable survey tools.

2. The Necessity of Rigorous Analysis to Transform Observations and Data into Insights

More than simply gathering data and observations is required. Rigorous analysis of what are insights is essential to turn these elements into actionable insights.

Here's how you can do it.

Identifying Patterns: Look for trends and patterns in the data. For example, if a specific product sees a spike in traffic but low sales, that’s a pattern worth investigating.
Understanding Context: Contextualize your data. Why are customers abandoning their carts? Is it due to high shipping costs, unclear return policies, or something else?
Interpreting Data: Go beyond the numbers. What are insights telling you about customer behavior and preferences? This involves qualitative analysis and sometimes even psychological insights.

Nudge emphasizes transforming raw data into meaningful insights through comprehensive analysis. User research and insights, such as customer behavior analytics and personalized recommendations, help companies understand the "why" behind customer actions, enabling better strategic decisions.

Also Read: Mobile App Retention Rate Stats and How to Improve Them for 2024.

3. Insights Versus Customer Wishes: Beyond Surface-Level Desires

Customers might desire lower prices, but the underlying insight could reveal a need for better value or a more personalized shopping experience.

Surface-Level Desires: According to a report by Inmoment, in-app surveys boast an average response rate of 60%, significantly higher than traditional email surveys, which average around 24.8%. These responses are customers' direct requests or complaints through surveys. They provide valuable information but often need more depth.
Deeper Insights: Insights go beyond these desires to understand the root causes. For example, customers asking for lower prices might seek better value, which can be addressed through Nudge’s loyalty programs like challenges and improved product quality.

A scoring system tracks user activity, clearly showing engagement levels. By analyzing the points users accumulate, you can identify which tasks or activities are most popular and less engaging. This data helps you understand what drives user interaction and allows you to tailor content and features to meet user preferences better.

*Nudge Platform for Customer Engagement*

Five Principles of Insight Definition

Understanding what are insights and how to derive them is essential for any business aiming to make informed decisions

Did you know that according to a report by McKinsey & Company, companies that use customer behavioral insights outperform their peers by 85% in sales growth and more than 25% in gross margin? This demonstrates how understanding customer behavior can directly drive revenue increases.

Here are the five principles insights.

1. Setting the Context: The Importance of Background Understanding

Context is crucial when defining what are insights. It involves understanding the broader environment in which the data was collected, including market conditions, cultural factors, and historical trends. With context, data points can be clear and understood.

For example, a spike in sales of a particular product might initially seem optimistic, but if it's a result of a competitor's failure or a short-term trend, the insight changes. By contextualizing data, you can ensure a clearer picture, integrating factors such as seasonal trends and market shifts to understand the underlying reasons behind data patterns

Here is an example of what are insights with a marketing campaign poster for McDonald's McRib sandwich, illustrating a festive winter season theme. This campaign leverages the context of the increase in McRib sales during winter months in specific regions.

2. Communicating the Dilemma: Identifying Consumer Barriers and Conflicts

To derive valuable insights, it's essential to identify and communicate the dilemmas consumers face. This involves pinpointing the barriers and conflicts that prevent consumers from achieving their goals. Understanding what are insights helps recognize these obstacles and tailor solutions more effectively.

For instance, if consumers frequently abandon their shopping carts due to high shipping costs, recognizing this barrier allows companies to address it directly, perhaps by offering free shipping thresholds. Nudge’s in-app surveys feature can identify these pain points, help understand what are insights, and provide clear communication channels for consumers to express their dilemmas.

Also Read: How B2C Companies Like Uber & Airbnb Use In-App Surveys to Drive Actionable Insights.

3. Articulating the 'Why': Exploring the Reasons Behind Behaviors

Articulating the 'why' behind consumer behaviors involves delving into their motivations and reasons for action. This principle focuses on understanding the more profound, often psychological, reasons that drive consumer decisions. For example, consumers might choose a more expensive brand because it aligns with their self-image or values.

Companies can use Nudge’s feature adoption and announce new product offerings when users need them, utilizing contextual spotlights, PiP videos, challenges, and more.

Additionally, Nudge can boost conversions and completed purchases by deploying in-app messages at the right place and time.

Lastly, Nudge helps grab users’ attention to specific features through contextual coachmarks, ensuring a seamless and engaging user experience.

*Grab Users' Attention with Contextual Coachmarks*

4. Capturing the Motivation: Investigating What Drives Consumer Actions

Motivation is a crucial driver of consumer behavior. Capturing these motivations involves understanding what drives consumers to act in specific ways, whether it's a need for convenience, status, quality, or price.

Nudge's gamification and rewards feature is excellent for capturing consumer motivation. By offering points or rewards for specific actions, companies can enhance the perceived value of their offerings.

*Increase Engagement and Average Use Time with Nudge Games*

This approach increases engagement and provides valuable data on customer preferences and behaviors. Moreover, integrating rewards programs can encourage repeat purchases and foster loyalty by making customers feel valued and appreciated.

5. Envisioning the Ideal: Describing Consumer Desires Without Offering Solutions

The final principle involves envisioning the ideal scenario from the consumer’s perspective. This means describing what consumers genuinely desire without immediately jumping to solutions. It’s about understanding their ultimate goals and aspirations.

For example, consumers might desire a seamless shopping experience where they can easily find and purchase products without hassles. By using insights gathered through Nudge, companies can envision this ideal experience and strive to create it, whether it involves simplifying the onboarding and checkout process or enhancing customer service.

Turning Knowledge into Actionable Insight

In today's data-driven world, e-commerce companies are bombarded with information. But what if you could transform that data into actionable insights that drive actual results?

Nudge understands the importance of these insights. Our platform offers features that help e-commerce companies turn raw data into actionable insights:

User Research & Insights: Track and analyze customer interactions to understand what drives their decisions. For example, the ASOS store discovered that most users abandon their carts at the checkout page. They then streamline the checkout process, reducing cart abandonment rates by 20%.
Personalized Recommendations: Use insights to offer tailored product suggestions that increase conversion rates. Amazon’s site recommends related products using customer purchase history and browsing patterns. As a result, a customer who buys a camera is shown compatible lenses and accessories, increasing the average order value by 15%.
A/B Testing Tools: Test different strategies and identify what works best to improve user experience and sales. Sephora’s website tested two versions of its homepage: one with a prominent banner and another with a video introduction. The A/B testing revealed that the video version leads to a 10% higher conversion rate, which they implemented site-wide.
Advanced Reporting: Get detailed reports highlighting key performance indicators and areas for improvement. A tech gadget retailer (Gartner) uses advanced reporting to identify that sales peak during specific times of the year. They adjust their marketing strategies accordingly, leading to a 25% increase in seasonal sales.

Insights are the innovation engine of e-commerce. They help you create a seamless customer experience that anticipates needs and removes friction from the buying journey. They're the difference between a generic online store and a destination for happy, loyal customers.

Conclusion

"The goal is to turn data into information, and information into insight."

— Carly Fiorina, Former CEO of Hewlett-Packard.

Forget what happened yesterday; unlock the secrets behind ‘why’ your customers click. In today's e-commerce battlefield, data without insights is just noise. Nudge is your weapon for turning that noise into a symphony of success.

With Nudge, you have the tools to turn knowledge into actionable insights seamlessly. Our platform empowers you to track and analyze customer interactions, offer tailored recommendations, test various strategies, and gain advanced reporting to identify key performance indicators and areas for improvement.

Understanding what insights are can be the innovation engine for your e-commerce business, helping you create a frictionless buying journey that turns visitors into loyal customers.

Ready to see how insights can transform your business? Book a demo with us today, and turn your data into actionable strategies!