Online stores need to strive for more than one-sided trans­ac­tions, cre­at­ing immer­sive sites that engage cus­tomers in con­ver­sa­tions about what’s mean­ing­ful to them. This is my sec­ond in a series of posts on the prin­ci­ples behind experience-driven com­merce, or e-commerce inte­grated with rel­e­vant and engag­ing content.

The first pil­lar—interactivity—is about the meth­ods and media you use to engage vis­i­tors. Ele­ments of inter­ac­tiv­ity include respon­sive design, video and graph­ics, social media cam­paigns, and conversation-sparking in blogs and forums. The goal of inter­ac­tiv­ity is to form rec­i­p­ro­cal rela­tion­ships with cus­tomers and gain oppor­tu­ni­ties to lis­ten to their needs and desires.

These rela­tion­ships form the basis of the sec­ond pil­lar of experience-driven com­merce: insight. The infor­ma­tion and data you derive from cus­tomer behav­ior and inter­ac­tions gives you deeper per­cep­tion and under­stand­ing of your audi­ence, allow­ing you to con­tin­u­ally enhance cus­tomer expe­ri­ences in an ever-evolving cycle.

Can We Really Rely on Data?

Gath­er­ing cus­tomer insight can be a com­plex, mul­ti­step process that requires intim­i­dat­ing tech­nol­ogy invest­ments. It is tempt­ing to focus on mea­sur­ing only the last click-to-purchase, and ignore the lead­ing indi­ca­tors that could fos­ter loy­alty. But I sus­pect this temp­ta­tion arises from less-than-stellar expe­ri­ences with the old meth­ods of gath­er­ing cus­tomer insight.

In the past, com­pa­nies had two options: send cus­tomers a sur­vey and rely on the often dis­mal return rates for data, or con­duct focus groups and inter­views with a very lim­ited pop­u­la­tion. Both forms of data are use­ful to a point, but they are also basi­cally flawed. Humans have noto­ri­ously inac­cu­rate mem­o­ries, and are very sus­cep­ti­ble to sug­ges­tion. For exam­ple, after mak­ing a major pur­chase, your mem­ory might skew toward pos­i­tive rec­ol­lec­tions of the trans­ac­tion and feel­ings of sat­is­fac­tion with the prod­uct. Why? To pro­tect your­self from buyer’s remorse and jus­tify the expense. And mem­bers of focus groups will be swayed by other mem­bers, inter­view­ers, their envi­ron­ment, that day’s com­mute, what they had for break­fast, and .… You get the picture.

Today’s dig­i­tal ana­lyt­ics tools can cap­ture cus­tomers’ feel­ings and actions in the moment, and help keep insights free of bias. With the right data, you can see what paths cus­tomers are tak­ing and what they do imme­di­ately after inter­act­ing with con­tent, or while they interact.

What’s the Dif­fer­ence between Data and Insight?

Think of data as the raw stuff—the mol­e­cules. The mol­e­cules of data come together to give form to cus­tomer insight, or the com­plex, three-dimensional view of your cus­tomers. Insight is your under­stand­ing of what dri­ves indi­vid­u­als to visit and engage your  brand on mul­ti­ple chan­nels. What is res­onat­ing with your vis­i­tors? What paths are they tak­ing, and what com­pels them to make a pur­chase, or visit you again? What do they think of your brand and what do they find lack­ing? What are their moti­va­tions, desires, beliefs, pref­er­ences, prob­lems, loca­tions, habits, and favorite meth­ods of communication?

Behav­ioral econ­o­mist Ravi Dhar has this to say about data and insight:

“To me, an insight is really a pow­er­ful dis­cov­ery about the under­ly­ing moti­va­tions that drive people’s actions. It’s a dis­cov­ery process; it’s not some­thing that peo­ple can nec­es­sar­ily artic­u­late. It can come through obser­va­tion, it can come through trends, but it’s not the data. It’s the dis­cov­ery about moti­va­tion that comes from the data. An insight is a moti­va­tion that dri­ves some kind of action.”

Cus­tomer insight includes all the details that allow us to per­son­al­ize expe­ri­ences and speak directly to unique tar­get seg­ments. It’s the source mate­r­ial for the story you will weave around your prod­ucts, and the core mes­sag­ing of your brand. Cus­tomer insight acknowl­edges that strong nar­ra­tives are still at the core of great dig­i­tal expe­ri­ences, and seeks to craft nar­ra­tives that are delight­ful, rel­e­vant, and inti­mately reflect the individual’s ideals and aspirations.

How to Gain Cus­tomer Insight

Test­ing reveals which design and expe­ri­ence choices con­vert bet­ter, but it can’t explain why. You must take extra steps to gain that insight. This might sound mys­te­ri­ous, but there are some sim­ple ways forward.

Ask­ing cus­tomers for in-the-moment feed­back is one way to learn why they came to your site, if they were able to accom­plish what they wanted, what they liked and didn’t like about your site expe­ri­ence, and why they either aban­doned their cart or com­pleted a pur­chase. The answers to these ques­tions then feed back into con­ver­sion opti­miza­tion tech­niques: if you learn that 30 per­cent of vis­i­tors are aban­don­ing their carts because they felt too much infor­ma­tion was required of them, you can reeval­u­ate the forms and fields on your check­out pages.

Read­ing and ana­lyz­ing reviews left by cus­tomers is another sim­ple yet valu­able method for gain­ing insight. What feel­ings are cus­tomers fre­quently express­ing, and what expe­ri­ences do they describe? What pleases them enough to leave a five-star review, and what both­ers them enough to lam­bast you?

How Piv­otal Insights Become Amaz­ing Brand Strategies

Helen Edwards cites Pam­pers as a great guid­ing exam­ple of worth­while insight. The company’s old brand mes­sage cen­tered on dia­pers that stay leak-free even when lit­tle ones squirm and play. The assumed knowl­edge was that leak-free was every parent’s pri­or­ity. Then a new data-gathering mis­sion led to this new insight: par­ents aren’t think­ing about leaks, they’re think­ing about sleep—a pre­cious gift they’d do any­thing to get more of. So Pam­pers shifted its mes­sage and strat­egy, and began deliv­er­ing bed­time dia­pers with extra dry lay­ers so babies don’t wake up from wetness.

Simon James of RAPP recalls how “the suc­cess of the Wii took many indus­try observers by sur­prise, sell­ing over 10 mil­lion units in 2008”—more than twice the sales of the Xbox 360. Nin­tendo pre­dicted what oth­ers didn’t by care­fully research­ing and observ­ing gam­ing trends. The company’s crit­i­cal insight was that gam­ing was “mov­ing from the bed­room to the liv­ing room and the [audi­ence was widen­ing] beyond 15–34 year old males.” They responded by brand­ing them­selves as a fam­ily sys­tem, with games tar­geted to mul­ti­ple age ranges that encour­age a more com­mu­nal play­ing strategy.

Iden­tify Your Most Piv­otal Cus­tomer Insights

Use Edwards’ def­i­n­i­tion of con­sumer insight to fil­ter the true insights from the mere findings:

“Con­sumer insight: a rev­e­la­tory break­through in your under­stand­ing of people’s lives that directs you to new ways in which to serve your cus­tomers better.”

The key part of that def­i­n­i­tion is “serve your cus­tomers bet­ter.” If a new under­stand­ing of your cus­tomers can con­tribute to a more rel­e­vant and help­ful prod­uct, ser­vice, or expe­ri­ence for your cus­tomers, it’s worth focus­ing on.

Rev­e­la­tory break­throughs don’t just hap­pen. You can arrive at them by devel­op­ing a deep under­stand­ing of your cus­tomers, choos­ing the most rel­e­vant data points, and rig­or­ously test­ing experience-related vari­ables. Use ques­tions and focus groups to iden­tify the unique val­ues of each cus­tomer seg­ment. Fol­low up with tests to opti­mize the aspects of your dig­i­tal expe­ri­ences that most pow­er­fully impact decisions.

Start with an open mind and don’t make assump­tions about your cus­tomers’ needs and pref­er­ences. Experience-driven com­merce requires you to think harder and unearth your audience’s core moti­va­tions. If you make cus­tomer insight one of your key pur­suits every step of the process, you will be able to move beyond bait­ing con­sumers with coupons and begin nur­tur­ing loyalty.