Customer insight communities: Use or lose?

One of the most common conversations I’ve found myself having with insight buyers over the last few years is around how to do more with less.

This is fairly unsurprising, given the high degree of uncertainty that remained about what a post-Covid era would look like. While budgets were scythed, there was an increased need for consumer insight to help organisations pivot and readjust. Many of the businesses I worked with rebounded quickly and went into the remainder of 2021 confidently.  However some of my insight clients were still burdened with defensive straightened budgets – an inevitable and undesirable hangover from 2020.

In these conversations around quick wins and cost efficiencies, the discussion can often veer towards maximising the potential of existing resources. And one of the most powerful assets an insight manager has at their disposal is their customer base. In theory, a potentially limitless source of free views and opinions. So understandably clients are keen to build insight-focused customer communities to harvest the value that these tools offer, rather than rely on traditional third-party customer panels.

Harnessing this resource of (hopefully) brand-engaged consumers has a great deal of merit. But as the title of the piece suggests I am here to urge caution. I have witnessed brands and insight functions lean too heavily into this path, either leading to wasted time, effort and investment or can introduce reputational & operational risk by relying on data to make decisions that is too compromised and questionable to be of use in providing the business with direction.

I imagine many insight professionals – and those in the marketing and product roles who are reliant on consumer insight – may be tempted to make increasing use of the voice of their customers to provide the evidence on which they can define a business strategy. As such, I thought it would be worthwhile to share my thoughts on the advantages and pitfalls of this approach:

Three reasons to lean into the voice of the customer and customer communities:

Let’s start off with why the creation of bespoke customer insight communities makes sense:

Customer engagement

While for the insight professional this is a welcome by-product, customer insight communities can be a great way of increasing brand engagement. Consulting with your customers, telling them how you will use the insight and launching new products, services or initiative off the back of the work creates a cycle that serves to draw your customers in and make them feel respected, valued and increasingly invested in your success.

Cost efficiencies

One of the most-costly elements of consumer insight at scale can be the recruitment and incentivisation that is required to encourage people to take part in surveys. Depending on who you want to speak to, accessing consumers from a panel will typically cost several pounds per interview, costs that quickly ratchet up the cost of a project at scale. Niche audiences (which may include your customers) will typically cost even more to access via a research panel and can make consumer insight projects prohibitive. This alone is a great reason to invest in engaging your customers and turning them in to stakeholders prepared to share their views for little to no cost.

Customer as expert

Your customers often know more about your brand than those within the business. Also as an overall cohort, they can be relied upon to have strong views on why they stick with you or why they would go elsewhere. This combination of passion and expertise is gold dust and can be leveraged to good effect to help make some kinds of decisions around product and marketing and is essential to helping understand how to improve CX or understand how your base feels about your brand.

And three reasons to be cautious:

So where is the catch? From reading the above you may feel that there isn’t one. But before you head to commission a bespoke customer panel to serve all your insight needs, consider the following:

A big investment

A very practical consideration, but customer communities are a real time sink and money pit. Once you have recruited a pool of your loyal customers, you’ve got to keep them subscribed and engaged. This means you will spend a lot of time with the kid gloves firmly on. I know from experience that community members want rewarding for their time in two ways – (cash) rewards and feedback; you told us ‘X so we did Y’. The net result is an endless cycle of prize draws, feedback emails and engagement activities. And these by-products of the insight process can often become more of a focus than the insight process itself.

Biased & self-selecting

The research you will conduct via a customer community will have several built-in biases which will have to qualify any insight you generate. Firstly, it is a self-selecting audience. The people in your community are your customers, depending on your brand these may be distinct from the population at large, but they are also your most engaged customers so a subset within a subset. All of a sudden, the insight you generate doesn’t seem so reliable or is harder to extrapolate with confidence.

An echo chamber

Trying to make strategic decisions and set plans and priorities by speaking only to your customers is all well and good… if you have no desire to acquire customers. If you are using insight to develop new products, services or marketing campaigns with the intention of converting new customers, you need to break out of the cosy bubble of your customers and face the critical glare of an often dispassionate public.

So what should you do?

If you are an insight professional or someone with oversight of an insight function I can’t tell you whether an online research community is right for you or your business. But as someone who doesn’t have a dedicated tech platform to hawk I can be fairly bipartisan. If we take a look at the ledger, it is hard to make a strong case for a customer community being the one-stop shop for agile consumer insight that it is often sold as.

And as such when clients do request long-term agile research programmes I tend to recommend a hybrid approach, make the most of the customers at your disposal but choose to rely on them for insight only when it won’t compromise the validity of the data you will generate. Or to summarise:

Utilise customer community feedback when:

You want to be efficient, you are looking to gather insight on customer experience or make tactical decisions e.g. naming products and services, tweaking packaging, you want to focus on retention strategy.

Conduct more robust market research using a panel to speak to customers and non-customers alike when:

You want true unbiased feedback, you want to understand how your brand is performing, you want to size markets, assess acquisition opportunities or you want to inform price and positioning strategy