How Consumer Insights help brands cut costs during COVID-19

Welcome to 2020 where a pandemic and potential global recession are driving uncertainty and leading business leaders to examine their P&Ls and spending.

But it’s not all doom and gloom.

In this age of social distancing, we also find ourselves in the age of data, analytics and consumer insights.

Every single day, humans produce 2.5 quintillion bytes of data. (That’s 2.5 with 18 zeros after it!)

Now more than ever, we have massive amounts of actionable information to drive intelligent decisions. We have access to detailed consumer insights—and not just in organisations with multi-million dollar technology or specialised teams! Investing a little now in your brand and gauging sentiment of your customers can and will pay dividends in the longer term.

Brand consultant and now virtual marketing professor Mark Ritson reinforces this theory. With a Covid-19 recession very likely, marketers should be focusing on brand equity and advertising spend to grow their businesses, Ritson claims.

“Brands are not much defence when the shit hits the fan, but brands and brand equity are useful in the second phase where we begin to see, at the end of the recession, a move towards growth and normality. The acceleration of a strong brand is much greater than less strong brands – that’s why you should invest in them in a recession, because they will return in terms of a growth catalyst as we come out of it.”

Mark Ritson, Virtual Marketing Professor

For cash-strapped businesses (or those wanting to be a little more cautious in an era of turmoil), leveraging consumer insights presents an incredible opportunity to save and spend wisely.

For example, when Netflix utilized Big Data and consumer insights, they saved $1B per year in customer retention costs because they knew precisely where to spend and where to trim.

Even if your business doesn’t have near the spending of a company like Netflix, you are not immune from the positive effects of data and consumer insights: you can, according to one conservative estimate, lower your costs by 10%.

But that’s just the beginning. 

Consumer insights provide data-driven answers to questions like:

• Are your customers financially affected by the economic impact of COVID-19?
• What are your customers doing differently?
• Should you lower your marketing spend—or redirect it to new platforms?
• Is this the time to roll out a new product or service?
• What are your customers looking for in brands during a time of massive change?

By knowing the answers to these questions—or those that are relevant to your business—you can discover what’s working, where to focus your energy and ultimately where to spend, cut and save.

Where To Look First For Cost Saving Opportunities

Every brand, business leader and entrepreneur should first ask: is it time to focus on acquiring customers—or obsess over retaining existing customers?

Because, without customers, cost-cutting becomes unnecessary; you won’t have a business, so start here.

Using consumer insights, your acquisition vs. retention choice won’t come down to gut feelings or a vague understanding from a few Zoom calls, emails or client lunches.

Instead, you’ll get data-backed answers to:

• Is there a new group of consumers you should be targeting with a lower cost of acquisition?
• Do you need to make changes to your pricing because consumers are now price-sensitive?
• Are your customers no longer paying attention to a social channel you spend thousands on each month?
• What part of the customer experience matters to your customers—and what’s unnecessary?
• Are certain customer segments not worth the cost of retention?

Of course, it’s not just about asking questions or gathering heaps of data. It’s about using those questions and data to take action.

If research shows retention is your best bet, it leads to actions like:

• Special customer perks, gifts and recognition
• VIP pricing for renewals
• More frequent marketing communication
• Personalized account management check-ins
• Ad retargeting to stay top-of-mind
• Renegotiating your SaaS subscriptions

Or, if acquisition is your opportunity, you might take action and:

• Identify unnecessary acquisition expenses
• Cut spending on underperforming channels
• Reach out to new customer segments
• Strategize high-ROI marketing campaigns
• Refocus your team’s efforts on acquisition
• Go after competitors’ customers

No matter the action you take, you’ll have what few other business leaders enjoy right now: peace of mind in knowing that your decisions are based on data and reality.

How You Can Lower Costs Now

The transformations that might’ve come in 2030 or 2040—like reliance on e-commerce, shifts in consumer priorities, and location-independent work—have been fast-tracked to today. They bring new costs and challenges.

But, again, it’s not all doom and gloom.

Businesses of every size and industry can tap into data, analytics and consumer insights—without making a single new hire or going back to university—to bring efficiency and cost savings.

Insights Exchange provides vetted, trusted consumer insights experts who bring high-ROI insight without the cost of a consumer insights agency—or the costly errors of gut feel.

With transparency and data-driven decisions, organisations can spot growth and savings opportunities, regain confidence and define the pandemic as a time of potential.