Information about market trends are everywhere, but by the time conventional media reports, it is usually out of date. The reason is that the most up-to-date insights on consumer trends can be generated from data created by consumers themselves.
Social media, review sites, eCommerce pages all contain a wealth of data that is updated by the minute. Although this is often referred to as “alternative data” it is becoming increasingly mainstream. Alternative data collection is done through web scraping proxies and analyzed to create consumer insights.
What Are Consumer Insights?
Consumer insights are a guide to how customers think or feel about a particular product or brand. The process of generating consumer insights begins with collecting data, analysing it, and drawing conclusions. These insights form the roadmap for marketing efforts and product upgrades.
What Is Alternative Data?
Alternative data is a term used often in finance to denote non-corporate or unofficial data. In eCommerce marketing, it also refers to unofficial data, but in particular, data that is user-generated. Alternative data can also apply to unconventional data sources, such as film from in-store cameras of customers to observe their shopping habits.
User-generated alternative data is everywhere online. Think about how much time people spend on social media. It is considered a routine to check reviews before making even minor purchases. Customer service chats, like conversations from call centers, are monitored for quality purposes. This data is created by potential customers and is more direct, fresh, and honest than published market projections.
How To Obtain Alternative Data
Countless pages of text contain publicly available data. To collect the data, the text needs to be retrieved through web scraping. This involves using a special tool to lift HTML code from websites and store the information in a database.
After the data is stored, it is cleaned up and analyzed. Marketers generate consumer insights from this process. These insights give guidance on how to innovate products and focus on marketing efforts. The following are ways alternative data can be found and applied.
- Monitor Competitor Reviews Across Various Platforms
Companies should keep tabs on reviews from their customers, but it is also important to pay attention to competitor reviews. It isn’t enough to check in once in a while but to monitor competitor reviews on an ongoing basis across various platforms.
If reviewers complain that a competitor doesn’t have enough color choices for a certain item, this is a clue to offer the same item available in more colours. Similarly, if customers praise a rival and say they have the best customer service in the industry, this is a hint to ensure customers are getting enough attention and prompt, courteous service. Keeping track of competitor reviews and mentions on social media is simple with tools that deliver updates daily.
- Shape New Habits with Innovative Offerings
If there is a trend in a certain direction, alternative data helps provide information for seizing opportunities. Social media shows topics people are talking about and which memes and updates garner likes and shares. Social media monitoring generates new ideas for innovative features that appeal to consumers.
- Analysing Text to Understand Sentiment
Reading texts of social media comments and reviews about one’s brand and competitors is informative and valuable for guiding strategy. Analyzing and deriving consumer insights is essential. However, reading infinite pages of text is laborious and, given the automated tools available, no longer necessary.
Sentiment analysis tools can cut reading time and provide insight into how customers feel about products, services, and those of competitors. In a matter of minutes, tools can run through reams of text and evaluate mood and feeling. They produce sentiment ratings that range from very positive to very negative and many gradations in between. This aggregates qualitative feedback into actionable ratings of how customers feel.
- Automate Pricing Strategy
Battles over pricing between rivals become fast-paced and intense. This is not surprising, since many consumers base their final decisions on which products to buy on prices. Companies are pressured to price items low enough to sell but sufficiently high to make a profit. Knowing how rivals are pricing is essential.
The difficulty with pricing is that it can be altered instantly. A competitor can release a promotion without rivals knowing and there could be a price war while business owners sleep. Automated tools adjust pricing at the right level to get a competitive edge and still stay afloat. These tools monitor competitors and set prices according to the new activity which is essential for staying ahead of the game.
Know Your Customer and Competitor
The adage “knowledge is power” applies to marketing, but not all knowledge is useful. Old-fashioned data sources, such as news articles about market trends are often already stale by the time they are published. Alternative data offers a clear and dynamic picture of customer sentiment and competitor strengths and weaknesses.
Gaining access to alternative data on an ongoing basis is a must or every business. Analysing the data, creating consumer insights, and upgrading products or marketing strategies based on updated information is essential for maintaining a competitive edge and increasing brand prestige.