In the dynamic realm of being a data-driven and customer-centric business, gaining insights into your customers’ preferences and behavior is pivotal for success. When it comes to these insights, there are two primary categories: actionable and observational. Both are valuable and they each bring something to the table. However, it’s not always easy to distinguish between the two; especially while in the weeds of gathering and analyzing data.
While both are valuable, they both serve distinctly different purposes. On one hand, you have actionable insights that guide strategic and tactical decision making. They can have an immediate impact and serve as next-step indicators. On the other hand, observational insights are more about situational and environmental understandings. They help identify opportunities, expose blind spots, and provide contextual details. Again, both are valuable, but they serve different purposes.
Before launching a customer insights project, it’s important to recognize these differences and determine which type is better suited for your goals and objectives. It’s common to seek actionable insights, yet end up producing observations. This typically becomes clear only after data has been gathered and analyzed, which leads to frustration and disappointment. So, to help maximize the impact and efficiency of your next customer insights project, here are a few things to know:
Imagine actionable insights as the “doers” of the customer insights world. These insights provide specific, concrete information that you can act on immediately. They are like signposts pointing you in the right direction, helping you make informed decisions. Actionable insights offer a clear roadmap for improving products, services, and customer experiences.
Clarity and Precision: Actionable insights are crystal clear. They provide specific information about what your customers want or need. For example, if you discover that customers are struggling with a particular feature, you know exactly what to fix.
Efficiency Boost: Actionable insights save you time and resources. You’re not making guesses or taking shots in the dark; you’re focusing your efforts on strategies likely to bring positive results.
Customer-Centric Approach: Acting on actionable insights shows your customers that you’re actively listening and responding to their needs. This can foster trust and loyalty, strengthening your customer relationships.
On the other hand, observational insights are more like the “watchers.” They involve collecting data on customer behavior and actions without necessarily explaining the “why” behind those behaviors. These insights require further analysis and interpretation to transform them into actionable changes.
Trendspotting: Observational insights are like trend scouts. They help you identify emerging patterns and trends that may not be immediately obvious. This information can be invaluable for long-term strategic planning.
Hypothesis Generation: These insights often serve as the starting point for deeper investigations. You can use them to formulate hypotheses that can be tested through more specific research or analysis.
Holistic Understanding: Sometimes, it’s essential to see the bigger picture. Observational insights contribute to a more comprehensive understanding of your customers’ behaviors and preferences, even if you don’t have all the answers about why they act that way.
Once you have a firm grasp on the “what” and “why” of these insight categories, the big question becomes – when should you use each type of insight?
In general, when you have a clearly defined decision to be made, challenge to address, or objective to achieve, focus on actionable insights. When you want to uncover long-term trends, identify hidden patterns, or are willing to invest time and resources in deeper analysis, this is where observational insights come into play.
In the realm of customer insights, actionable and observational insights are like two sides of the same coin. Both are valuable, and the best strategies often involve a combination of both types. By understanding when and how to use each, you can create a well-rounded approach to understanding their customers, leading to more informed decisions, enhanced products and services, and ultimately, happier customers.
If you’re interested in learning more about this “actionable vs observational” topic, I’d love to chat! I love talking about this stuff, so please reach out any time and we can keep the discussion going.