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For many businesses, rather like the cat in the box scenario, customers often only exist when they can be seen - when interacting with the firm's brand in some way. What they do when they're not directly engaged with a product or service often slides off the radar.

Yet this information can provide as much useful insight as that which comes from analysing interaction with a specific brand.

A growing realisation of this among brand owners means that an increasing number are now seeking to build up a picture of this strand of consumer behaviour.

The information

One way to acquire information about what consumers are doing when they are not interacting with your brand is to commission research, and opting for less traditional research methods can lead to great gains. Bob Crampton, creative director for direct marketing agency The Response Team, which has clients such as Alliance & Leicester, Guinness and Saab, believes that research using traditional techniques is becoming less effective.

"Many marketers also rely on very dull techniques such as Target Group Index and other data-based research to capture information about customers," he says. "The problem is that customers aren't data blocks. They're people."

Crampton prefers more innovative research techniques that have observation at their core, such as immersion, secret cameras, video diaries and even blogs. "I've used visits and documentaries to great effect," he says.

"This is where you visit people's homes and learn about them from what they're not telling you as much as from what they volunteer to tell you."

Another option is to buy existing information, such as that held by loyalty card schemes. Geraldine Tosh is managing director of ipoints, an online loyalty programme. She says: "Because members can earn points by shopping at any partner web site, we build up a rich transactional history for each customer. We supplement this information - about what sites they visit and what they buy - with online surveys about their purchasing intentions, product attitudes and so on."

Similarly, brands can enter into affinity arrangements with each other. Lynn Stevens, managing director of DM service provider Lloyd James Group, explains how these work: "Basically, companies introduce one another to their respective customers. Our recent research shows that more than a quarter of top UK companies' marketing budgets are now being applied to affinity activity. However, it only tends to work where there is a good fit between the partners."

The most popular technique is to append to existing customer information any of the lifestyle data currently available. This allows brand owners to under-stand more about what customers are doing when they are not interacting with their brand. Once they have this information, it can help them in several ways.

The benefits

Suzanne Bates, client partner at data services company ClarityBlue says: "Organisations that understand how consumers are interacting with competing brands are much more able to tailor their offers and messages accordingly and, therefore, are more likely to build brand loyalty." So, the first benefit of this new insight is likely to be customer retention. If you know what your customers are doing outside of their relationship with you, you will have a better chance of knowing when and why they might end the relationship, and so be able to tailor an offer to prevent it from happening.

It can also help you reactivate lapsed customers. Data mining firm Transactis has aggregated the transactional data from around 40 mail order companies, and is now offering this constantly updated database of 25 million unique buyers at £130 per thousand names. Managing director Chris Morris says: "Companies need to get information from many sources if they're going to get a deep understanding of what people are buying and why. This has helped many of our clients understand why lapsed customers stopped buying from them and then enabled them to regain them as customers."

This sort of customer insight can do more than help you retain existing customers and win back old ones. It can also help you win new ones. Ian Robinson, director of insight@tmw, the data and planning arm of direct marketing agency Tullo Marshall Warren, comments: "Adding this extra dimension of what your customers do when they're not buying from you will change the way you view your data. Groups of consumers that once seemed dull become much more interesting once you realise how much they are spending with your competitors."

He goes on to warn that capturing these customers is not so straightforward. "You need to understand why they are using a competitor and use these findings to inform your marketing proposition. To gain real customer insight, you need to identify brand usage and attitudes and then combine it with the detail you already hold on your own database.

Doing this can make the difference between a moderately successful campaign and a very successful one."

It can also help with scoring customers and prospects. Earlier this summer, Experian launched its Lifetime Value Score. It uses up to 6,000 variables from Experian's lifestyle, demographic, transactional, consumer classification and permissible credit data to score individuals according to their future lifetime value to the business. It gives each a score between one and 20.

According to Gillian Buttree, marketing director for Experian's Marketing Services division: "Lifetime Value Score allows companies to score lists to identify the most profitable prospects whose profiles most closely match active top customer profiles and suppress unprofitable prospects. In North America, Lifetime Value Score boosted response rates by up to 20 per cent and improved campaign return on investment by almost 30 per cent."

Finally, gaining a fuller picture of customers' activity can help to guard against complacency. As Matthew Kelleher, sales director at data management company Acxiom argues: "No matter how well established the brand, as soon as complacency sets in, it falls. Companies need to be aware of the views, opinions, and attitudes of their customers and prospects, to ensure they stay one step ahead of the game."

The pitfalls

It is vital, as with any research, to ask the right questions. Steve Mattey, managing director of customer insight consultancy Tree, claims: "Too much research in this area focuses on behaviour, asking people about their hobbies and interests. It's the ubiquitous 'tell us what you're into' question that then allows them to run a promotion on football because 60 per cent of respondents said they like football. It doesn't really get under the consumer's skin the same way that well-executed psychometric research does."

Another mistake commonly made by companies that have recognised the value of this extra dimension to customer insight is to go on a data shopping spree. There is a great deal of information out there and it is possible to spend a great deal of money on it. However, without a strategy and an action plan, it is largely worthless.

Finally, collecting the data is only the beginning; it is essential to manage the data well. "Often, companies don't use the most productive analysis tools," says Jason Goodwin, head of customer intelligence at SAS UK. "To get the most out of their data they should ensure adequate data quality processes are in place, develop or buy in a capability to explore the data using predictive analytics, and measure everything they do with regards to the accuracy of the insights."

The future

This type of research is not cheap, but a growing number of companies are finding that the investment, if managed properly, can be worthwhile.

As Martin Hayward, director of consumer strategies and futures at Dunnhumby, the agency that runs Tesco's Clubcard, concludes: "The real benefit of this type of insight is that it cures brand managers of their myopia.

They remember that shoppers aren't as obsessed by their brands as they are, and they begin to identify the disconnects between their brand's marketing and consumer behaviour. As more brand owners join the dots in this way, we really might see the emergence of a new and exciting world of marketing."

COMMENT ALAN TIMOTHY, CEO, ROCKET SCIENCE

"Analysing your own data is valuable, but only provides you with a two-dimensional view of your customers, based on an internal view of what they are worth to you. To form a three-dimensional view, you need to establish an external view of your data."

LUCY STAFFORD, MEDIA DIRECTOR, TRI-DIRECT

"Probably the best way to gain customer insight is to offer them the opportunity to give you feedback via an incentivised survey. This is strong, opted-in data which is worth its weight in gold if maintained properly."

DAVID COLE, MARKETING DIRECTOR, COAD COLE AND BUREY

"There are valuable, external data sources which can be overlaid against customer files. This data can be sourced externally and then tagged onto a customer database, allowing companies to contact those individuals with different messages and fulfilment options."

GARY BOYS, MANAGING DIRECTOR, GB CONSULTANCY

"Even some of the most famous brands have missed out on market share because they failed to research their customers' buying habits and requirements. Complacency can have a dramatic effect on future aspirations."

TOP TIPS - FOR GAINING CUSTOMER KNOWLEDGE

1. Make more friends: most people form bonds with a closed social group who enjoy doing similar things. Marketers should get out more and mix with a greater range of people

2. Copy Tesco: despite the difficulties in obtaining customer insight, there are some brands out there doing a brilliant job

3. Organise focus groups: the key is to take them to another dimension by giving participants an instamatic camera and getting them to record a photo diary of their lives, their children, their pets, where they shop, even what they watch on the television

4. Find out the attitudes that underpin the behaviour: explore why certain things are important to them, whether they prefer EastEnders or Corrie, how they feel when they do the weekly food shop

5. Employ older planners: when it comes to consumer insight and campaign planning, you need people who have been around the block a few times, have a wider range of life experiences and can empathise more readily with people from various backgrounds

6. Listen to strangers' conversations: whenever you're waiting for a train or queuing to pay for shopping, just open up your ears and eyes to soak up what's going on around you

7. Don't obsess about the numbers: it's not just about stats and number crunching. You have to really look at the world. Too many marketers never get down to the ground and really learn about their targets

8. Don't stop: you need to work at building consumer insight every day of your life

9. Build up a two-way dialogue: set up your own customer-focus panel, ideally a web-based one so you can gauge views and feedback immediately. If this isn't possible, then make sure there is some way of receiving customer feedback either via a survey or a suggestion box 10Respond: once you've built up customer insight, work with it, bring emotional as well as practical elements into your direct marketing and build opportunities to do something that really resonates

Heather Westgate, MD of direct marketing agency TDA

CASE STUDY - DIRECT WINES

Direct Wines, under the Laithwaites brand, sells wine to consumers through mail order. It offers a low-cost entry product, and customers only become profitable once they have been upsold onto a higher value product. However, the company found that many of its customers were not making this journey and were instead lapsing.

When it called in data mining company Transactis, Direct Wines had a database of about one million lapsed customers and it needed to know which of them should be the highest priority for reactivation direct marketing campaigns.

Its existing modelling was based on purchase behaviour within a four-year period, but this information was largely out of date, and only related to how those customers had interacted with Direct Wines.

Transactis matched the file of lapsed customers against purchase activity on its TransAction database of 25 million regular mail order buyers. The database is updated every weekend with up to three million new mail order transactions. This information enabled Direct Wines to identify and mail those lapsed customers who had recently bought products using mail order and who showed similar lifestage and buying habits to Direct Wines customers who had bought from the company within the past year.

Alex Fraser, marketing director at Direct Wines, says: "We supply Transactis with our customers who have had no activity with us for the past four years. Through the work that Transactis has done we have been able to profitably mail customers who we would normally disregard. In some cases, response to these mailings has outperformed that from our mailings to more recent customers."