You’ve been told left and right that the stepping stone in enabling business growth is meeting your customers’ needs. After all, they are the lifeblood of your business, aren’t they?
Well, it sounds excellent in theory.
However, humans are fickle beings. We make emotional decisions, get offended easily, and, most of the time, we don’t even know what we want.
How can a brand meet our needs when most of the time, we aren’t even aware of them?
The key lies in understanding your customers, which is half the job.
And this understanding is achieved through thorough Customer Research. The fascinating part of every marketing strategy is that it can place your business lightyears ahead of the competition.
Yes, Customer Research isn’t a piece of cake. But what is?
If you’re looking for consumer research methods or need help with your research process, you’re in the right place.
Read this handy guide on customer research and discover the most common research methods, the benefits of this process, and helpful tips to get you started.
What is Customer Research?
Customer Research (also known as Consumer Research) represents the act of applying research techniques to uncover customer segments, needs, and behaviors.
The ultimate purpose of customer research is to understand customer psychology and create detailed purchasing behavior profiles of your target audience.
Ultimately, Customer Research empowers you to grow your sales and improve your overall operations.
Importance of Customer Research
Customer Research is critical in eCommerce.
As David Ogilvy beautifully explains: “people who ignore research are as dangerous as generals who ignore decodes of enemy signals.”
→ Customer Research provides an in-depth understanding of your customers’ behavior.
→ This understanding translates into effective eCommerce strategies.
→ Effective eComm strategies mean profits and a way out of the surging acquisition costs and the third-party data extinction.
Tl;dr: customer research is the first step towards thriving in an increasingly competitive and challenging market.
Customer research, the actionable insights derived from your survey data, and the strategies you’re implementing bring numerous benefits to your eCommerce business.
- Customer Research helps you become customer-centric.
Professional business people say sales are the lifeblood of every business. We say customers are the lifeblood of your business, as organizations crash and burn when they ignore customer satisfaction.
Customer research uncovers the ingredients that create exceptional customer experiences and gives you all the weapons you need to survive the eCommerce bloodbath we see these days.
Use the insights generated from your research to create retention strategies that keep your customers happy and returning.
- With Customer Research, you keep your eye on the prize.
The larger the business, the more stakeholders (and opinions) you will have to hear. Even in small organizations, each department will try to push its own agenda since each department comes with its KPIs and goals.
However, customer research combined with customer segmentation uncovers the clear-cut priorities inside the organization.
While inside input is important for a business, outside information is critical.
The insights from user research decide how people inside the business spend their time.
- Customer Research keeps you in the game.
Some organizations follow rigorous systems and lack the agility to adapt to market trends. While long-term planning is crucial for healthy growth, a lack of agility can take businesses out of the game.
You must be aware that the market changes as quickly as trends. You must adapt if you want to evolve and surpass your competition.
Customer research helps you keep in touch with new tech and tools to keep your customers happy.
- Customer Research gives you direction and clarity.
There’s nothing worse than letting inertia decide your growth or turning your back on your customers.
In reality, there are few industries where you can survive, even if you don’t care about your customers.
One example could be cable service providers, infamous for horrible customer care, yet they survive. But only because it’s a challenging sector for newcomers and a couple of companies monopolize the market.
For the rest of the business sectors – and painfully true to eCommerce – you have to accommodate customers’ needs and nurture their loyalty,
Customer Research empowers you to understand how your brand is received through the eyes of your customers.
Hyper-target your research to your ideal customers, and you clearly understand the strategies or developments you need to embark on.
For example, you can research your customers using the Net Promoter Score and uncover priceless opportunities for improvement.
The NPS shows how many of your customers are willing to recommend you to their peers. Low scores highlight the areas you need to work on, while high scores signal you’re on the right track.
- With thorough Customer Research, you cut down the risks.
Today’s zeitgeist is not necessarily the best time to take bold risks and reinvent the wheel in eCommerce. Many organizations alienate their customers by over-developing their products without listening to the voice of the customer.
Don’t be like them. Be a company obsessed with getting customer feedback and doing your research before any vital business decision.
Types of Customer Research
Customer Research is more than just paying for survey software, conducting persona research, or looking at customer data.
The idea with Customer Research is finding meaning inside of your data and getting actionable insights out of your research methods.
Let’s look at the most used types of customer research and the idea behind each one.
With quantitative research, you mainly look at your customer data and derive insights from it.
Unlike other types of research in this article, quantitative research is purely numerical. You look at the numbers, find the patterns, then draw a map for the behavior of your customer base.
Since quantitative customer research is based on facts, it’s a pretty straightforward approach.
This step should generate statistical data on the following:
- how old your customers are,
- their location,
- the average time between their transactions,
- their monetary value,
- the products they buy, etc.
You can conduct this customer research method by sending customer surveys. However, you’ll need a large number of respondents to drive valid results and correctly identify market trends.
You will also need a data analyst to ensure your conclusions are pertinent and the insights you derive from the numbers are valid and reliable.
If quantitative research focuses on large numbers, qualitative research takes a different approach. It mainly uncovers the human aspect of your customer base: people and their feelings.
We all know that joke:
You can’t know if something is wrong in any relationship unless you ask. It also applies inside the eCommerce space, where a customer survey simply isn’t enough to give you a complete answer.
Trying to save a relationship by asking questions is an instinct that comes naturally.
The problem is that sometimes, in eCommerce, we tend to ignore that we have relationships with people – not mere customers. So customers tend to become a symbol, a synonym for the ATM or the quarterly numbers.
It also works the other way around. The business becomes something abstract for your customers, an online shop or a website interface. Your existing customer must feel a real connection between you and them, not a mere transactional interaction.
For this reason alone, we must remind ourselves that we’re addressing people – not customers. All our marketing efforts are sent toward humans, not Social Media users.
Qualitative research will unveil many precious insights and eliminate assumptions about your customers’ motives and challenges.
At the same time, qualitative data can also help with competitive analysis.
This type of research gives you a deeper glimpse into customer behavior. You can include a research question regarding your top competitors and get valuable feedback about their strong and weak points.
There are many methods for qualitative research.
You can use a survey template and send out online surveys to take a quick glance at your customer base. You can also conduct lengthy interviews with a targeted customer from each segment.
You can also use support tickets & live-chat transcripts to get actionable insights. However, this method can become tedious over time.
Some methods will be more suitable, depending on your years of experience, your presence in the market, the company size, and the industry.
Whichever method you prefer, keep in mind that qualitative research aims to uncover the differences between different motives, barriers, and customer segments.
One research example and methodology that stood the test of time is the Jobs To be Done methodology, created by Bob Moesta.
The JTBD consists of customer interviews that uncover the following:
- the desired outcome of your customers
- the challenges they encounter
- the context in which they decided to buy
- the red flags that would cause customer churn.
The JTBD methodology is a fascinating subject and a reliable pillar in improving customer lifetime value. If you want to learn more about Moesta’s methodology, enroll in the CVO Academy today and learn about JTBD from Bob Moesta himself!
Check out the Academy here.
Secondary research is worth mentioning because, in many cases, it cuts down half of your work.
This research method uses insights and statistics from other agencies or companies specialized in market research.
Secondary research provides an excellent bird’s eye view of market trends inside your vertical. You can use it to study general customer behavior. At the same time, you can use it to research the buyer persona and uncover the general traits of your persona.
However, since this research isn’t tailored to your needs and interests, you can’t count on it to generate actionable insights from the data.
However, it’s a great starting point. It helps you understand external trends and behaviors that are out of your control – such as seasonality, market patterns, or global trends.
Observational Research lets you observe your customers in the customer journey without intervening.
This type of research provides unbiased behavioral data, as it gatherers insights outside of focus groups or organized settings for collecting feedback.
Use observational research to identify how customers relate to your product in the most unintrusive way. Since website visitors and customers don’t need to do anything for this research, they won’t be bothered by it.
As for the “how” for offline locations, observational research is straightforward. You can simply place a mystery client inside the area and watch the visitors interact with your products and employees.
You can use research tools such as heatmaps to track consumer behavior for online shops.
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Conducting Customer Research without Falling into a Data Rabbit Hole
When insights are fascinating, and data keeps coming, you risk falling into a rabbit hole.
It’s like reading Wikipedia: you start researching a date, one click leads to another, and soon enough, you catch yourself researching bizarre events happening in the Middle Ages.
Customer research aims to understand what makes customers tick, then apply this information to attract other potential customers while retaining the ones you have.
Customer Research has generated action and change. Here’s how you conduct research that matters and uncover actionable insights inside a sea of data.
- Set your objectives beforehand.
One strategy that keeps you on track with Customer Research is to set objectives and deadlines for yourself even before you start the process of user research.
Remember the SMART principle: your objectives need to be specific, measurable, achievable, relevant, and time-bound.
Decide what you’re doing, how you will do it, and how much it will take, then set a timeline you’ll need to follow.
- Write down everything.
To avoid getting get sidetracked, take notes of everything you need in this process. Ensure you include the data you’ll need, your data collection method, and your data analysis steps.
- Choose your sources wisely.
Many researchers face the risk of chasing shadows because they pick low-quality sources. Ensure your sources are valid (logical and unbiased), accurate, reliable, and timely (current).
- Decide on Research Channels.
You can conduct Customer Research through interviews, surveys, focus groups, etc.
Having multiple methods of research might seem overwhelming. However, you need multiple communication channels to get qualitative and quantitative insights.
At the same time, the more channels you use, the more chances you have of reaching a sufficient sample size and ensuring the insights are statistically relevant.
- Limit your questions to the most important ones.
You can ask your target audience a plethora of questions, but not all are relevant at any given time. Besides, convincing people to fill out surveys or answer interview questions can be challenging.
So, limit your questions, and focus on getting the information that makes business sense. You can also adapt your questions for different customer segments, which ensures you get multiple perspectives and a detailed picture of your business.
- Drawing relevant conclusions.
Even if conducted with complete accuracy, your customer research insights can be misleading.
Identify recurring themes in your findings. Look for repeat patterns in trends, challenges, and opportunities that you observed in your research and note them down.
Sort your findings according to the frequency in which they appear.
The more often you see an issue, the more critical it is to address.
Following the same logic, the more often you see your customers express specific ideas, the quicker you have to put them to use in your marketing strategies.
Whether a data-driven professional or a creative prodigy, customer research is your Hail Mary in today’s challenging eCommerce environment.
There’s no way to go around it.
Customer research will bring you the insights you need, decide your priorities and empower you to unlock your full potential inside the organization.
However, like any other aspect of the Customer Value Optimization methodology, you need to follow the research with action and turn the new insights you uncovered into a growth plan.
Remember that your primary goals as an eComm business should be longer retention and smarter acquisition. One brings long-term results, while the other provides the quick wins you need to keep your organization afloat.
So your research should revolve around these two objectives: learn what makes people buy and what makes them stay.
Then apply these findings every day inside your business – and this is where research pays off.
Frequently Asked Questions on Customer Research
Customer Research means applying research techniques to uncover customer segments, needs, and behaviors. The purpose of Customer Research is to understand customer psychology and create detailed purchasing behavior profiles of your target audience.
Customer Researched is also known as Consumer Research. Customer Research empowers you to grow your sales and improve your overall operations.
Customer Research should include both surveys sent out to your customers base (to get you quantitative data), and interviews with targeted customers from each customer segment (to bring you qualitative data).