Understanding the Importance of Customer Research

Thereasa Roy
March 14, 2022
Understanding the Importance of Customer Research

You’ve heard the saying “shot in the dark.” That’s as close as you can get to defining marketing without customer research. It’s the way we used to do things. Decide who we think will buy our products or services, and then cast the net wide. Occasionally we’d throw in some brand loyalty research. But most of the strategy came from the minds of guys in suits. 

We’d spend big money on bigger billboards alongside busy highways. Or drop wads of cash on radio and TV ads, based on their viewer stats. But we weren’t targeting one person. We were just hoping that if enough people saw our message, they’d buy from us. 

It worked too. But the cost per customer acquisition was high. You also had to keep thinking up bigger (and more expensive) ways to get eyes on your products. 

It’s a good thing marketing has changed. We’ve got endless inbound, social, and targeting options at our fingertips. We can get our message in front of the right people with pinpoint accuracy. But we still need to know who we are selling to. 

Fortunately, rudimentary primary marketing research has come a long way, and there are now equally high-tech ways to conduct consumer behavior research. Here’s why that matters. 

You Have an Ideal Customer

Even if you don’t know it yet, you have an ideal customer. Out there, walking around right now, is a person who fits your product’s ideal customer profile, and they are more likely to buy from you than anyone else. In fact, they’re not alone. There’s a good chunk of the population out there right now that needs what you do. Even if they don’t know it yet. 

Consumer market research helps you to figure out exactly who they are. Which means you can tailor your marketing and advertising to speak directly to them. More customers mean more profit, and your ideal customers are more likely to buy more frequently. So, you can get repeat business. 

They Have Specific Problems

Effective marketing is about telling your ideal customers how you solve their problems. But you first have to know exactly what those problems are. Then you can tailor your message accordingly. 

The most effective market research for business will confirm that you have product market fit and tell you exactly what your customers’ pain points are. Those are some of the most important sales drivers out there. 

They Care About Some Things More Than Others

Primary marketing research will tell you demographics and other basic information, but you need to dig deeper than that. Every type of customer is driven by something different. Some care primarily about cost. Others want value for money. Still others are looking for status or bragging rights. 

There are all kinds of things that might be driving your customers to make purchasing decisions. Market research will help you to understand what that is. If the people you think are your ideal customer don’t prioritize things the same way you do, you need to adjust your ideal customer. 

They Spend Time in Different Places

Even if you know exactly who your ideal customer is, what matters to them and what their problems are, you still need to put your message in front of them. That means you have to know where to find them. 

Imagine, for example, that you created the perfect marketing campaign, created the best, wittiest billboard ever made. Then you put it alongside the wrong highway. None of your customers drove by, so no one saw your brilliant billboard. 

The concept was brilliant, and it was going to speak directly to the people who need what you do. But you’ve still wasted your money. Genius ad campaigns only work if the right people see them. 

Market research for business should always include information about where your ideal customers hang out. Which social networks do they use? Do they read newspapers or magazines? If so, which ones? Where do they work? Do they live in suburbia, or small towns, or are they downtown city dwellers?

You need to know where to find those people, so you can make sure they see your marketing. 

Which Brands Do They Support Now?

Even if you have a groundbreaking idea, you’re still replacing one or more products or services. Things that might have been around for many years. Those things will also have loyal customers, who believe in the brand, and will take a lot of convincing to try something new and untested. 

Brand loyalty research helps you to understand why your potential customers make the choices they do. Have they had great deals in the past? Is it a brand that their parents trusted, so they stick with it too? When you understand what makes customers buy from your competitors, you can learn how to change their minds. 

Customer Retention Improves Profits

Every business exists to turn a profit. The more profit you can make, the better your business will do. Businesses that hit the winning formula will grow and thrive, while those that don’t will plateau or stagnate. Very often, the difference is repeat business. 

New customers cost up to five times more to woo than existing customers do. So even if you’re nailing your marketing message every single time, if you’re only bringing in new business, you’re going to struggle. 

Which is why it’s so important to keep taking the temperature of your existing customers. This is where you use brand loyalty research in your own business. Make a point of asking customers what they love and don’t. Which products and services delighted them? Which ones would they never buy again (or recommend to a friend?) 

Never assume that because someone bought from you once, they’ll do so again. If you’re not actively focused on customer retention, you could be costing yourself valuable marketing dollars. 

Knowledge Is Still Power

We’ve been saying that knowledge is power for a very long time. Since about 1600 in fact. But we’ve never had more tools at our disposal to get that knowledge. 

At one time, the best way to get customer information was to send people out with clipboards and pens to survey as many people as possible. We would throw things at the wall, as far as marketing and advertising went, and hope something stuck. Then we’d take the things that worked better and do more of them. It was very much trial and error. 

But times have changed. Not only do we have the means to reach much larger groups of people, but we can target the people we reach. They’re also more willing than ever to share information about what they like and don’t like. Just ask anyone who leave reviews on Amazon or Google. 

There’s no reason you can’t capture all that data and use it to create and perfect marketing campaigns that reach the right people. Or make sure that the people who already buy from you buy more. 

So, if you’re not already dedicating marketing and strategy time to customer research, it’s time to start. Because a shot in the dark is never a cost-effective business strategy. Time and effort spent learning who your ideal customers are, what drives them and what they want is an investment. 

Learn how marketers are using Great Question for customer research

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