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Think you Don't Need Customer Research? It's Time to Think Again...
It shines a spotlight on customer problems, makes strategic decision-making easier and provides a framework for improving customer satisfaction and sales. Yet, despite the pay offs, some organisations still won’t entertain the idea of customer research.
If you’ve caught yourself saying any of the following, it might be time to think again:
‘We have one type of customer, and we know what they want’
A few decades ago, pitching your product or service to one kind of customer was the norm – car adverts were pitched at suited middle-aged men, kitchen and laundry products at overjoyed housewives – but those days are gone. Brands that appeal to a single customer profile are extremely rare, as it is much more usual to have customer groups comprising different genders, ages, ethnicities and backgrounds.
Whether you sell insurance or flat-pack furniture, to satisfy customers it is important understand your customer groups’ needs and the unique characteristics of their purchasing behaviour. Age is one factor that affects consumer behaviour significantly and we’re increasingly being asked to conduct multi-generational research, targeting what different generational groups expect from a company’s offering, in particular focussing on the four categories with the most (and potential) spend power: Baby Boomers, Generation X, Millennials (also known as Generation Y) and up-coming Generation Z, comprising people born in and after 1996.
Individuals in each generation have a distinct set of values, experiences and expectations that influence the the way they buy. Knowing what these are, and what draws them to (or turns them away) from your brand, helps inform your approach, enabling you to market and sell across generations effectively. One distinct generational marker is the use of technology and its impact on the customer experience. Millennials and Generation Z, who have grown up with online access, are adept at using several communication channels at once and expect brands to have the infrastructure in place to switch between them effortlessly. On the other hand, Generation X has adapted to using technology for brand interactions, and while they use it, they also appreciate the old-school way of doing things, such as calling or speaking in person to company representatives.
Tapping into each customer group’s expectations is a must for brands who want to maintain relevance and appeal in today’s market.
Recommended Research: Customer Research Gap Analysis
Quality gap analysis is a key tool for discovering which product/service attributes your customer groups’ value the most and how those attributes measure up. The process enables you to:
- Identify specific customer demographics to target, considering factors such as age, gender, location, income, education, occupation and ethnic background
- Pinpoint customers’ expectations of your offering, from the channels they prefer, and service features they want, to what would motivate them to buy from you again
- Compare customer expectations with their perceptions of the product/service provided, exposing where and why ‘gaps’ occur
- Action improvements to close service gaps, helping realise a customer experience aligned to your customers’ expectations, maximising its appeal to existing and potential customers
‘All our customers are based locally/UK-based, we don’t need to know what customers elsewhere want’
You’re missing out on a highly profitable trick! The internet has created a global marketplace where, if you have an online business presence – which virtually everyone has – people can view your offering from anywhere in the world. Once local shops and suppliers were visited by people in a five to ten-mile radius, but Google search has made it possible for prospective customers in neighbouring counties, regions, and even countries size up and buy your products and solutions.
Customer research takes the ‘unknown’ out of expansion strategy planning, supporting informed decision making and ensuring investment in business areas and functions that will see the best return. One way to test the viability of new markets is to extend your research boundaries, gathering feedback from prospective customers in different geographical territories. Or, if you already undertake mass quantitative market research – survey data where respondents give clear ‘tick a box’ answers – combine it with exploratory qualitative research. For example, this might involve holding focus groups comprising local consumers and stakeholders in different locations to find out enablers and barriers to market entry.
Recommended Research: Multi-region Customer Research/UK-wide Customer Research/International Customer Research
Extending customer research to incorporate different relevant geographical areas will help identify viable new regional and overseas markets, as well as:
- Uncover customer segments to target in different locations and their expectations of your product and services
- Assess adequacy of current business practices and what enhancements are needed to attract and convert new customers, such as geographically targeted marketing campaigns, alternate product features, or new billing and delivery systems
- Discover how your brand compares to other suppliers or service providers in the same field and how you differ, allowing you to build on existing services, or create compelling new ones, making you stand out
‘We sell low margin, high volume goods, customer attrition is part of our business model’
If you’re part of a low margin, high volume goods business, such as e-commerce, you will know that high customer attrition or churn – where customers buy once and don’t return – goes hand in hand with this model. But while customer churn is generally seen as a negative business trait, for low margin companies it seems to carry less weight. This is because the focus is on purely selling, namely offering lots of low-price deals to tempt bargain-hungry customers, of which there are plenty. So, if the system works, why do you need customer research?
Even though selling mass products with a marginal mark-up has an attentive audience, staying profitable means keeping sales turnover high, which takes effort. And while customers appreciate a bargain, if customer service isn’t up to scratch, they are unlikely to return, and may even use social media to warn others, blocking further sales. Research into the overall customer experience will flag customer problems in the purchase cycle. As well as alleviating churn, as customers who get better customer service are more likely to purchase from you again, happy customers are likely to recommend you to others, attracting more sales.
Low margin businesses are also highly competitive. If a competitor offers same/similar products for less, customers are going to head that way. Knowing how your goods, customer service and pricing compare to rivals, will tell you where improvements are needed to get ahead. And while margins are tight, research programmes can be tailored to suit every budget, with ROI coming in the form of higher customer satisfaction and repeat sales.
Recommended Research: Customer Satisfaction Research/Customer Satisfaction Indexing (CSI) Research and Competitor Research
With the foundation for a successful sales model in place, Customer Satisfaction and CSI Research will help:
- Reveal on-trend products and services customers want now and, in the future
- Flag which customer-facing processes work, e.g. next day delivery, and which ones need improving, e.g. better customer returns, smoother online shopping experience, improved communication around delivery, in turn enhancing the customer experience and generating repeat sales
- Anticipate customers’ needs – especially important for retail and wholesale – by finding out what service features consumers want you can implement profitable add-ons, for example, suggesting other relevant products at point of purchase, increasing basket spend
- Increase customer retention, in turn reducing spend on marketing and sales activities to find new pools of customers
‘Our high margin, low volume product/service is only used by a few customers’
Providers of high margin, low volume services and solutions, such as a luxury holiday agents and retailers of high-end jewellery, antiques and home technology, often pass on customer research in the belief that their target audience is so small, it would be impossible to find a large enough sample enough to give reliable results. The same applies to businesses pitching a product or service to niche market segments, for example, a supplier of 100% sustainable baby clothing seeking feedback from new parents.
Professional market research agencies, including TTi Global, have access to rigorously profiled panels of respondents that can provide insightful feedback on any kind of brand, including those appealing to high-end and highly focussed niche markets.
Recommended Research: Customer Satisfaction Research/CSI Research/Customer Focus Groups
These types of research are ideal for start-ups and established companies in exclusive and niche markets, allowing them to:
- Target the right customer segments and convey the right messages to attract and convert buyers
- Understand their unique customer base, what they want and what they value, helping create a meaningful end-to-end customer experience that ticks every box
- Establish values that resonate with their target customers, such as a strong reputation, commitment to product quality and design, attentive customer service, knowledgeable staff etc. justifying a higher price point, while also driving up customer satisfaction and loyalty metrics
- Benchmark competitors’ performance, uncovering where to differentiate with value-added services/product features to set them apart from competitors
How can we help?
If you’d like to know more about how our leading customer research services can improve your business, contact us today.