With the rising importance of data-driven marketing, market research is one way that marketers can make more strategic decisions, helping them to create products and services that fully meet customer needs.
From identifying opportunities and threats, to understanding what influences customer attitudes – there are many reasons to undertake market research. But how is research applied in marketing?
Here are five approaches highlighted in Econsultancy’s ‘Getting to Grips with Market Research’ Best Practice Guide. Subscribers can read it in full to find out more.
Defining an audience demographic is one of the first and most important components of market research. It’s impossible to target everyone, so who exactly should you be targeting, and how?
Creating personas is a useful way of profiling customers, bringing various customer segments to life and forming the basis of customer journey mapping. This process involves determining customers’ motivations, frustrations, and influences, in order to help narrow down what it is they want from a brand and its product or service.
Alongside this, market segmentation involves asking customers about their demographics, values, attitudes, and behaviours. Together, these processes can help identify the customers that are the most profitable or who have the most potential for growth.
As well as researching how customers perceive your own company, it can also be helpful to understand how they view the competition. This allows marketers to exploit any strengths or weaknesses, as well as to apply learnings to an existing product or service.
When conducting competitor research, it can also be helpful to categorise competitors into various levels such as primary or secondary competition (according to factors such as whether you have the exact same audience, or share a particular demographic, etc.)
Questions to consider asking during research include: what is the competition doing better, and have they made any mistakes we can learn from?
When it comes to securing investment or funding, market sizing can be a particularly useful type of research, especially in the early days of development.
Essentially, market sizing tells you if there are enough customers to make money from and how much revenue can be made. It also factors in a company’s share of the market and how many customers it can potentially reach.
Due to market fluctuations and consumer behaviour changing on a regular and rapid basis, it is advisable to conduct this type of research regularly.
Customer satisfaction research
One of the main reasons to undertake customer satisfaction research is to inform or develop loyalty programmes, which can in turn drive customer retention.
Net Promotor Score (NPS) is an effective customer experience metric to use, as it segments customers by loyalty, and identifies satisfied and at-risk customers.
As Econsultancy’s Deputy Editor Rebecca Sentance outlines: “One of the reasons that Net Promoter Score (NPS) is so valued by businesses is that it can give insights into how customers interact with your business, and the actions they are likely to take – such as repeat purchases or re-bookings, recommendations to a friend, trying new product offers, and so on.”
As such, it can help marketers plan how to target customers based on a specific outcome, such as retaining them, winning them back, or improving their experience.
Customer/user experience research
User and customer experience research revolves around how customers interact with a business in all aspects. This extends to products, services, website, applications, software, and so on.
One example would be to test the ease of a website navigation, or how seamless the checkout process is.
In today’s multichannel world, it is just as important to test offline experiences too, which could involve anything from customer service telephone calls to product packaging.
This type of research helps to determine what is working and what isn’t. In turn, marketers can use this insight to improve strategy and ultimately enhance the user/customer experience.
Product & ad testing
Product research involves testing new features and gathering feedback from an audience; this helps businesses to identify what to feature and what not to feature when it goes to market.
Product testing can also help to find out which features are most important to an audience, as well as how to tailor messaging to enhance positive audience perception. In this sense, it is more specific than user experience testing, which is more about how a customer perceives an existing or previous product or service (as opposed to a future update or release).
This also applies to ad testing, whereby audiences are shown campaigns before they launch in order to test the messaging and creative involved, ensuring that budgets are not wasted.
For more on this topic, subscribers can check out Econsultancy’s Getting to Grips with Market Research report in full.