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Market Research for Customer Insights

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What is market research?

Market research is the process of collecting information on behaviors, preferences, and trends within a consumer group, category, or market. Typically, market research studies are conducted when organizations want to understand industry and customer dynamics so they can inform product development and go-to-market strategies, drive and retain revenue, and avoid the high cost of taking the business in the wrong direction.

Market research studies explore conditions within and outside an organization, such as economic, technological, and competitive trends. As such, market research programs can encompass Voice of Customer or user research, but often include feedback from respondents other than current customers. User research focuses on observed behavior, whereas market research also gathers and evaluates opinions, perceptions, and experiences.

Common questions to be answered by market research may include:

  • How large is the market for my product/service?
  • How does my brand compare to others in the market?
  • Who is most likely to buy my product/services?
  • What product features and/or services are most important to current or potential buyers?
  • What campaigns or offers will resonate best with my target audience?
  • How do buyer preferences change over time, and how can my brand keep up and respond in a timely manner?

Types of market research

Market research studies gather data and analyze insights from a variety of sources using numerous methodologies and tools.

Primary vs. secondary market research

Primary market research collects original data, typically by going directly to the source of the information and conducting your own analysis. You can also use secondary sources – published research from a government agency or industry association, for example – to inform market research studies. 

While secondary research can alert market researchers to emerging trends or potential concerns, only primary research can tell you to what extent those things impact your own customers and the ways they interact with your specific products and services.

Qualitative vs. quantitative market research

Market researchers often engage in qualitative studies such as In-Depth-Interviews (IDIs) and focus groups. Qualitative market research doesn’t have to involve a live conversation, however. It can also incorporate verbatims from open-ended survey questions as well as unmoderated discussions in forums, diary studies, or videos. Qualitative market research allows for two-way engagement between the researcher and the respondent, which is often necessary to clarify meaning and develop a deeper level of empathy. That doesn’t mean qualitative market research has no structure; rather, it’s incumbent on the market researcher to devise meaningful scenarios and ask next-level questions to uncover the insights they need to inform decisions.

In contrast, quantitative market research typically uses techniques such as surveys, polls, or questionnaires. Unlike open-ended qualitative market research questions, quantitative methods start with a hypothesis in mind that researchers attempt to prove or disprove. As such, respondents are asked to choose from a predetermined set of answers, rather than provide their own responses. Each answer is given a value and data collected is evaluated mathematically. With quantitative research, there is less opportunity for follow-up questions and ongoing engagement between the researcher and the respondent.

Whether you’re gathering qualitative or quantitative data for your market research program, it’s important to understand how to structure your findings and apply statistical techniques to translate them into relevant and actionable insights.

How companies use market research

Companies use market research to support a variety of business initiatives, for example:

Market research for product development

Market research can provide fuel for product innovation. Companies want to understand as much as possible about a market so they can develop products and services that can meet customer needs in a way no existing solution can. Market research can help to determine market size in terms of Total Addressable Market (TAM), so that the company can make financial predictions and encourage investment.

Understanding the market helps companies confirm and refine concepts to ensure they’ll be embraced by customers. As launch approaches, market research can test designs, pricing models, marketing messages, and other related business decisions to anticipate how the market will react. Once a product or service has launched, market researchers can test customer opinions so they can continually improve the experiences the brand delivers.

Measuring the strength of your brand

Many companies use market research to understand brand awareness and affinity. For example, market research can tell you how prospective and existing customers think of your brand in relation to other providers. As part of a market research study, you can analyze positive or negative customer sentiments. Those findings can yield valuable insights into customer acquisition, retention, and loyalty.

Market research for thought leadership

Customized market research is valuable because it provides first-party data that no one else in your industry will have. Some companies provide the information they gather through market research studies to their sales partners, such as distributors or brokers, to educate them on market trends and customer needs.

Companies may also package and publish market research externally in the form of “state of the market” reports. This type of content can help you gain exposure from media that cover your industry and position your brand as a thought leader others want to follow.

Monetizing market research

Some companies monetize market research studies by selling insights to advertising partners. For example, a media brand may survey readers on their top challenges and solutions they’re looking to buy. They may then provide that information to advertisers so they can reflect that information in their campaigns, through targeting and personalized messages.

What is a market research platform?

A market research platform is a technology that companies use to support their market research studies. The category includes software for:

  • Recruiting, validating, and scheduling research participants to participate in studies
  • Profiling and segmenting participants based on demographic, psychographic, or behavioral attributes
  • Programming and administering surveys and other feedback mechanisms
  • Collecting and recording participant feedback in a variety of formats using quantitative and qualitative methods, and by engaging through multiple channels 
  • Storing data in accordance with security and privacy requirements
  • Analyzing large volumes of structured and unstructured data
  • Sharing results of market research studies with decision makers

By using a market research platform, you can save time managing the administrative and operational aspects of your market research program and focus on delivering strategic value to your stakeholders. Because market research platforms can quickly synthesize large amounts of data, they can highlight patterns and make predictions that manual analysis can’t. Also, market research platforms make longitudinal studies and benchmarking easier because they ensure data can be compared. 

Market research platforms can also improve the experience for research participants. For example, built-in burden controls for sample management ensure that participants aren’t over-surveyed or asked irrelevant questions. 

Benefits of an integrated market research platform

Many organizations conduct market research in siloes. The product team may use one type of market research platform and the marketing or customer experience team another. This type of fractured approach is inefficient and creates a negative experience for respondents; teams don’t know what information has been previously collected so they tend to overlap and even ask participants the same questions.

Market research platforms bring together disparate research efforts in a single, unified effort. They store data in a common repository, or data lake, which makes it available for ongoing analysis. In addition, they integrate with other sources of data you may have, such as sales history or product telemetry, so that market research studies can be segmented and focused or compared across cohorts.

Market research response rates

When putting together a market research study, you’ll want to consider the response rate you can expect. Accurately predicting a response rate can help you determine how large a sample to field for your market research study, and set expectations with stakeholders for the amount of time a study will require to complete.

The average response rate for market research studies is 5% to 20%. Your response rates can be lower or higher, depending on many factors. For example, if you’re focusing on a low incidence population that is hard to reach, whether that’s busy IT executives or people living in remote communities with intermittent Internet access, your response rate will likely be lower than studies designed for the general population.

There are many strategies you can employ to increase your market research response rates. Below, we’ll explore two.

Market research survey design

The days of 20-minute surveys are long gone. Respecting participants’ time and intelligence when designing market research studies is key to increasing engagement and boosting response rates.

When designing your market research surveys, focus on the following areas:

  1. Survey Length: Try to stay below 20 questions and make sure your survey requires no longer than three to five minutes to complete. If you need more information, consider breaking your survey into smaller segments.
  2. Existing Knowledge: Don’t ask redundant questions. You may already have the answers from previous survey results or your connected data. Establish naming conventions for market research activities and questions to ensure they are easily findable for future studies.
  3. Entertainment Factor: Improve survey engagement by incorporating visuals and adopting a conversational tone. Think about asking survey questions in new ways.
  4. Relevance is Key: Opt for surveys that focus on topics of interest to research participants, not just to your company.
  5. Diversify Content: Avoid redundant questions and diversify topics for a more engaging experience.
  6. Authentic Engagement: Whenever possible, personalize your outreach to participants by sending your survey from a specific market research team member or stakeholder. This adds an authentic touch and builds trust in your brand.
  7. Read Aloud: Increase data accuracy by reading questions aloud, ensuring they are clear and can be easily understood by market research participants.
  8. Mobile First: Most emails are opened on a mobile. Millennials, Gen Z, Spanish-speaking Americas, and business decision makers are heavy mobile users. Data quality suffers if the member’s mobile experience is a poor one. Always test the experience on a mobile device before deploying.
  9. Sharing Insights: Once your market research survey is complete, let participants in on your findings.
  10. Adaptability: Adapt market research surveys based on participant input to continually improve the engagement experience.

Market research interview best practices

Market research interviews require practice and skill. The way you ask questions determines the structure of your conversation, including the areas of emphasis and the level of insights you can extract. You need to make sure when an interview is over and you review the notes, you have usable data that help lead you to a conclusion.

Don’t ask two questions at the same time

Known as double-barreled or compound questions, these questions look on the surface like one question but in fact they ask more than one thing. They can confuse participants and result in muddled data that reduces the accuracy and reliability of your market research. You may not even be aware that you’re asking these types of questions so it’s important to know what to listen for and catch yourself.

Examples of this type of double-barreled question are:

  • “Are you hungry or thirsty?”
  • “How are you using products A and B?”

Ask open-ended questions

As a qualitative market research technique, interviews aren’t intended to confirm a preconceived hypothesis. Rather than looking for a yes/no answer, rating or ranking, you want to give the respondent an opportunity to share their input in whatever words they choose. Your job is to ask questions that encourage them to do so.

Examples of open-ended questions are:

  • Tell me about the last time you experienced X?
  • If I were a fly on the way the last time you talked about X, what would I hear?

Don’t lead the witness

It’s important to avoid introducing your own bias into market research interviews. Be careful how you ask questions so you don’t introduce a preconceived answer.

Examples of this type of biased question are:

  • Don’t you think that this would be a great solution?
  • Many people say X, do you agree with that statement?

Ask “next-level” follow-up questions

The benefit of interviews as a market research technique is the ability to dig deeper than the surface-level understanding you could get from a survey. Your goal is to understand why people respond the way they do.

Let’s say you’re talking with a customer about a new product your company is launching. They seem to love it. But, then you ask: “Would you be willing to pay for this?” Their answer is where the rubber meets the road.

Examples of this type of next-level question are:

  • How often does this happen?
  • How urgent a problem is this for you?
  • What is the impact of not solving this issue?

Listen without interrupting

Perhaps the most important and difficult to master market research interviewing skill is listening deeply. If you’re always thinking about asking your next question, you won’t be able to focus on what a respondent is saying or ask a next-level follow up question. If you need to, put yourself on mute after you ask a question so that you can avoid interrupting until the respondent has finished speaking.

Community-centered market research

Instead of relying on slow, expensive third-party sample providers or external panels, many top companies execute market research studies using an insight community. With an insight community, you can quickly recruit study participants, engage with them using a variety of market research techniques, and analyze feedback in a unified platform.

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Alida is a Community Research platform that helps the world's biggest brands create highly engaged research communities to gather feedback that fuels better customer experiences and product innovation.