Almost everything you read about marketing and social media advises you to “know your customer” — or prospective customer. And, that’s sound advice. But, how many of you REALLY take the time to get to know your customer? Don’t lie ….
Be honest with yourself.
Did you really do systematic market research to understand not only the demographics and geographics of your customers but their psychographics and lifestyles?
And, have you updated this information recently?
Traditional market research as a way to know your customer
Traditional market research is the old standby when it comes to getting to know your customer, so let’s start there. Rather than a monolith, traditional market research offers many tools to learn about customers and prospects to improve performance. According to the SBA (US Small Business Administration), market research is:
Market research blends consumer behavior and economic trends to confirm and improve your business idea. It’s crucial to understand your consumer base from the outset. Market research lets you reduce risks even while your business is still just a gleam in your eye.
Of course, market research isn’t just important as a means to test a business idea, but used to answer any number of questions that aid decision making such as:
- What benefits are most important to consumers when choosing X?
- Where do my customers and prospects spend their time online? What TV and radio programs do they watch/listen to?
- Who are the influencers for my customers and prospects?
- What are the biggest pain points for consumers who buy products like mine?
- Is there a sufficient market to introduce a new product?
- Will the new product I envision cannibalize my existing products resulting in lower profits?
- And, many more questions because, in general, market research begins with a question or series of questions the firm needs to be answered to help improve decision-making.
These questions are related to information to help meet and exceed customer needs so you can grow your business. Obviously, other types of market research are used to understand other aspects of your market such as your competition and to assess customer satisfaction. Today, we’ll focus on getting to know your customers.
The market research process
Traditional market research is conducted periodically to answer a question and provide guidance for decisions. It involves a formal, structured process if you want to produce valid results (see the end of this post for a discussion of why not all data is good data). Market research takes time and money, so you only conduct market research when the benefit you might achieve outweighs the costs. We’ll start with the steps in the process outlined in the graphic above.
- Define the problem
- Develop the strategy
- Design research materials
- Collect data
- Analyze data
- Write a report containing the analysis and recommendations
- Implement changes based on the insights gleaned from the study
Defining the problem – is the first step in the process and it’s not a throwaway but a critical element of the process. Sometimes a symptom masquerades as a problem and curing the symptom is as ineffective as treating a disease by treating the symptoms. For instance, low sales isn’t a problem, it’s a symptom of some other problem. Figuring out the underlying problem may involve some preliminary research to clearly articulate why sales don’t meet expectations.
The classic example of the dangers inherent in misdefining a problem is Coke. The researchers assumed that the level of sweetness was a deciding factor when choosing a cola product so they asked respondents how sweet they liked their cola. The data suggested creating a version of Coke that was sweeter, which failed miserably. Turns out, sweetness wasn’t a deciding factor in choosing a cola so the company switched back to the old formula.
Designing the study – involves making a series of decisions that guide the remainder of the market research process. Below is an image that shows how the design process branches from the original decision of whether to use primary or secondary data to influence the remainder of the process. Be careful in considering this graphic as the options under quantitative data are versions of the same thing, as opposed to different types of quant studies. I’ve fixed this problem in my discussion below.
Here are some of the considerations in choosing the method of collecting data.
- Surveys – surveys are the staple of market research and the internet makes it faster, cheaper, and easier through tools such as SurveyMonkey and Qualtrics. Traditional and Online Business Surveys involve creating standard questions, usually with a list that respondents select from and involve large numbers of respondents. Despite the perception of surveys as the gold standard for market research (especially when using a random sample), problems remain including:
- Sample size – if your sample size is too small, you really don’t get to know your customer very well. This happens a lot in those newspaper opinion polls, where they only interview about 200 people from the over 350 million in the US.
- Representative – are the results representative of your customers? If not, you have sample bias and the results don’t match the attitudes and beliefs of your market so your decisions may not only be wrong but damaging.
- Leading questions – often, unskilled market researchers ask leading questions. These questions drive respondents to answer the question in a specific way that may not match how they actually feel. Many company satisfaction surveys, for instance, are constructed with leading questions to skew results toward higher levels of satisfaction than actually exist. Again, the data lead to poor decisions.
- Not asking the right questions. That’s what happened with Coke, leading to the introduction of a new product no one wanted. Sometimes, you actually have to do a little market research just to figure out what questions you should ask.
- Inappropriate analysis – another problem when using unskilled market researchers is that they interpret the data incorrectly. They read into the answers what they want to find in them rather than using statistical analysis to develop valid interpretations.
- Lack of depth – surveys are much better at getting at how much, how often, and how many kinds of questions and really drop the ball when it comes to answering about feelings or understanding the customer.
- Experiments – involve setting up a scenario or traditional testing such as eye movement tracking to assess how consumers respond to test stimuli. For instance, a colleague uses fMRI to monitor brain changes in response to advertising. Experimental methods may be the bomb in medical research or chemistry but using them as a means to understand human behavior is limited. First, they suffer from many of the same problems identified earlier in surveys. In fact, scenarios simply attach a context to a survey. They also introduce artificiality into the research since atoms behave the same way under the same conditions but humans don’t behave in nature the way they do in a lab.
Qualitative methods were developed to address some of the problems with quantitative methods, namely to access deeper attitudes and answer the why questions. Here are some tactics you might try:
- Focus groups – are also ubiquitous, especially around traditional marketing and advertising agencies. Usually run by a highly trained moderator, the group consists of 8-12 informants with similar backgrounds. Usually, you conduct multiple focus groups with a homogenous group in each study to collect data from diverse groups rather than combine them in one study. They have the advantage of helping understand how groups of consumers interact with your product and can help drive deeper thoughts from informants. Again, some problems remain.
- Marginalize some voices – without a skilled moderator, you won’t hear some voices in the group as the more talkative ones will dominate the conversation.
- Group think – this also happens in focus groups when some people in the group dominate the group — they make everyone else feel like they have to agree with them or be weird.
- Interpretation problems and leading answers – just as with surveys, these remain problematic. In fact, without trained moderators and analysts, these problems are magnified in focus groups.
- Ethnographic studies – these actually have some major advantages over other ways of getting to know your customer. Ethnographic studies involve extensive interviews with customers (depth interviews) commonly using a standard question guide, which allows liberal variation and follow-up questions to truly understand the consumer. You can also observe consumers or be participant observers — like you’re studying a tribal group like Margaret Mead. With the amount of user-generated data available on social networks, you often don’t need to collect the data, just gather it from these sites and interpret it. Again, there are problems.
- Analysis – it takes a lot of skill and experience to correctly interpret ethnographic data. Otherwise, analysis won’t tell you much about your customers or might actually be wrong.
- Social desirability – is a particular concern with some types of data collection because people want to portray themselves in a way that makes them look good. For instance, teenagers will lie about having sex because they are embarrassed to admit they haven’t had sex yet when all their friends are talking about their sexual exploits.
Marketing information systems
In contrast to marketing research, marketing information systems (MIS) like the one above, don’t revolve around answering questions but around monitoring ongoing performance, especially around KPIs or key performance indicators. With the explosion of data available through digital sources, more businesses focus a lot of their research budget on MIS rather than traditional market research. Here are some sources of information you might use as part of your marketing information system:
- website metrics such as from Google Analytics or paid sources
- SEO (search engine optimization) from tools like Moz and SEMRush
- social media metrics from various social platforms and tools like Buzzsumo and Hootsuite
- advertising tools achieved by integrating your Google Ads with Google Analytics and using tools like the Facebook Ads platform to create ads and monitor performance
- internal sales and inventory data
- listening tools like SproutSocial to monitor mentions of your brand and your competition
Of course, marketing information systems can’t be used mindlessly. and simply monitoring your performance isn’t enough for planning purposes. For instance, Walmart execs told me they plan holiday buying based on the performance of product purchase levels from last year using a simple trend line extension. A better tool would combine performance data with economic data and listening data to determine consumer trends.
Collecting data isn’t analogous to analyzing data. For instance, you must break down your website data by various groups based on demographics and geography to get a better picture and to guide decisions. Above-average performance by one group might warrant more concentrated efforts to reach that group or efforts to generate higher sales from underperforming groups with the potential to convert.
Trends are much more important to analyze in your MIS program than point data.
Creating a social media analytics dashboard
Software solutions might exist for creating such a holistic social media analytics dashboard, but I haven’t found ANY that are reasonably priced for small and mid-sized businesses. Enterprise-class analytics are just TOO expensive, although some do a very nice job.
So, I create a dashboard for my clients using an Excel spreadsheet and graphing trends (it’s really these trends that are the most important social media analytics in most cases).
Here’s an example of the type of social media analytics dashboard I would create for a client — sorry, it’s blank since I take my confidentiality agreements VERY seriously.
Using the Social Media Analytics Dashboard
I wouldn’t recommend sending this to a client. They’ll just look at it and scratch their head wondering if they made the right decision in hiring you.
No, what you do is:
- create charts from this data showing the trends across various metrics over time
- use the data to see if correlations exist in the data — I use SPSS, but SAS works, and Excel has some rudimentary statistical tools that might work
- run the data through a cross-tabulation process that goes beyond simple correlations
Now, you have a lot of pretty charts to show your client and they’re beginning to believe they made the right decision in hiring you. But, more than pretty charts, your client now understands their social media analytics holistically — understanding how elements relate to each other and how they create success for their social media marketing strategy.
Social media analytics
Obviously, the elements of your social media analytics dashboard depend on your social media strategic objectives — you need to capture those metrics that indicate whether you’re reaching your goals. Creating a social media analytics dashboard also means understanding a little about HOW SOCIAL MEDIA MARKETING WORKS on different platforms.
As mentioned in an earlier post, social media analytics come in a variety of forms — including Facebook Insights, Google Analytics, email analytics from services such as AWeber or Constant Contact, and other metrics. Hootsuite and other social media dashboards do a good job of bringing many of these metrics to the same place, but that still doesn’t help you understand your social media marketing results holistically.
Why understand your social media analytics holistically? Because, unless you’re only using a single social networking platform, your social media strategy is integrated — with your blog posts shared on Facebook, YouTube, and Twitter, you’re Twitter feed shown on your website, your email marketing sharing your blog posts, which subscribers might share on their own social networks. Thus, actions in one social network spill over to affect metrics in other social networks and require a holistic understanding to effectively manage your social media marketing outcomes.
No data may be better than bad data
When it comes to knowing your customer, often bad data is worse than no data. But, relying on your own beliefs about customers can also create problems. So, you’re better off trying to get to know your customer using one or more of the methods discussed above.
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