Market Research: Know Your Customer

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?

Getting to know your customer is critical for success

So, let’s talk about some ways to get to know your customer along with some dangers to look out for with each strategy.

1. Surveys – surveys are the staple of market research and the internet makes it faster, cheaper, and easier through tools such as SurveyMonkey.  Surveys involve creating standard questions, usually with a list of possible answers that respondents select from, and involve large numbers of respondents.  But, problems remain.
1. 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.
2. Representative – are the results representative of your customers.  If not, your decisions won’t fit YOUR customers.
3. Leading questions – often, unskilled market researchers as leading questions.  These questions drive respondents to answer the question in a specific way that may not match how they actually feel.
4. Not asking the right questions.  That’s what happened with Coke, leading to 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.
5. 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.
6. Lack of depth – surveys are much better at getting at how much, how often, how many kinds of questions and really drop the ball when it comes to answering about feelings or understanding the customer.
2. 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.  They have the advantage of helping understand how groups of customers interact with your product and can help drive deeper thought from informants.  Again, some problems remain.
1. 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.
2. 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.
3. 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.
3. 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 common question guide, which allows liberal variation and follow-up questions to truly understand the consumer.  You can also observe consumers or be a participant observers — like you’re studying a tribal group like Margaret Mead.  With the amount of user-generated data available on social networks, often you don’t need to collect the data, just gather if from these sites and interpret it.  Again, there are problems.
1. 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.
2. Social desirability – is an 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.

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 of more of the methods discussed above.  The rest of the week, I’ll give you more pointers to help you get to know your customer better.