Consumer research: What is it and why you should invest in it?
Updated: May 30
At the heart of any business is the customer, and to grow, scale and stand out as you fulfil your customer’s unmet needs. Consumer research is an effective way of getting to know who your customers are, what they are looking for and ideating on how you can be at the forefront for them.
By definition, consumer research is the practice of identifying the preferences, attitudes, motivations and buying behaviour of the targeted customer. Using a variety of research methods (at theObservatory we have adopted research methods from the social sciences and formulated our own proprietary methods) to gather information about existing or potential consumers, particularly identifying traits among the different customer groups are identified and categorizing consumers into customer segments and buyer personas, which are then used to create brand communication material, campaigns targeting a specific segment or persona or can be used for new product development.
Consumer research is the key to improving your product and successfully marketing to customers who want to do business with you. Interviews, surveys, and other customer research methods are some of the techniques we use to uncover useful insights that can be used to consistently increase its revenue year on year for brands.
The benefits of consumer research that are well-done have many benefits, above all, it helps businesses gain an in-depth understanding regarding the foundation of your industry which includes your customers, buyers, the domain, and competitors. Below we have listed out six ways in which consumer research can help your business grow:
1) Focuses on Consumer’s Point of View: Consumer research where consumers narrate stories of how they went about making purchasing decisions, or what their pain points are - this kind of qualitative research provides brands with the ability to identify exactly who your customer is or who could be your potential customers, their requirements, and expectations. Understanding consumer’s point of view of products, services, and markets can help your business to set up either a new channel of communication or develop products that exactly meet customer needs or companies can understand how effectively they can customize their business and provide more value.
2) Understand Your Competitors: It is extremely important to be familiar with the products and services offered by your competitors. This is a great way for businesses to quickly identify gaps that they can fill in or critically think and strategize on how they can stand out in an existing overcrowded market. Proper consumer research also helps to benchmark brands against the competition in terms of strategy, pricing etc. and ensure you have a leading advantage.
3) Test for Success: Have an idea or many ideas that you are unsure of? Need help making decisions on whether a new product or service will connect with your customer? You can carry out business experiments by putting in marketing variations in front of the customer. It is a common practice used to validate a large number of ideas in the field.
Test marketing is also an inexpensive way of reducing risk by testing marketing strategies and gain consumer feedback before you can scale them. Effective market research helps you with concepts and prototypes before you plan the full-scale implementation.
4) It Ensures Your Relevancy: Cultures and people are not static, they are dynamic. That means consumer needs and expectations are constantly changing and evolving. To remain successful, a business needs to have foresight and information on how it can continue to remain relevant year after year. cast, according to which they need to anticipate and react for sustainability and growth. The quickest way to stay relevant is to run a tracking survey. A simple, recurring survey where you can see the trend of the data segmented by time.
5) Find new markets and target consumers: Consumer research is the best stepping stone for businesses that are looking to expand, scale up or diversify. Consumer research helps in this through the following:
Analysing current and future markets.
Identify scope for improvement.
Identify pockets and gaps that are not meeting consumer needs
Strategize and prioritize new product launches
Consumer research plays a key role in predicting the evolution of the market, which in turn helps for a successful business expansion and growth.
Understanding your target market is an extremely crucial step for businesses looking to remain relevant, expand and scale. At theOservatory we help big brands, companies, SMBs and even start-ups to help them find their unique opportunity in the Indian market.