Why don’t more businesses use research to define customers?

Business research is a necessary evil. Whether your starting a business or you’re looking to take your business to the next level, knowing who your customers are is vital to your success.

Yet small businesses and startups often cop a hammering for not using business research methodologies enough. We’ve all heard the horror story of the business that insists everyone is a type of customer.

Big businesses and agencies are not immune.

Why don’t more businesses use research?

While research is important, it limits the scope of the kind of customer we attract. And if you get research wrong, it makes things difficult.

For example: 

You may end up with customers you don’t expect – or don’t want. Cristal Champagne famously alienated a large proportion of their customers by not treating their customers with respect. 

You may design your business around customers that never eventuate. This is common in startups. If you don’t have the ability to pivot, it can sink you. 

That level of disappointment doesn’t hurt the ego alone. It also blows a big fat hole in the hip pocket. Not only is it money unwisely spent. It’s money that you may not see again if you’ve targeted the wrong customers.

Adding another level of complexity is that it’s not necessarily the research’s fault.

It may be execution. Starting a business is no easy task, after all.

It may be that the idea is too early or too late for the identified target market.

Perhaps it’s design of the product.

So how do you find the right kind of research that will give you the best results? 

The days of the sample focus group and the simple survey are long gone. If you’re starting a business, you need to justify the hypothesis for your business endeavour from the get go.

If you’re in the thick of your business, the shadow of the coalface may obscure your ability to see your business objectively.

But there are some ways that you can improve your business research results as you travel down the business road.

In order for research to be successful you need to: 
1) Forget sweeping generalisations. There is no such thing as “women over 30” or “Gen Y” or “Inner Easties”- and yet most businesses don’t dig deeper than these labels.
2) Undertake research is an ongoing activity. It’s not a set and forget task. You have to be nimble enough to continue learning.
3) Understand that some customers don’t know what they want. As Ford famously said – “If I asked them what they wanted, they would have said faster horses”. This is not an uncommon problem.
4) Weed out opinions that matter from those that don’t. You have to make sure the person speaking about the future of your product already buys or intends to buy your product in the future.

We said goodbye to big target markets a while back. Research is a lot more customised and works on a smaller wedge of the customer pie. And that’s why I think most SME outfits don’t use research as often as they should.

Enough bad news, what about a market researching solution? 

Businesses can research daily with our customers by asking them questions if we want. And we can learn to listen to the bits that matter and take the other stuff under advisement.

You can make some head way with these business research hacks.

• Look at your databases for purchase and registration online. Identify customers with strong spending patterns or signs of strong activity. Look at how they interact with your product. Check to see if you can see a set sales cycle behaviour. Isolate promotions and events that have triggered positive interactions. Identify what works and what doesn’t through monitoring their interaction with your products. Dig deep in the info you have and see what you can uncover. or if you’re starting a business, look for available sources of information such as the Australian Bureau of Statistics and published research papers. Make use of Survey Monkey to conduct your own field research.
• Identify your ten ideal customers and contact them to arrange an interview. What kinds of customers do you want more of? Contact them and ask for their opinion. Find out what drives them to interact with your product on an emotional level, what you could do better and what you’re already doing well. Find out what would encourage them to share that experience with their friends. Ask them about their marketing and media habits.
• Turn promotion time into question time. Can’t decide which promotion will work? Let the customer decide! Ask customers via your mailing list and various social media channels. Look for patterns in the kind of channel they use and the sort of response you get. Be wise enough to spot the paying customer from the opinion driven follower as you do so.
• Use the complaints and queries you receive to work out what triggers potential customers to contact you. When people are asking questions and complaining, they are sharing with your information on how you can improve your business. It’s a great time to ask questions.

Want to dig a little deeper into your business research?

I can help you assess the current performance of your business marketing. I can also build strategies for you to test new products and features in the market.

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