The Value of Customer Research: Why the Customer is Still King
Wouldn’t it be nice if it didn’t matter what customers thought about a product and sales would continue to grow anyway? Or if a business could increase the prices of their products without a drop in sales volumes? Probably, but it’s not how the market works these days.
Before the internet, the customer had relatively little power. They were reliant on the products and services in their local area and could gather information about a company or their products from sales agents, local word of mouth or media. Today, most customers have the internet at their disposal not only to buy products from any part of the world, but also to find out about an organisation from various online sources. They can read reviews from hundreds of others who bought the product already, so they know exactly which companies to shortlist and which to avoid whilst making their decision to buy.
More than ever, today’s customers use online sources to share their opinions about products, services and organisation with others. They use review sites, social network sites, forums and many more sources to make sure their opinion is available to other customers. The voice of another customer is more authentic, trustworthy and honest. Therefore any business that has customer opinion on their side has an advantage over those who don’t.
But customers acting as brand ambassadors and spreading brand awareness are not the only reasons why customer research is of high value. There are five more key reasons why businesses should care about what their customers think about them:
1. Customers make profit possible
Physical assets, stock prices, market share, liquid assets and all other entries on the balance sheet are a result of customers spending their money on a product. It’s customers who make the profits possible and allow the profit statement to show a company in a good light to their stakeholders. Understanding how customers use the product and what for will shine a light on how to increase the volume of units sold.
2. Customer needs provide a competitive edge
Understanding customer needs which are not met by any other company provides an advantage over others. It creates a gateway to new market segments and provides an opportunity to expand the product portfolio and strengthen a competitive position. Getting to know customers, their lifestyles and what they look for in a product can unlock a pool of great ideas for new products.
3. New customers are more expensive than existing ones
Acquiring new customers requires a lot of advertising and marketing effort to not only make them aware about a brand, but also to educate them about the products and services offered. An existing customer on the other hand, is already aware and knowledgeable enough. An effective retention strategy might bring a greater return than a brand new marketing campaign. Keeping an eye on the satisfaction and expectations of your existing customers can create reassurance that your business is looking after their customers in the right way.
4. Customer involvement in NPD
Creativity in a product development team is key, but creating something customers don’t have the need for or find too complicated to try and adopt will waste both time and money. How successful the product development process was is often measured in the performance of a product in the market. Including features customers are looking for and creating user experience that is intuitive for the customer will keep the development process on the right track.
5. Be ahead of your customers
Customer needs, the economy and the market place are dynamic entities; keeping a finger on the pulse, spotting early signs of dissatisfaction and fixing problems before they spread to the majority of customers can save a lot of trouble and cancel many difficult meetings. A customer community or panel where you can listen to what is important to them and how their needs are changing over time will ensure you know when the time is right to initiate any corrective measures.
More and more businesses are recognising the power customers have and the value market research brings to their organisations. For ideas how to get actionable and business-focused customer feedback, get in touch and learn how we can help you get closer to your customers.