If you are a small to medium size businesses customer insight can seem like a luxury.  After all, investing in the product or service is the all-important factor when you are looking at business growth.

However, ultimately any product or service is shaped around a customer need.  Get that right and customers will buy from you and keep buying from you.  Most, if not all, of the top businesses conduct customer research on a regular basis.

Conversely in today’s world of data, it has never been easier to find out about consumer behaviour. Google Analytics offers details on the behaviour of your website visitors.  A simple web search can reveal high level data on trends in consumer behaviour and now we have Chat GPT which is a totally different story and one for later not now!

So does this mean you don’t need to carry out bespoke research to find out what makes your consumers tick?  Despite the maelstrom of data, we believe dedicated customer insight is more important than ever before.

Below we outline five reasons why you should commission bespoke research:

1.Customer research avoids costly mistakes

You may think you know your customers particularly if you are a small to medium sized business.  After all many smaller businesses have excellent relationships with their customers and may have served them over years.

However it is very easy to make assumptions and think you know why a particular issue is happening.  We worked recently with a company who were developing a medical app.  They were struggling with patients booking multiple follow-up appointments.  They believed there was an issue with the app and put together a plan to invest in a costly restructuring of it.

The organisation then decided to carry out some customer research to check out their hypothesis.   This was a game changer.  It emerged patients booked multiple appointments due to poor communication of test results.  The results were often delayed so they would book a back-up appointment.  The research not only saved the business considerable money but allowed it to address the nub of the problem and not the outcome.

It’s easy to make assumptions when working day to day in your business.  But as the above example illustrates assumptions can be costly.

2. Data only gives you part of the story

Data or so called ‘Big data’ is very effective in identifying the who, what, when, how and where.  As discussed so much data is available and it is easy to track customer behaviour. There is one critical piece of the jigsaw missing – the why.  The ‘why’ helps you understand what makes your customers tick. In other words what are the key drivers for why they buy from you?  Analytical data won’t give you this.

If you don’t understand the ‘why’ you risk creating an ‘empathy gap’ with your customers.  That is, you miss the point when you communicate with them.  For example we work with a company who were churning out offers and discount communication to their customer database.  This appeared to make commercial sense as the business operated in a highly competitive online marketplace.

However, talking to their customers we found that they valued this particular company because of its longevity in the market and expertise.  Price communication undermined precisely these values that customers held dear.  And more importantly it was inhibiting the growth in average basket value per customer which would in turn enhance profitability.

This example illustrates that an understanding of your customers and not just the market can be fundamental drivers of business growth.

3. Lapsed and competitor customers hold the key to futureproofing growth

It is probable that most of the data or knowledge you hold in-house is about your customers.  It is unlikely you are speaking to lapsed and competitor customers unless you are carrying out bespoke research.

An understanding of lapsed customers is critical.  At one point in time they invested in your business. Hence they are easier to win over compared to those who have never bought from you.  Why have they left you?  Who have they gone to?  What would it take to get them back?  If you can solve the area of dissatisfaction, there is a chance they might return.

Competitor customers are more difficult to acquire but can create a step change in growth for any business.  Finding out why they access competitor products or services helps assess what you can do to become ‘sticky’ as an organisation and attract their business.

Competitor customers are your blind spot – you don’t know what they know. The Johari Window model created by psychologists in the 20^th century identified this ‘blind spot’ – what is known to others but not known to yourself.

4. You can’t see the wood for the trees

Working in an organisation means it can be challenging to see the customer point of view and even more so if you are a business founder. Naturally there’s a deeply emotional relationship with the product and service you created or work in.

There’s often a gulf between what consumers think of your product or service vs. what you think of it. Founders have lived and breathed the incarnation of what they are selling. This heightens the perceived relevance of issues that may have absolutely no importance to potential consumers.

We revolutionised the thinking of a charity that had focussed the design of its services to those with disabilities on a single mindset. Our workshops with their clients revealed there were different types of mindsets. They were not defined by disability. Taking that different starting point totally reshaped how they thought about their service provision.

5. Targeted research gives a better ROI

It goes without saying that bespoke research offers the benefit of exploring the issues you need to understand.  Furthermore you can investigate questions with a targeted audience e.g. if you are developing a high end new product or service, a focus on the following would make sense:

• your top spending customers who are more likely to trade up
• your most loyal customers who can evaluate if the new product has a good fit with your brand equity
• competitor customers who also fall into the high spend bracket

Best practise when designing research is to start with identifying the business issue e.g. to address declining sales and achieve growth, launch a new product targeted at a specific audience.  Once the business objectives are defined, the research objectives naturally emerge from that.  A dedicated research company can assist in defining these research objectives if unfamiliar.

Taking the next step towards running a research project

If you are thinking about whether you need research here are ten questions to help you decide if you do.

1. How do you know what your customers think of you?
2. What don’t they like about you?
3. Why did your lapsed customers leave you?
4. Which competitor did your lapsed customers go to and why?
5. Is there anything that you could have done to stop the attrition?
6. What do competitor customers think of you?
7. Why don’t they buy from you?
8. What do the competitive set do well?
9. What could you learn from the competitive set?
10. What could you improve so that your customers spend more with you?

Lindsey Annable, Free Spirit Consulting

Free Spirit Consulting is a micro agency (and ICG member) which works with organisations of all sizes from small to top multinationals.  We are passionate about helping them see the value of and derive value from research.

(m) 00 44 7971 797 568

(e) lindsey@freespiritconsulting.com

(w) www.freespiritconsulting.com

Good question!  ICG Member Nick Bonney has some strong opinions and interesting stories to share.

“I have a confession. I hate naming research.

Whenever a client asks that we conduct research to look at naming options in isolation, I typically tell them not to waste their money. More often than not, it’s a brief that’s doomed to fail – on the one hand someone in the boardroom has already decided which contender is the winner and, on the other, it’s an artificial question for participants to respond to. I mean, when have you honestly spent more than a nano second pondering a name of a product at point of sale?

So, you can imagine my horror, when I heard the latest campaign from Jury’s Inn, with the brandline “we’re staying the same, just changing the name”. I’m sure I’m not the only one who listened to that ad and wondered just what is the point?! Given that the hotel chain is currently rocking a two star ‘poor’ rating on Trustpilot, perhaps the message should have been “come and see how we’ve changed”. The whole premise of the campaign smacks of something conceived in the boardroom rather than something which matters to customers. What a missed ‘once in a brand lifecycle‘ opportunity.

I’m a firm believer that, IP considerations aside, a brand’s name should be the final piece of the jigsaw, not the starting point. A brand name becomes meaningful when you imbue it with meaning through what it stands for in the market.

I should probably explain the root cause of my cynicism towards all things naming-related. In the dying days of the last millennium I made the move to join mobile phone network, Orange. As part of my leaving gift, the team from my previous employer, Maritz TRBi, handed me a compendium of all the research they had run over the preceding few years to develop one of the UK’s most loved brands. We have to wonder how the marketing landscape of the UK would have been different if the team had chosen the more mundane option recommended by the research, Hutchison Microtel, and not Orange.

It’s easy, with hindsight, to understand why the research came to this conclusion. Twenty years on, we’re more than accustomed to brands that bear no relation to their category, from Cazoo cars, Monzo money or groceries from Gorillas. However, in the 1990’s things were very different – brand names were typically far more prosaic, especially when it came to markets such as telecoms, where the leading brands were Cellnet or Vodafone.

Over the ensuing years with Orange, I was lucky enough to research how we should position the brand in virtually every corner of the world. Almost without fail, the key message to emerge from our conversations with consumers was that any change of name needed to be backed up by something that mattered to customers. As the internal catchphrase went “a brand is a promise delivered”.

This was a message that rang loud and clear when we looked at how to transition from Orange to EE. It was critical that this wasn’t simply a name change. Instead, it was the launch of the UK’s first and best 4G network. Indeed, whilst network technology has evolved yet again since, the ‘best network’ claim (evidenced by RootMetrics) remains at the heart of the EE brand proposition.

It’s not to say that research plays no part in the brand development process but it’s critical that the brief covers, not just the name, but also the ‘what’ and the ‘how’, i.e. what the brand is aiming to stand for and how the name will be used alongside other creative assets.

When Reuben Mattus launched the now world-famous, Haagen Dazs, in 1960, the Danish-sounding name was not only a tribute to the Danes and their exemplary treatment of the Jews during the Second World War but also designed to provide the ice cream brand with an air of continental sophistication.

In developing the brand, Mattus understood that the critical thing was not whether or not consumers liked the name Haagen Dazs but whether it evoked feelings of what the brand stood for in the market. The Mattus family were so in tune with their positioning that allegedly Reuben’s wife, Rose, would adorn continental dress to distribute samples to potential customers.

Standing for fancy continental flavours is one thing but it was equally important that the brand could substantiate that position. If the tub contained bland, flavourless vanilla sludge, the brand name would soon become a hollow shell. A house built on sand, if you will.

Potentially the wisest advice of all (and therefore an appropriate place to finish) comes from adland’s Sarah Carter – ‘consumers don’t give a shit and people’s indifference to brands and advertising should be the starting point’. The average punter will lose no sleep over the countless hours you may have spent in endless brainstorming meetings or steering committees trying to get buy-in to the shiny new naming strategy.

So perhaps the question Jury’s Inn should have really been pondering is ‘will anyone care’?…”