What is Consumer or Customer Research? Types, Examples & Best Practices

Learn about different types of customer research, how to determine the right methodology and best practices to ensure actionable results.

What is the purpose of consumer research and why is it important?

Boiled down to the basics, customer research focuses on understanding your customers by focusing on exploring their attitudes, needs, motivations and behavior as the relate to your business. This ultimately helps you better identify, understand, analyze and retain your customers.

How does behavioral research improve consumer experience?

The more you understand your customer the better you’re able to market to them, create products and services that meet their needs, gain competitive intelligence, proactively identify shifts in purchasing intent and behavior, and increase your chances for success.

Well-crafted and actionable customer research can serve as a foundation for the voice of the customer (VoC) efforts within your organization. And it’s been proven to be a key to the performance of top companies today.

For those companies that develop a comprehensive voice of customer research strategy and leverage it throughout the organization, Aberdeen Group reports:

What are the 4 types of customer market research?

You can generally break customer market research into four categories: primary, secondary, quantitative and qualitative. They are complementary and can be used together to gain a more comprehensive understanding of your customer. Read on for customer research examples and more information on which type to use for your specific needs.

1. Primary Customer Research

Primary research is any type of research that you conduct directly with your target customers. Its greatest advantages are that you can target it to groups or segments of your customers and specifically tailor the content to your research needs. Primary customer research includes:

2. Secondary Customer Research

Secondary research is data that has been compiled and organized by a third party, typically data aggregators or large customer market research companies who focus on specific industries and types of data. This includes “syndicated research,” which is research that is independently conducted, published and sold by a market research firm.

Secondary research typically measures consumer attitudes, product and brand preferences, media consumption habits, and demographic and lifestyle characteristics. It’s usually based on large research projects conducted on a national level. The results aren’t limited to your customers, although you can select demographics and other data to help you mirror your customers as much as possible.

Some secondary customer research examples include industry trends by retail-specific market research companies, such as NPD; media consumption reports by data aggregators, such as Simmons; and shopping behavior tracking by retail specialists, such as Kantar.

Since the same research results can be purchased by several companies, the cost of performing secondary research can be less expensive. These reports are useful for tracking consumer trends and providing comparisons. However, they don’t provide the same level of actionable insights on your customers as primary research, which is designed to find the “why” of a purchase and to project what could occur in the future.

3. Quantitative Customer Research

When conducting primary customer research, you can gather two basic types of information: qualitative or quantitative.

Quantitative research provides statistical information on your customers — for example, the age of your customers, where they shop and whether they are aware of your brand. The most common tool used for quantitative research today is online surveys. The goal is to reach enough customers to make the results statistically reliable so you can project them across your entire customer base and have confidence in the results.

4. Qualitative Customer Research

Qualitative research examines people’s feelings and attitudes towards your product or service, and what motivates them. Focus groups are the most common tool used for qualitative research.

These are more-in-depth interviews that are open-ended and have a smaller number of participants than quantitative research. While the interviews provide in-depth information, the results should be used directionally since they aren’t broad enough to project across your entire customer base.

It’s wise to consider using a professional moderator for qualitative research. This person can help keep the conversation on track and help ensure that all participants have been heard, preventing the conversation from being dominated by a few.

Types of Customer Research Are Stronger Together

It’s becoming more common for both qualitative and quantitative customer research to be used together to gain a better understanding of customers. It’s also possible to combine them into a single initiative.

For example, some customer research companies have the ability to “break in” when online respondents are completing surveys and incent them to have a brief live chat with the operator. Typically, respondents are selected based on how they have answered previous questions. This methodology provides qualitative insights backed by quantitative results — the best of both worlds.

What are effective customer research process and methods?

So, where to begin? Too often, retailers select the type of research tool before they’ve set their objectives. This can result in low confidence in the results and the inability to apply the results in a meaningful fashion. Instead, follow the three-step process outlined below for a solid customer research project and results you can trust.

Step 1: Set Objectives

The main objectives inform and steer the research team in the right direction throughout the project. Research objectives are essentially summary statements detailing the categories of data you want to acquire. Objectives should be tailored to each specific project. This may include:

For example, many of our retail clients are interested in improving their marketing to customers. But that’s a broad area with many facets, so it works best to break down that overarching goal. At CCG, we deconstruct the big picture into five key levels that help our clients understand their target customers and extrapolate that knowledge into successful customer marketing.

Each of these areas can be addressed by customer research, but different methodologies work better for different objectives.

• Behavioral is analytically-based research using transactional data. This fact-based analysis can complement the other research methodologies.
• For demographic/lifestyle data, you can either ask your customers in a qualitative survey, such as an online survey, or append third-party data.
• Motivational, attitudinal and aspirational objectives can be best met by using quantitative tools, such as online surveys, if your objectives include projecting the results across your customer base. If, however, you’re looking for more in-depth information, then using one-on-one interviews or focus groups will be the best choice.

You may want to incorporate both qualitative and quantitative types of consumer research. For instance, you might conduct a series of focus groups first to help determine what types of questions you want to ask, then follow up with a quantitative survey to quantify and project the results.

By gathering and integrating data derived from each of these levels, you can form a multi-dimensional picture of the customer to help guide decision-making. It’s also likely that you’ll discover multiple objectives for your customer market research. You may or may not be able to achieve them all with a single research initiative, so it’s wise to prioritize them. Or group them by similarities, such as brand awareness, brand attributes and customer attitudes on your brand and your competitors.

Step 2: Target Your Audience

Once you have defined your objectives and know the general information you want to obtain from the survey, you need to define the target audience that will provide the data you need. You also need to think about what comparisons between customer groups or segments you may want to use.

It is possible for a research project to target multiple populations to acquire the necessary data for a successful project. If you do this, ensure that the survey questions are tailored to those groups. For example, if your objective is to determine customer attitudes about a new product line, you don’t want to ask customers who have never purchased within the line.

In some cases, you may want to compare data from previous years, compare certain segments of a population to each other or benchmark data against existing market data.

Step 3: Determine Whether to Use an Incentive

To increase the response rate to your customer research, you may need to offer an incentive. If your customers are highly engaged in your brand, you may not need one. But since today’s consumers are being inundated with feedback requests, you may need to offer an incentive to cut through the noise.

The best way to determine whether to use an incentive is to review past responses. If you struggle with obtaining a response rate over 3%, consider using an incentive. If you don’t have historical data, try launching the customer research without an incentive. If you receive a poor response, then add an incentive for the remaining requests or the second wave of invites.

Incentives vary dramatically, but in retail a drawing for a gift card often works well. Just ensure it’s a high enough amount to attract attention and provide enough value to encourage participants to complete the research. Incentives to reward each individual who completes the survey, such as a Starbucks gift card, can also be used, but can be complex to fulfill for large research projects.

If you’re using a consumer panel, the incentive shouldn’t be an issue since most have their own incentives built in, such as points for free gifts.

Customer Research Best Practices

Each research project is unique, and what works for some may fail for others because of unique audiences, different incentives and distinct objectives.

When developing quantitative tools, there are some best practices to help ensure success:

• Leverage professionals. Customer research is a combination of art and science. Ensure statistically valid and actionable results by leveraging an internal resource or a third party with research experience.  
• Combine techniques. Actionable customer insights don’t necessarily come from a single research tool, such as focus groups or a customer survey. They are usually compiled through a combination of information-gathering activities and combined with an analysis that provides texture and meaning.
  Learn more about CCG’s approach to retail marketing.
• Use year-over-year benchmarks. Asking the same question year over year allows you to trend the answers and serves as an early indicator of changes in consumer perceptions, attitudes and understanding — good or bad.

An example of this type of question is the Net Promotor Score, pioneered by Bain & Company, that asks: “How likely is it you would recommend us to a friend?”

• Collect respondents’ answers. When doing large, quantitative customer research projects, ensure that your respondents’ answers are being collected and added to your CRM or customer database. You can use this data for additional backend analysis.
• Optimize for mobile viewing. Remember that most of your respondents will be opening your online survey on their smartphones. Make sure it’s a positive experience by optimizing the tool for mobile and taking the time to thoroughly test it in a mobile environment.
• Limit open-ended responses. While it can be tempting to include free-form questions to gather more in-depth information, try to limit them, because they can bog down respondents and increase your abandonment rate. Leverage them when you want to know why your customers are feeling a certain way or when you have a specific question that is better answered in this format.