A major debate that is waged in the business world is what data collection methods will deliver the best results for a business – consumer insights or market research? Folks who are aligned with the consumer insights team will shout the superiority of their position as loudly as possible while proclaimers of marketing research with do the same with their position.
The truth is that there’s an argument to be made for both positions so the best way to approach the question is to compare the two. Let’s begin with the basics.
What is Market Research?
Market research is a systematic approach to gathering information about a target market or customers. It is an essential part of a sound marketing strategy. Research is used to discover the needs and size of a market. It’s based on logical, statistical evidence. In short, market research answers the “what” of a market and its customers.
What is Customer Insight?
Customer insight is used by businesses to determine the reasoning behind why their target customers behave a specific way with regard to their brand. Insight is used to affect purchase behaviour. In short, customer insight shows us “why” a customer behaves a specific way.
A Closer Look at Customer Insights in Action
Companies that are focused on customer insights are 60% more profitable! That’s a huge increase so let’s look at it in action.
Let’s use an automotive company as an example here. This business has already laid out a sound marketing strategy and learned as much as they can about their overall audience through market research. They have made some sales but now they are looking to improve their marketing, so they launch a new customer survey to capture key information from their customers. The goal is to dive deeper into the psyche of the customer experience. The only way to do this is to ask questions.
Digging deeper into the customer psyche, the automotive company learned that their customers have the following thoughts about why they change dealers. Some of the top insights gained in this example might be:
- Long waiting times
- Appointments not being honoured
- High costs when compared to competition
- Costs higher than initial quote
- Details poorly explained
- Upselling is annoying customers
- Poor quality services
Customer insights provide the information necessary to deal with issues that are important to customers. Using the above information, a business could incorporate the following solutions:
- Take steps to ensure that work is done on schedule. This might mean installing better tools or hiring more employees.
- Set a standard pricing system and always stick to it.
- Relay all information about services rendered to the customer upon completion of work.
- Develop a system for recommending additional services tactfully.
- Hire more skilled employees to ensure the work is done correctly the first time.
These solutions would only be brought to life through insights. Market research details how you should market your service to a target market while insights provide information to help ensure each customer’s experience is the best it can be.
We live in an age where there is plenty of research readily available to everyone. What is lacking is valuable, actionable insight.
The Bottom Line
The experts will continue to wage war over which is better, but the reality is that both market research and customer insights have a very important role to play in a business. Rather than thinking of them as separate entities, start looking at them like layers on a cake. Research delivers knowledge of an overall market and will always be the foundation of a sound marketing plan. Insights just add another layer to that, adding more narrative to the data acquired through research.
We need research to get customers and insights to provide them with the best experience.