Editor’s note: Rob Hernandez is senior vice president with global marketing consultancy GBH Insights. Hernandez is based in Chicago.
Big data is all the rage these days. The growth rate of data analytics spending far outstrips that of any other marketing research approach in the last three years. IDC forecasts that revenues for business analytics solutions will reach close to $200 billion this year, with double-digit annual growth through 2022. Indeed, brands seem to collect more data than they possibly know what to do with, which has led many marketing leaders to incorrectly assume that they no longer need qualitative research. This couldn’t be further from the truth.
Collecting data for data’s sake can often lead to missteps in terms of marketing strategy. Companies also have a responsibility to take a leaner approach to how they collect and apply better data to improve CX and marketing, while being transparent with customers.
To get to better data, it’s more important today than ever before for companies to conduct primary research to understand the customer behavior behind the data and the motivating factors that drive people to action. Even Google, one of the most data-intensive companies ever, has underscored the importance of appreciating “the human, the person behind the data” as a cornerstone for success.
Data collection must be meaningfully tied to strategy. Through qualitative research and asking the right questions, marketers are able to dig deeper.
- Why people choose a brand or product in the first place?
- What drives their purchase decisions?
- Why did they purchase at a particular location or time of day?
- Who isn’t buying a product or service and why (including those people beyond the reach of your transactional databases)?
Understand what motivates your customers
By having direct conversations with customers and observing them, companies gain better insight into what motivates their target customers. This type of empathy-led research not only provides new insights, but also valuable context to better understand customer segments and whether the company’s view of customer motivations is accurate.
For example, companies may have data showing their audience consumes a certain type of media at regular time intervals. This provides insight into customer media behavior from a reliable and statistical standpoint, but it doesn’t reveal much about who the target customer is, beyond basic demographics.
Some organizations may bypass market segmentation altogether or act based on incomplete customer data for a demographically driven cluster analysis. While clusters are useful in pulling groups of people together based on demographics and transactional metrics, they don’t account for the customer needs and behaviors that drive a group of people to action. Only by using qualitative research can companies layer in critical inputs to create a more robust and nuanced segmentation.
Qualitative research in segmentation also enables companies to develop stories to better understand the customer experience. Qualitative researchers are routinely tasked with telling stories, based on patterns that emerge from what they’re hearing and observing from consumers, and then building a narrative that reveals who these people actually are.
Find customer inflection points
Companies often rely on customer relationship marketing (CRM) data to provide a sense of the customer journey – from initial consideration through point-of-sale. However, CRM data alone provides a limited picture. Companies also need to understand why a customer feels and acts the way he or she does, in addition to understanding who, where, when and how often customers are engaging across channels.
Qualitative research also provides brands with valuable perspective, including the customers’ own narrated views of their daily activities and decisions. It also helps to fill in missing gaps in the customer journey, revealing critical moments where a customer reaches an inflection point in their shopping experience. It’s also possible to derive insight into the experience and journey of prospective customers that are not being targeted … key groups that reside outside existing data sets and which may hold potential for future growth.
Stay connected to customer feedback
By listening to customer stories, organizations are better able to learn how they interact with products and services, what makes them happy or frustrates them. This, in turn, helps marketers create more precise and effective campaigns.
With the customer journey evolving at a breakneck pace, marketers must continually seek out new data and direct customer feedback to stay connected. Qualitative techniques like social media monitoring and passive observation provide real-time insight into customer needs. They also reveal key context, customer passion points and emotions that are helpful in crafting campaigns that resonate well.
Another growing trend for companies is using data analytics coupled with modeling - such as structural equation or discrete choice modeling - to inform positioning and messaging. While companies tend to trust hard data when developing creative marketing campaigns, these cannot be deployed effectively without first conducting qualitative research to uncover relevant category attributes (typically consumer needs matched with product features and benefits). Crucially, organizations must do this in a way that accurately conveys the customer’s own language.
At the end of the day, nothing is more important than creating relevant and compelling experiences for your customers, but doing so effectively requires deeper insights and primary research to know how to separate the signal from the noise. As marketers, we have to maintain balance – designing products and experiences that are grounded in both data intelligence and customer-led strategy – with qualitative research playing a central role in the process.