With the power to undertake more accurate and in-depth research than ever before, companies should have no trouble understanding their customers. Despite this, many businesses still struggle to predict consumer behaviour or tap into customer needs. Unfortunately, this can lead to an unfulfilled and unsatisfied customer base, and which can easily be enticed away by a competitor.
With so many tools at their disposal, a business’s failure to understand its customers may appear confounding at first. However, the digitisation which gave businesses a myriad of tools with which to investigate consumer attitudes may have also been responsible for making customers much harder to understand.
We exist in a time of rapid development. No sooner has one technology reached the market, than another is on the way. Almost every industry has been revolutionised in the digital era, and customer behaviour has become somewhat erratic as a result.
While companies could traditionally spend months or even years cultivating their customer base and monitoring behaviour, they have no such luxuries today. Indeed, a company could spend months monitoring customer behaviour and using their data to develop future strategies, only to discover that this behaviour has been drastically altered due to the arrival of new technology, product, service or business model.
Learning how to understand customers
In order for companies to understand their customer base, they must learn to use a range of research tools and insight methodologies. By bringing together various types of research practices, companies can access varied and reliable data, and use this to predict future consumer actions. While there are hundreds of research and analytics tools available, understanding customers in terms of their behaviour can be achieved by using a selection of the major research methods.
Take a holistic view
When conducting research into consumer behaviour, companies frequently focus on how individuals engage, use or discard products or services similar to their own. If you product a chocolate bar, for example, it may seem natural to focus your research on what chocolate customers are choosing, why they are making this selection when they consume sweet products and how the price affects their decision-making. Indeed, these are all valid and useful insights to have.
However, companies need to see more than just the target’s engagement relating to their industry. To really understand consumer behaviour, gaining an insight into the consumer’s day-to-day life is vital. Traditionally, this type of data simply wasn’t available in a significant enough sample size, but digitisation has made it possible to access this type of information. With online blogs, video diaries and picture uploads, consumers can easily participate in this type of research, and many choose to do so without any incentive at all.
Watching how consumers act can be enormously valuable for companies. Seeing how customers respond to product placements, branding and packaging in a real-life store environment can give considerable insight into what motivates them. As some consumer behaviour may be rooted in the subconscious, this type of research enables companies to pick up on behaviour and attitudes which the individual may be unaware of themselves.
Whilst people may misreport their behaviours or provide inaccurate reasons for their actions, observing them gives companies the opportunity to see how they actually behave and what variables motivate them to alter this behaviour.
Engage on social media
Social media enables brands to interact with their customer base and target market in a completely new way. With the option to remain anonymous, users may feel more able to be open and honest, whilst the sheer number of social media users ensure that businesses can access a decent sample size.
Furthermore, social media gives companies the opportunity to listen to their customers and show that they’re listening. By asking consumers for feedback and input, and then acting upon it, businesses are actively involving their customers and garnering their loyalty in return.
As well as interacting directly with consumers via social media, companies can monitor and ‘listen’ to interactions as well. This essentially provides an additional way of observing customers and ensures businesses are able to understand what is motivating them and why.
Social media platforms and online forums cater for every interest, demographic and sample, so any company can benefit from conducting this type of research. Whether it’s unearthing an unmet demand, finding something customers don’t like or improving a service to meet consumer needs, brands can gain significant insights into consumer behaviour by using social media platforms to listen and engage with them.
Cocreate with consumers
Companies often ask consumers for feedback after they’ve used their products or services but asking consumers to work with you to create a new product or service can be far more enticing. Consumers often have a clear idea of what they want and need from a product, and they’re more than happy to tell manufacturers and service providers! Digital platforms make it realistic for companies to engage with consumers on a large scale and doing so can enable them to take part in every stage of the development process.
By finding out what consumers want, from them directly, companies can avoid the uncertainty surrounding new products and services and tap into a demand which isn’t currently being met.
Access advanced analytics
Data is produced at an almost unfathomable rate and in quantities which are simply too big to analyse effectively. However, companies can easily establish which data is most relevant to them and their consumers and use this to gain a deeper understanding of consumer behaviours, attitudes and motivations.
Advanced analytics enables businesses to simulate product launches in various countries and even in particular cities, in order to determine which launch sites could result in the biggest profits. Similarly, advanced analytics can allow companies to draw data from various sources, compile it and analyse it in accordance with its own in-house customer profiles. With this type of information, businesses can successfully develop and market products to new customers more effectively than ever before.