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Editor's note: Renee Smith is chief research officer, GutCheck. 

In a world where three-fourths of all consumers say they would be willing to choose, recommend or pay more for a brand that provides a personalized service or experience (Forrester 2015, Epsilon 2018), it’s imperative for brands to know their customers. Billions of dollars are being spent by marketers to personalize products, services and communications for their customers and prospects.

Yet, in this year’s Quirk’s Q Report, when asked, “How well does your organization know its customers?” almost half of all market research buyers indicated deficiencies or substantial gaps in organizational knowledge of their customers.1

When asked about the biggest barrier to improving their customer knowledge, 47 percent selected a “lack of resources (money, time, personnel) for doing so” followed by “other” at 15 percent and “lack of provable ROI for doing so” at 11 percent.2

In short, about half of all market research buyers say they need more information about their customers and about half say they face constraints from lack of time, money and staff to obtain it. Did we, as market research providers, know that about our customers? And if we knew, or now that we know, what are we doing about it?

One way suppliers can help market research buyers get more granular customer knowledge is to avoid testing concepts and ads only among the general population or broad category users. Testing directly with a more targeted audience or using a targeted augment sample can help our market research buyers obtain insights relevant to personalization before they develop or launch a new product or service.

A second way we can help our market research clients know more about their customers is to arm them with insights about key subsets of consumers that we identify in-the-moment as we conduct other research for them. If while conducting a concept test we find that 40 percent of respondents are top-box favorable to a concept, we have identified an additional segment of consumers that we can profile on attitudes and behaviors. And if we move beyond survey-only profiling to include non-survey data, we can do this in a very agile way. Profiles of these in-the-moment audiences can feed into the creative brief or can be used to develop personalized offers, messaging or product features.

A third option for helping research buyers obtain customer information relevant to personalization is to think differently about segmentation and needs studies. Traditional segmentation, need-state or demand-space studies remain expensive – often $100K or more – and time-consuming, typically taking six-to-12 weeks. Sometimes these traditional studies are necessary and useful. But it’s likely time to rethink these studies to evaluate whether applying automation and/or combining big data with survey data and/or applying agile market research principles can shorten turnaround times and provide more cost-effective options for today’s market research buyers.

Currently, hundreds of millions, and perhaps billions, of dollars are being spent on systems and analytics to support in-market testing and optimization of personalized offers and messaging after a new product or line extension launches. But if we more systematically gather and feedforward customer and prospect information relevant to personalization, then identifying optimal combinations of product features, claims, packaging and ads for different types of customers can begin prior to launch, making post-launch optimization efforts more efficient. For example, if we know prior to launch that the dominant personality trait of top-box concept favorables is conscientiousness, that knowledge can be provided to the marketing team and used to tailor messaging so that fewer in-market iterations are needed before the optimal set of messages is found.

In short, we need to think of every pre-market study as an opportunity to gather more information on personalization (e.g., concept-favorable audiences, high ad engagement audiences, segment and persona audiences, etc.). We also need to revamp how we help our market research buyers obtain strategic insights about consumers by applying agile market research principles and combining survey and non-survey data for greater depth at less time and cost.

The biggest barriers market research buyers cite to obtaining more customer knowledge – a lack of time, money and personnel – are the same barriers that market research buyers were raising with us seven-to-10 years ago. And that buyer pain point led to the rise of agile market research approaches. We applied agile principles then and clients received insights faster and at a lower cost. Today’s market research buyers still have an unmet need. Let’s talk with them to learn more about their needs and identify agile ways to help them gain more customer knowledge so we can support their personalization strategies even before market entry or a product launch. 

Common threads

Researchers share their takes on internal customer knowledge

Know Customers Well

Typical among the positive responses were explicit references to customer experience or sometimes integration of customer knowledge into the strategy. 

“Increasingly well over years using different methods/techniques and approaches like market research/UXR/internal data analysis.”

“Really well actually – we have been at the cutting edge of customer experience (with emphasis on the member) for many years.”

“Very well. Despite hurdles we do a good job of understanding consumers and customers and integrating into strategy.”

But there was also a sense, among some, that what they know may not be enough.

“Well. However, we have been too focused on thinking of them as consumers, not people. This means we know everything about how they use/choose our products and the category, but much less about their full lives. And hence we haven’t connected to them on their key issues – people don’t spend their entire day thinking about our categories.”

Not Well or Notable Deficiencies

Among those who expressed challenges, the size of the deficiency varied widely.

“We know so little it’s embarrassing.”

“Depth of knowledge varies from brand to brand. For critical brands, we know our consumers and retailers extremely well. For small brands, knowledge is more limited.”

“Not so well, not enough segmentation and needs studies.”

And there were direct references to a lack of knowledge for personalization.

“We know who they are, but not much else that would help personalize experiences.”

“Overall very well, but yet not very well at a segmented level. We’re working proactively with the business divisions to recommend activation around personas to inform product and experience design.”

References

“The power of me: The impact of personalization on marketing performance.” 2018. Epsilon Data Management LLC. 

“Power of Personalization.” 2015. Forrester Research, Inc.

Footnotes

1 Quirk’s posed the question, “How well do you feel your organization knows its customers?” to respondents who said the primary product produced by their company is not market research. 556 respondents answered this open-ended question.

2 872 respondents answered this single-response question: “What is the biggest barrier to your organization improving its understanding of its customers?” Other responses included “lack of C-level support for doing so” at 8 percent, “low response rates to our customer surveys” at 7 percent, “available tools for understanding customers are not effective for us” at 6 percent and “lack of internal faith in the insights department” at 5 percent.