How do you pronounce potato? Most would argue it’s po-tay-toe while others stand by saying it’s po-tah-toe. Either way, both words hold the same meaning. It’s not worth arguing about until you’re blue in the face.
However, there are plenty of other cases where the nuance in terminology is important. Take customer insights and market research. These terms are often used interchangeably to describe the research businesses conduct into their customers or target consumers. But there are key differences in the terminology that are worth understanding, even if the two terms are frequently used in similar ways..
Both customer insights and market research help businesses understand demographics, economic priorities, shopping behavior, and more, but the methods to gather such information vary. In this article, we’ll define and make use of each term so you can boost revenue and enhance current marketing strategies. Keep reading to learn more.
What Is Market Research?
Market research is the practice of gathering information about your market or the broader industry. It’s typically a straightforward process of asking targeted business questions and collecting data to answer them.
Market research uses factual and statistical data like demographics, population, consumer trends, market share, demand, and gaps in the market alongside information regarding sentiment, impressions, and buyer behavior.
You can use the information collected to answer important business questions and come to specific, actionable conclusions that will guide business decisions. Jumping in without clear questions to keep you on track and guide you toward your goals is one of the most common and costly market research mistakes.
What Is Customer Insights Research?
Customer insights research, also called consumer insights research (yes, these terms are often used interchangeably), analyzes data to learn more about the target market’s buyers. It uses data collected during initial market research to focus on customer-specific information.
This can include getting details about their customer experience, discovering their opinions about the product or service, and learning what unaddressed pain points or needs they have. That information can help you understand the reasons behind customer behaviors and get actionable insights into their choices.
Differences Between Market Research and Customer Insights
The terms market research and customer insights are often used interchangeably because they overlap. When you conduct market research, better understanding your customers and consumers is part of the broader goal.
Think of market research as a multi-purpose term describing any market or industry. It’s a broad umbrella term under which the narrower practice of customer insights research falls.
What Is the Purpose of Market Research?
Market research aims to gather wide-ranging information about your market/industry to identify current trends and conditions and answer specific business questions. This can help businesses understand the current and expected market conditions to guide decision-making.
For example, a business might consider developing a new product or moving into a new area. They would conduct market research to answer questions before moving forward. Some questions might include the following:
- What are the local demographics?
- Do these consumers make enough money to afford the product?
- Is there enough demand?
- Does the market have enough customers to be profitable?
- Is there a lot of competition?
- Are consumers particularly brand loyal?
This can prevent the business from making unprofitable decisions and clarify market trends and conditions to guide them in making an informed decision.
What Is the Purpose of Customer Insights?
When conducting customer insights research, the purpose is to interpret the data to gain a deeper understanding of consumers or customers. Interpreting data to determine customers’ perceptions, preferences, feelings, needs, experiences, and motivations is how you gain customer insights vs market research, which will simply gather information to get an overview of the bigger picture.
The focus shifts from trends in the market at large to trends in customer behavior. It gives you a human perspective rather than just numbers. That’s why some people prefer using the term human insights vs customer insights.
Learning why consumers do things requires customer insights over market research, which just tells you what they’re doing and what’s happening in the market. For example, market research can tell you what car is most popular in an area, while customer insights will tell you why buyers chose it.
Methods of Conducting Market Research
How you conduct market research will depend on individual factors like your company’s budget (though you can conduct DIY market research on a tight budget) and timetable. You should also tailor the process to your business goals..
Generally, there are two main methods of market research. You can do primary research or secondary research.
Primary research uses data a business collects. Secondary research uses existing data from other sources like public records and reports published by other companies.
It’s often easiest to start with secondary research since it’s fast and can be less expensive than conducting primary research. You can fill in data gaps using primary research methods like:
- Focus groups
- Email forms
- Feedback pop-ups
- Product/service use research
- Competitor analysis
Methods of Obtaining Customer Insights
Companies generally conduct customer insights research during the market research process, so it includes many of the methods listed above. You analyze and interpret that data during the customer insights research phase. One particularly useful and often overlooked source is your company’s own internal data.
Some data collection methods for customer insights not previously listed include:
- Internal sales data
- Customer service questions and complaints
- Product reviews
- Ad, social media, and website analytics
- Social media polls
- Employee interviews
- Customer persona research
- Market segmentation research
- A/B testing
Why Market Research Is Incomplete Without Customer Insights
Market research is helpful in a lot of ways. However, without customer insights, it’s incomplete.
Customer insights provide a look into customers’ minds. You can get specific information on exactly what people think and want from customer insights vs market research that just leaves you with a wider view.
Customer insights can tell you things about your customers, such as what they like and don’t like, how they make decisions, and why they choose certain products over others. They can also show you how customers feel about your products/services, brand, and the customer experience you provide.
They can even provide specific and actionable insights that you can use to adjust your strategy and products. You can learn what customers wish your product/services did, what product/services they need or want that your business and/or the broader market isn’t providing, and so much more. That’s why customer insights are so invaluable!
Frequently Asked Questions About Customer Insights and Market Research
Let’s finish with frequently asked questions to address some of the most common things people want to know. These will help provide information on more specific areas not already covered.
Is Market Research Qualitative or Quantitative?
Market research typically includes both qualitative and quantitative data.
Quantitative data is any data that can be assigned a numerical value. For example, the number of consumers who requested a free product sample through your website is a quantitative data point.
Qualitative data is descriptive data that is described in language but can’t be measured or counted. For example, the information you gain from your customers’ product reviews is a type of qualitative data.
How Often Should Market Research Be Done?
Often, businesses conduct agile market research on an ongoing basis. Market research is also crucial before making decisions like starting a business, releasing a product/service, or choosing a location, and again after to assess how things are going and make improvements.
How Should Businesses Use Customer Insights?
You should use customer insights to understand your customers and the consumers in your market. They should inform and guide your marketing strategy, products/services, and other business decisions to align with what customers want.
When done correctly, this can be the difference between success and failure. But remember, customer insights are vital for providing the whole picture. You can build a strategy to make your business more successful at every step with customer insights vs market research alone, which can only really give you an idea of the current market without explaining what to do about it.