‘How can I please my customers?’ is a million-dollar question. Companies struggle to understand how their customers make purchase decisions regarding the products and services offered by the company. As most studies have established, the decision-making by a customer is mostly irrational. There may not be any logic to it. Due to the explosion of social media, messaging apps etc., customer journey has become an extremely complex phenomenon. Customer expectations evolve too rapidly due to the access to information and social influence. A lot of these factors, apart from the actual product or service, affect customer decisions.
Since the very fate of your business is tied to the understanding of the customer, companies put a lot of effort and money into researching their customers, and are constantly on the lookout for more advanced and efficient methods of dealing with the deluge of data that is being generated every second.
This calls for a need to upgrade the techniques and methods of carrying out research to understand customer behavior as traditional market research fails to deal with the explosion of data – the opportunities as well as the complexities of it. Companies need to differentiate themselves in order to gain a competitive advantage over their rivals and also effectively streamline their businesses. In this such scenario, expanding the focus from market research to market analytics can be a game changer for businesses.
How to differentiate between the market research and market analytics?
McKinsey & Co. suggests that companies can be a part of the research revolution by paying attention to four key areas: 1) Leverage the Internet to rapidly obtain details about consumers; 2) Keep the limitations of focus groups in mind; 3) Learn how people shop; and 4) Link consumer attitudinal and behavioral data.
Based on the above, certain questions related to differentiation between market research from market analytics arise.
- How is the value derived from big data?
- How is data integrated to gain actionable insights?
- How to link consumer attitudinal and behavioral data?
- How is the immensely vast internet leveraged for real-time data and analysis?
Market research with its traditional methodologies has limitations and is unable to answer the challenges posed by the rapidly burgeoning data and the need to integrate customer data from various data sources and to analyze it in real time.
Traditional Market Research Approach
Traditional Market Research primarily consists of getting an overall feel of the customers by addressing strategic questions broadly raised by the management. The research, in that sense, is largely driven by what you already know. Market research broadly answers questions related to business aspects like product awareness, availability, packaging, placement, pricing, competition within the market, general sentiment of the customers within the target audience, brand loyalty, brand positioning, customer satisfaction aggregate and segment awareness, message effectiveness, and advertising recall among others.
Thus, market research helps in painting a broad, holistic picture of the customers and the marketplace. This is done by studying a sample from the universe. This study is time bound, and analysis done using statistical packages like SPSS and SAS. The findings of the study are presented to the management with or without strategic recommendations based on objectives.
Technology-Driven Market Analytics
The lives of people are increasingly being shifted to the virtual world. Online Media reveals anything and everything that a company needs to know about its consumers and the market. People discuss, comment, critique and post about products, services and provide details based on their general experience. They also rely more on the publicly shared opinion than a company’s advertised claims. This makes online media the most powerful platform for businesses to leverage their immense potential. However, to tap into the vast resource base, the traditional research techniques prove to be incompetent. This is exactly where the strength of analytics comes into the picture. Companies need advanced market analytics capable of transcending the confines of primary marketing research.
How Market Analytics trumps Market Research
There are a couple of factors which distinguish market analytics from traditional market research –
- Technology-driven: Market analytics is technology driven. This means it’s fast, accurate and can process large volumes of data significantly faster
- Discovery-oriented: Market analytics is more geared towards discovery of customer insights and prediction of customer behavior
- Big samples: Owing to the vastness of online media, the sample size for this type of analytics is virtually unlimited
- Data integration: Market analytics also has the ability to integrate customer data from multiple sources like contact centers, customer surveys as well social media
- Real-time analytics: Market analytics generates and communicates the customer insights in real-time via custom dashboards, email, and smartphone alerts
- Text analytics: Market analytics lends you the ability to analyze text data at scale
- Predictive analytics: Market analytics lends you the ability to map customer journeys more accurately, predict customer behavior and take pre-emptive actions
All these aspects of market analytics lead to very accurate customer insights which lead to concrete actions that deliver a very high ROI.