Market research is a fundamental part of creating a market-oriented business, but it can require time and money. Airbnb illustrates the value in making space for research that drives better marketing decisions
Do you know what really makes the difference to your customers when they’re choosing whether to spend with you? Not just the obvious things – value for money, convenience, a product that solves a problem, for example – but the specific frustrations or pain points they’re trying to solve for, that ultimately make them choose your product.
If your planning process doesn’t involve speaking to target customers or seeking out research that informs your view, the answer must be ‘no’.
Market research, as Mark Ritson explains on the MiniMBA in Marketing, is a fundamental part of building a successful marketing strategy: it provides illumination. It also supports a company’s quest to be market oriented, to build, market and sell a product that meets the needs of its target customers. How can you be market oriented if you don’t truly understand the needs and wants of your customers?
Read next: How customer-centric is your brand? Understanding the MORTN Scale
If you form opinions on the needs and wants of your potential customers based on your own experiences, or those of colleagues, you’re not truly reflecting what the market thinks or needs; you’re not market oriented. As Mark Ritson drives home again and again: “You are not the consumer”. Even if you buy your company’s products (or would consider doing so), once you’ve become an employee, and in doing so crossed that line from consumer to producer, you are no longer the target customer.
Great market research informs marketing strategy and should also inform the tactical elements of the plan that follow.
A few years ago, Airbnb launched a well-regarded campaign built directly in response to market research that unearthed specific reasons that guests might opt for an Airbnb over a hotel room.
“When you share a hotel room with your kid, you also share a bedtime with your kid”, runs one ad.
In a few seconds, Airbnb was saying to one big set of target customers: ‘we understand that staying in a hotel room with your children can mean trade-offs; we know a better way’.
It was the first line of a beautifully animated videos, each one exploring separate customer frustrations with staying in hotels and attempting to position Airbnb as a better alternative.
Each ad explores a different, quite specific customer irritation – from going on holiday with friends, only to spend most of your time in the hotel apart in separate rooms; to seeking the peace and quiet of nature, only to find yourself in a huge building with hundreds of other people. Each video concluded with the same line: “Some trips are better in an Airbnb”.
They’re simple stories, brilliantly told, and great illustrations of a company seeking to engage with different audiences by seeking to understand them. Airbnb translated that understanding into messaging that really resonated, because it was relatable.
Airbnb translated that understanding into messaging that really resonated
Good market research also underpins how a company segments its market and prioritises which segments it will target. Its research may be reflected in its business objectives and a whole host of other measures, such as the quality of the customer experience and how it seeks competitive advantage.
If you pulled together a group of Airbnb employees and asked them to tell you why families sometimes prefer an Airbnb to a hotel, what would they say? Is it price, or maybe space? Perhaps hotel locations are the problem, or they want to cook their own meals. There could be many reasons.
It’s only by talking to real people, target customers, that marketers can really expose what makes the difference. Price, location, facilities… maybe they were all mentioned, but the value in market research is in identifying those super valuable insights that expose how companies can really lock-in their customers.
In the example above, Airbnb identified that their product was attractive to families that didn’t want to be stuck in a single room once some of them were in asleep. They wanted extra space for the evening.
Research can help you get beyond obvious, surface-level reasons that make people make (or change) decisions
Market researchers try to seek out non-obvious insights so they can really understand what is driving purchasing decisions of their target customers. Research can help you get beyond obvious, surface-level reasons that make people make (or change) decisions.
Market research methods: what, why and when
Secondary research, such as reports compiled by industry analysts, is often a valuable starting point for marketers. It is typically quite affordable and can usually be accessed quickly, so no waiting around for answers. It probably won’t answer all of your questions, but it should help you take an early view of your market and start to think about how you might segment your customers and target your marketing.
Primary research tends to offer the most valuable insights, albeit at a cost – both time and money. This can take the form of qualitative work, such as one-to-one interviews and small focus groups, or quantitative work, such as surveys to large numbers of people. Qualitative work can be great for identifying unforeseen motivations, while quantitative work can be valuable for validating and testing potential approaches, or gauging customer satisfaction in a way that stands up to statistical scrutiny.
Ethnographic research, which involves deep immersion with your target customers, is a means of really grasping how they use and think about your products. This can involve visiting them at home or in their office and watching how they use or talk about your products. Qualitative techniques such as this aren’t intended to be representative, though.
Quantitative techniques, such as surveys, can help you build a robust, representative view of your customers by testing some of the findings from your earlier research and seeking additional information.
Marketers can also build further research activity into their planning process, such as a focus group, to validate their marketing strategy and tactical plans as they’re developed.
The Jobs To Be Done approach
Market research tends to focus on identifying customer pain points. However, marketers sometimes talk instead about how customers have ‘Jobs To Be Done (JTBD)’. Using research to identify what customers are looking to achieve – the jobs they need to do – can be a valuable way to understand the motivations of those customers.
For example, somebody staying at a hotel by an airport might be there not because it is a fabulous hotel, but instead to avoid a late night drive home (a job) or make sure they don’t miss their early departure (an alternative job). That information can then drive marketing segmentation, targeting, positioning and messaging.
It’s important for marketers to understand which research approach is right in each situation. When will secondary research be sufficient and when does the team need to invest in its own primary research? And when does a survey beat small group interviews? Budget and time are often constraints that help determine the answers to these questions.
the best performing companies are those that build customer insight into the way they work
In my experience of leading marketing teams, the best performing companies are those that build customer insight into the way they work. Understanding customers in a structured way is important to those companies – and that influences team structures and processes.
The best marketing teams are customer-led, informed by the customer and using that exposure to inform strategies and plans.
Maggie Chan Jones, a renowned technology-industry CMO puts it like this: “As a CMO, I want my business to be the disruptor not the disrupted. The only way to do that is to put the customer in the centre and anticipate, predict and create the future with deep insight and data.”
Research takes time and, often, requires budget, so marketers need to make space for it. Ideally, marketing leaders can invest in people or build relationships with external partners to have a means of conducting or commissioning research.
when time and money are tight, imperfect research is better than no research
However, when time and money are tight, imperfect research is better than no research. A series of one-to-one interviews with target customers can be extremely valuable and conducted by the team relatively easily and at no cost, acting as a strong starting point for future work. Those interviews can, in my experience, highlight where existing assumptions, often informed by internal views, aren’t quite right. And in turn, those insights can help make the case for further investment in research.
Without market research, Airbnb could well have been telling target customers that it’s a more logical solution, a more efficient solution. With market research, the company sought to identify the emotional triggers that really engaged audiences.
That’s the value in really understanding your customers.
Join Mark Ritson on the MiniMBA in Marketing and you’ll learn about the importance of market orientation, the role market research plays in helping you achieve that and why you’re not the customer (even if you might think you are).
Cover: Airbnb