Getting the Most Out of Your Customer Research

Back when I used to sit on the client side of the table, when I got a chance to review reports from market research or management consulting firms I often saw them offer overly-grand recommendations, and it would really irritate me.

Here’s the kind of thing I mean (paraphrased to protect the innocent and guilty alike): “You should introduce Whizbang Product immediately, because clients want it!” Well, if all you’ve done is talk to clients, sure, maybe that’s what they want, and you can report that, but you’re a long way from being able to recommend that it be introduced.

Maybe the product would be wildly unprofitable. Maybe it would make it easier for your customers to then switch to competitor products. Maybe it would cannibalize existing sales at lower revenues. Maybe execution is all-but-physically-impossible at a reasonable price. Maybe your distributors would stampede for the exits if you offered that product.

Of course, we do a lot of work in primary customer research (my blog post “That’s why we ask the clients!” speaks to this more directly). We think it’s critical for companies to have a deep, rich, and frequent (ideally ongoing/real-time) dialogue with their customers. But if all you’ve done is look at the priorities of the customers, you can’t yet develop a full strategic response to the market.

When we conduct projects focusing just on customer insights and research, often the trickiest part is the recommendations – we have some thoughts on what our clients might do about what we’ve found out from their target market, we can suggest directions to explore or areas to assess, but not beyond that. In other projects, where we’ve also done a thorough review of their internal capabilities, and a full competitive analysis, then we are in more of a position to make strategic recommendations and help formulate an action plan. We’re not being stingy with our insights in taking this approach, though; we can’t reasonably claim expertise we haven’t yet earned by doing the work that enables us to comment more broadly.

Some tips, then, if you are going to commission primary research but not a full strategic assessment, in order to maximize the value you get out of it (and to avoid the kind of aggravation that I experienced on the client side):

• Clarify the boundaries and objectives you’re setting for the project and guide your consultants accordingly. What’s in, what’s out? (Don’t forget to clarify this with internal stakeholders as well.)
• Give your consultant a good overview of where the project fits into the rest of your strategy. They (we) can be so much smarter about the research, analysis and recommendations, with just a bit of context. If for some reason (e.g. confidentiality), be upfront about that as well, and remember that the researcher may be a little bit off in their recommendations as a result (but will also bring some fresh perspectives).
• Think about whether it is really in your best interest to spend a little more on the project to get a broader set of recommendations, if only to give you and your team something more fulsome to respond to for what is often a relatively small investment. Add a competitive analysis, or an internal assessment, perhaps.
• Regardless of the scope of the project, build time and allocate internal resources for dealing with its results. If you want to use this information to make strategic decisions, and especially if you are only outsourcing a relatively small proportion of the work, then someone will need to find the time to incorporate the research results into the bigger picture so that you get the real value out of it.
• Set up adequate time to discuss the research findings and implications with the consultants. Those discussions can be illuminating well beyond what’s written on the page. Coming back for a second discussion a few weeks later is another great idea.
• If the consultants have given you some of those categorical recommendations that so bothered me in my previous life, just back up a page and use the results of the core research they have provided. It may well be that you will arrive at the same conclusion, but you will need to do the hard work to get there.

What do you think are the tricks to getting the most use from customer research? What are the challenges in integrating external research into internal decision-making?