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Consumer Research: Examples, Process and Scope

What is Consumer Research?

Consumer research is a part of market research in which inclination, motivation and purchase behavior of the targeted customers are identified. Consumer research helps businesses or organizations understand customer psychology and create detailed purchasing behavior profiles.

It uses research techniques to provide systematic information about what customers need. Using this information brands can make changes in their products and services, making them more customer-centric thereby increasing customer satisfaction. This will in turn help to boost business.

LEARN ABOUT: Market research vs marketing research

An organization that has an in-depth understanding about the customer decision-making process, is most likely to design a product, put a certain price tag to it, establish distribution centers and promote a product based on consumer research insights such that it produces increased consumer interest and purchases.

For example, A consumer electronics company wants to understand, thought process of a consumer when purchasing an electronic device, which can help a company to launch new products, manage the supply of the stock, etc. Carrying out a Consumer electronics survey can be useful to understand the market demand, understand the flaws in their product and also find out research problems in the various processes that influence the purchase of their goods. A consumer electronics survey can be helpful to gather information about the shopping experiences of consumers when purchasing electronics. which can enable a company to make well-informed and wise decisions regarding their products and services.

LEARN ABOUT: Test Market Demand

Consumer Research Objectives

When a brand is developing a new product, consumer research is conducted to understand what consumers want or need in a product, what attributes are missing and what are they looking for? An efficient survey software really makes it easy for organizations to conduct efficient research.

Consumer research is conducted to improve brand equity. A brand needs to know what consumers think when buying a product or service offered by a brand. Every good business idea needs efficient consumer research for it to be successful. Consumer insights are essential to determine brand positioning among consumers.

Consumer research is conducted to boost sales. The objective of consumer research is to look into various territories of consumer psychology and understand their buying pattern, what kind of packaging they like and other similar attributes that help brands to sell their products and services better.

LEARN ABOUT: Brand health

Consumer Research Model

According to a study conducted, till a decade ago, researchers thought differently about the consumer psychology, where little or no emphasis was put on emotions, mood or the situation that could influence a customer’s buying decision.

Many believed marketing was applied economics. Consumers always took decisions based on statistics and math and evaluated goods and services rationally and then selected items from those brands that gave them the highest customer satisfaction at the lowest cost.

However, this is no longer the situation. Consumers are very well aware of brands and their competitors. A loyal customer is the one who would not only return to repeatedly purchase from a brand but also, recommend his/her family and friends to buy from the same brand even if the prices are slightly higher but provides an exceptional customer service for products purchased or services offered.

Here is where the Net Promoter Score (NPS) helps brands identify brand loyalty and customer satisfaction with their consumers. Net Promoter Score consumer survey uses a single question that is sent to customers to identify their brand loyalty and level of customer satisfaction. Response to this question is measured on a scale between 0-10 and based on this consumers can be identified as:

Detractors: Who have given a score between 0-6.

Passives: Who have given a score between 7-8.

Promoters: Who have given a score between 9-10.

Consumer market research is based on two types of research method:

1. Qualitative Consumer Research

Qualitative research is descriptive in nature, It’s a method that uses open-ended questions , to gain meaningful insights from respondents and heavily relies on the following market research methods:

Focus Groups: Focus groups as the name suggests is a small group of highly validated subject experts who come together to analyze a product or service. Focus group comprises of 6-10 respondents. A moderator is assigned to the focus group, who helps facilitate discussions among the members to draw meaningful insights

One-to-one Interview: This is a more conversational method, where the researcher asks open-ended questions to collect data from the respondents. This method heavily depends on the expertise of the researcher. How much the researcher is able to probe with relevant questions to get maximum insights. This is a time-consuming method and can take more than one attempt to gain the desired insights.

LEARN ABOUT: Qualitative Interview

Content/ Text Analysis: Text analysis is a qualitative research method where researchers analyze social life by decoding words and images from the documents available. Researchers analyze the context in which the images are used and draw conclusions from them. Social media is an example of text analysis. In the last decade or so, inferences are drawn based on consumer behavior on social media.

Learn More: How to conduct Qualitative Research

2.Quantitative Consumer Research

In the age of technology and information, meaningful data is more precious than platinum. Billion dollar companies have risen and fallen on how well they have been able to collect and analyze data, to draw validated insights.

Quantitative research is all about numbers and statistics. An evolved consumer who purchases regularly can vouch for how customer-centric businesses have become today. It’s all about customer satisfaction , to gain loyal customers. With just one questions companies are able to collect data, that has the power to make or break a company. Net Promoter Score question , “On a scale from 0-10 how likely are you to recommend our brand to your family or friends?”

How organic word-of-mouth is influencing consumer behavior and how they need to spend less on advertising and invest their time and resources to make sure they provide exceptional customer service.

LEARN ABOUT: Behavioral Targeting

Online surveys , questionnaires , and polls are the preferred data collection tools. Data that is obtained from consumers is then statistically, mathematically and numerically evaluated to understand consumer preference.

Learn more: How to carry out Quantitative Research

Consumer Research Process

The process of consumer research started as an extension of the process of market research . As the findings of market research is used to improve the decision-making capacity of an organization or business, similar is with consumer research.

LEARN ABOUT: Market research industry

The consumer research process can be broken down into the following steps:

Develop research objectives: The first step to the consumer research process is to clearly define the research objective, the purpose of research, why is the research being conducted, to understand what? A clear statement of purpose can help emphasize the purpose.
Collect Secondary data: Collect secondary data first, it helps in understanding if research has been conducted earlier and if there are any pieces of evidence related to the subject matter that can be used by an organization to make informed decisions regarding consumers.
Primary Research: In primary research organizations or businesses collect their own data or employ a third party to collect data on their behalf. This research makes use of various data collection methods ( qualitative and quantitative ) that helps researchers collect data first hand.

LEARN ABOUT: Best Data Collection Tools

Collect and analyze data: Data is collected and analyzed and inference is drawn to understand consumer behavior and purchase pattern.
Prepare report: Finally, a report is prepared for all the findings by analyzing data collected so that organizations are able to make informed decisions and think of all probabilities related to consumer behavior. By putting the study into practice, organizations can become customer-centric and manufacture products or render services that will help them achieve excellent customer satisfaction.

LEARN ABOUT: market research trends

After Consumer Research Process

Once you have been able to successfully carry out the consumer research process , investigate and break paradigms. What consumers need should be a part of market research design and should be carried out regularly. Consumer research provides more in-depth information about the needs, wants, expectations and behavior analytics of clients.

By identifying this information successfully, strategies that are used to attract consumers can be made better and businesses can make a profit by knowing what consumers want exactly. It is also important to understand and know thoroughly the buying behavior of consumers to know their attitude towards brands and products.

The identification of consumer needs, as well as their preferences, allows a business to adapt to new business and develop a detailed marketing plan that will surely work. The following pointers can help. Completing this process will help you:

Attract more customers
Set the best price for your products
Create the right marketing message
Increase the quantity that satisfies the demand of its clients
Increase the frequency of visits to their clients
Increase your sales
Reduce costs
Refine your approach to the customer service process .

LEARN ABOUT: Behavioral Research

Consumer Research Methods

Consumers are the reason for a business to run and flourish. Gathering enough information about consumers is never going to hurt any business, in fact, it will only add up to the information a business would need to associate with its consumers and manufacture products that will help their business refine and grow.

Following are consumer research methods that ensure you are in tandem with the consumers and understand their needs:

The studies of customer satisfaction

One can determine the degree of satisfaction of consumers in relation to the quality of products through:

Informal methods such as conversations with staff about products and services according to the dashboards.
Past and present questionnaires/ surveys that consumers might have filled that identify their needs.

T he investigation of the consumer decision process

It is very interesting to know the consumer’s needs, what motivates them to buy, and how is the decision-making process carried out, though:

Deploying relevant surveys and receiving responses from a target intended audience .

Proof of concept

Businesses can test how well accepted their marketing ideas are by:

The use of surveys to find out if current or potential consumer see your products as a rational and useful benefit.
Conducting personal interviews or focus group sessions with clients to understand how they respond to marketing ideas.

Knowing your market position

You can find out how your current and potential consumers see your products, and how they compare it with your competitors by:

Sales figures talk louder than any other aspect, once you get to know the comparison in the sales figures it is easy to understand your market position within the market segment.
Attitudes of consumers while making a purchase also helps in understanding the market hold.

Branding tests and user experience

You can determine how your customers feel with their brands and product names by:

The use of focus groups and surveys designed to assess emotional responses to your products and brands.
The participation of researchers to study the performance of their brand in the market through existing and available brand measurement research.

Price changes

You can investigate how your customers accept or not the price changes by using formulas that measure the revenue – multiplying the number of items you sold, by the price of each item. These tests allow you to calculate if your total income increases or decreases after making the price changes by:

Calculation of changes in the quantities of products demanded by their customers, together with changes in the price of the product.
Measure the impact of the price on the demand of the product according to the needs of the client.

Social media monitoring

Another way to measure feedback and your customer service is by controlling your commitment to social media and feedback. Social networks (especially Facebook) are becoming a common element of the commercialization of many businesses and are increasingly used by their customers to provide information on customer needs, service experiences, share and file customer complaints . It can also be used to run surveys and test concepts. If handled well, it can be one of the most powerful research tools of the client management . I also recommend reading: How to conduct market research through social networks.

Customer Research Questions

Asking the right question is the most important part of conducting research. Moreover, if it’s consumer research, questions should be asked in a manner to gather maximum insights from consumers. Here are some consumer research questions for your next research:

Who in your household takes purchasing decisions?
Where do you go looking for ______________ (product)?
How long does it take you to make a buying decision?
How far are you willing to travel to buy ___________(product)?
What features do you look for when you purchase ____________ (product)?
What motivates you to buy_____________ (product)?

See more consumer research survey questions:

Customer satisfaction surveys

Voice of customer surveys

Product surveys

Service evaluation surveys

Mortgage Survey Questions

Importance of Consumer Research

Launching a product or offering new services can be quite an exciting time for a brand. However, there are a lot of aspects that need to be taken into consideration while a band has something new to offer to consumers.

LEARN ABOUT: User Experience Research

Here is where consumer research plays a pivotal role. The importance of consumer research cannot be emphasized more. Following points summarizes the importance of consumer research:

To understand market readiness: However good a product or service may be, consumers have to be ready to accept it. Creating a product requires investments which in return expect ROI from product or service purchases. However, if a market is mature enough to accept this utility, it has a low chance of succeeding by tapping into market potential . Therefore, before launching a product or service, organizations need to conduct consumer research, to understand if people are ready to spend on the utility it provides.
Identify target consumers: By conducting consumer research, brands and organizations can understand their target market based on geographic segmentation and know who exactly is interested in buying their products. According to the data or feedback received from the consumer, research brands can even customize their marketing and branding approach to better appeal to the specific consumer segment.

LEARN ABOUT: Marketing Insight

Product/Service updates through feedback: Conducting consumer research, provides valuable feedback from consumers about the attributes and features of products and services. This feedback enables organizations to understand consumer perception and provide a more suitable solution based on actual market needs which helps them tweak their offering to perfection.

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The past, present, and future of consumer research

Published: 13 June 2020
Volume 31 , pages 137–149, ( 2020 )

Cite this article

Maayan S. Malter ORCID: orcid.org/0000-0003-0383-7925 1 ,
Morris B. Holbrook 1 ,
Barbara E. Kahn 2 ,
Jeffrey R. Parker 3 &
Donald R. Lehmann 1

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In this article, we document the evolution of research trends (concepts, methods, and aims) within the field of consumer behavior, from the time of its early development to the present day, as a multidisciplinary area of research within marketing. We describe current changes in retailing and real-world consumption and offer suggestions on how to use observations of consumption phenomena to generate new and interesting consumer behavior research questions. Consumption continues to change with technological advancements and shifts in consumers’ values and goals. We cannot know the exact shape of things to come, but we polled a sample of leading scholars and summarize their predictions on where the field may be headed in the next twenty years.

Consumer Behavior Research Methods

Consumer dynamics: theories, methods, and emerging directions

Understanding effect sizes in consumer psychology

Avoid common mistakes on your manuscript.

1 Introduction

Beginning in the late 1950s, business schools shifted from descriptive and practitioner-focused studies to more theoretically driven and academically rigorous research (Dahl et al. 1959 ). As the field expanded from an applied form of economics to embrace theories and methodologies from psychology, sociology, anthropology, and statistics, there was an increased emphasis on understanding the thoughts, desires, and experiences of individual consumers. For academic marketing, this meant that research not only focused on the decisions and strategies of marketing managers but also on the decisions and thought processes on the other side of the market—customers.

Since then, the academic study of consumer behavior has evolved and incorporated concepts and methods, not only from marketing at large but also from related social science disciplines, and from the ever-changing landscape of real-world consumption behavior. Its position as an area of study within a larger discipline that comprises researchers from diverse theoretical backgrounds and methodological training has stirred debates over its identity. One article describes consumer behavior as a multidisciplinary subdiscipline of marketing “characterized by the study of people operating in a consumer role involving acquisition, consumption, and disposition of marketplace products, services, and experiences” (MacInnis and Folkes 2009 , p. 900).

This article reviews the evolution of the field of consumer behavior over the past half century, describes its current status, and predicts how it may evolve over the next twenty years. Our review is by no means a comprehensive history of the field (see Schumann et al. 2008 ; Rapp and Hill 2015 ; Wang et al. 2015 ; Wilkie and Moore 2003 , to name a few) but rather focuses on a few key thematic developments. Though we observe many major shifts during this period, certain questions and debates have persisted: Does consumer behavior research need to be relevant to marketing managers or is there intrinsic value from studying the consumer as a project pursued for its own sake? What counts as consumption: only consumption from traditional marketplace transactions or also consumption in a broader sense of non-marketplace interactions? Which are the most appropriate theoretical traditions and methodological tools for addressing questions in consumer behavior research?

2 A brief history of consumer research over the past sixty years—1960 to 2020

In 1969, the Association for Consumer Research was founded and a yearly conference to share marketing research specifically from the consumer’s perspective was instituted. This event marked the culmination of the growing interest in the topic by formalizing it as an area of research within marketing (consumer psychology had become a formalized branch of psychology within the APA in 1960). So, what was consumer behavior before 1969? Scanning current consumer-behavior doctoral seminar syllabi reveals few works predating 1969, with most of those coming from psychology and economics, namely Herbert Simon’s A Behavioral Model of Rational Choice (1955), Abraham Maslow’s A Theory of Human Motivation (1943), and Ernest Dichter’s Handbook of Consumer Motivations (1964). In short, research that illuminated and informed our understanding of consumer behavior prior to 1969 rarely focused on marketing-specific topics, much less consumers or consumption (Dichter’s handbook being a notable exception). Yet, these works were crucial to the rise of consumer behavior research because, in the decades after 1969, there was a shift within academic marketing to thinking about research from a behavioral or decision science perspective (Wilkie and Moore 2003 ). The following section details some ways in which this shift occurred. We draw on a framework proposed by the philosopher Larry Laudan ( 1986 ), who distinguished among three inter-related aspects of scientific inquiry—namely, concepts (the relevant ideas, theories, hypotheses, and constructs); methods (the techniques employed to test and validate these concepts); and aims (the purposes or goals that motivate the investigation).

2.1 Key concepts in the late - 1960s

During the late-1960s, we tended to view the buyer as a computer-like machine for processing information according to various formal rules that embody economic rationality to form a preference for one or another option in order to arrive at a purchase decision. This view tended to manifest itself in a couple of conspicuous ways. The first was a model of buyer behavior introduced by John Howard in 1963 in the second edition of his marketing textbook and quickly adopted by virtually every theorist working in our field—including, Howard and Sheth (of course), Engel-Kollat-&-Blackwell, Franco Nicosia, Alan Andreasen, Jim Bettman, and Joel Cohen. Howard’s great innovation—which he based on a scheme that he had found in the work of Plato (namely, the linkages among Cognition, Affect, and Conation)—took the form of a boxes-and-arrows formulation heavily influenced by the approach to organizational behavior theory that Howard (University of Pittsburgh) had picked up from Herbert Simon (Carnegie Melon University). The model represented a chain of events

where I = inputs of information (from advertising, word-of-mouth, brand features, etc.); C = cognitions (beliefs or perceptions about a brand); A = Affect (liking or preference for the brand); B = behavior (purchase of the brand); and S = satisfaction (post-purchase evaluation of the brand that feeds back onto earlier stages of the sequence, according to a learning model in which reinforced behavior tends to be repeated). This formulation lay at the heart of Howard’s work, which he updated, elaborated on, and streamlined over the remainder of his career. Importantly, it informed virtually every buyer-behavior model that blossomed forth during the last half of the twentieth century.

To represent the link between cognitions and affect, buyer-behavior researchers used various forms of the multi-attribute attitude model (MAAM), originally proposed by psychologists such as Fishbein and Rosenberg as part of what Fishbein and Ajzen ( 1975 ) called the theory of reasoned action. Under MAAM, cognitions (beliefs about brand attributes) are weighted by their importance and summed to create an explanation or prediction of affect (liking for a brand or preference for one brand versus another), which in turn determines behavior (choice of a brand or intention to purchase a brand). This took the work of economist Kelvin Lancaster (with whom Howard interacted), which assumed attitude was based on objective attributes, and extended it to include subjective ones (Lancaster 1966 ; Ratchford 1975 ). Overall, the set of concepts that prevailed in the late-1960s assumed the buyer exhibited economic rationality and acted as a computer-like information-processing machine when making purchase decisions.

2.2 Favored methods in the late-1960s

The methods favored during the late-1960s tended to be almost exclusively neo-positivistic in nature. That is, buyer-behavior research adopted the kinds of methodological rigor that we associate with the physical sciences and the hypothetico-deductive approaches advocated by the neo-positivistic philosophers of science.

Thus, the accepted approaches tended to be either experimental or survey based. For example, numerous laboratory studies tested variations of the MAAM and focused on questions about how to measure beliefs, how to weight the beliefs, how to combine the weighted beliefs, and so forth (e.g., Beckwith and Lehmann 1973 ). Here again, these assumed a rational economic decision-maker who processed information something like a computer.

Seeking rigor, buyer-behavior studies tended to be quantitative in their analyses, employing multivariate statistics, structural equation models, multidimensional scaling, conjoint analysis, and other mathematically sophisticated techniques. For example, various attempts to test the ICABS formulation developed simultaneous (now called structural) equation models such as those deployed by Farley and Ring ( 1970 , 1974 ) to test the Howard and Sheth ( 1969 ) model and by Beckwith and Lehmann ( 1973 ) to measure halo effects.

2.3 Aims in the late-1960s

During this time period, buyer-behavior research was still considered a subdivision of marketing research, the purpose of which was to provide insights useful to marketing managers in making strategic decisions. Essentially, every paper concluded with a section on “Implications for Marketing Managers.” Authors who failed to conform to this expectation could generally count on having their work rejected by leading journals such as the Journal of Marketing Research ( JMR ) and the Journal of Marketing ( JM ).

2.4 Summary—the three R’s in the late-1960s

Starting in the late-1960s to the early-1980s, virtually every buyer-behavior researcher followed the traditional approach to concepts, methods, and aims, now encapsulated under what we might call the three R’s —namely, rationality , rigor , and relevance . However, as we transitioned into the 1980s and beyond, that changed as some (though by no means all) consumer researchers began to expand their approaches and to evolve different perspectives.

2.5 Concepts after 1980

In some circles, the traditional emphasis on the buyer’s rationality—that is, a view of the buyer as a rational-economic, decision-oriented, information-processing, computer-like machine for making choices—began to evolve in at least two primary ways.

First, behavioral economics (originally studied in marketing under the label Behavioral Decision Theory)—developed in psychology by Kahneman and Tversky, in economics by Thaler, and applied in marketing by a number of forward-thinking theorists (e.g., Eric Johnson, Jim Bettman, John Payne, Itamar Simonson, Jay Russo, Joel Huber, and more recently, Dan Ariely)—challenged the rationality of consumers as decision-makers. It was shown that numerous commonly used decision heuristics depart from rational choice and are exceptions to the traditional assumptions of economic rationality. This trend shed light on understanding consumer financial decision-making (Prelec and Loewenstein 1998 ; Gourville 1998 ; Lynch Jr 2011 ) and how to develop “nudges” to help consumers make better decisions for their personal finances (summarized in Johnson et al. 2012 ).

Second, the emerging experiential view (anticipated by Alderson, Levy, and others; developed by Holbrook and Hirschman, and embellished by Schmitt, Pine, and Gilmore, and countless followers) regarded consumers as flesh-and-blood human beings (rather than as information-processing computer-like machines), focused on hedonic aspects of consumption, and expanded the concepts embodied by ICABS (Table 1 ).

2.6 Methods after 1980

The two burgeoning areas of research—behavioral economics and experiential theories—differed in their methodological approaches. The former relied on controlled randomized experiments with a focus on decision strategies and behavioral outcomes. For example, experiments tested the process by which consumers evaluate options using information display boards and “Mouselab” matrices of aspects and attributes (Payne et al. 1988 ). This school of thought also focused on behavioral dependent measures, such as choice (Huber et al. 1982 ; Simonson 1989 ; Iyengar and Lepper 2000 ).

The latter was influenced by post-positivistic philosophers of science—such as Thomas Kuhn, Paul Feyerabend, and Richard Rorty—and approaches expanded to include various qualitative techniques (interpretive, ethnographic, humanistic, and even introspective methods) not previously prominent in the field of consumer research. These included:

Interpretive approaches —such as those drawing on semiotics and hermeneutics—in an effort to gain a richer understanding of the symbolic meanings involved in consumption experiences;

Ethnographic approaches — borrowed from cultural anthropology—such as those illustrated by the influential Consumer Behavior Odyssey (Belk et al. 1989 ) and its discoveries about phenomena related to sacred aspects of consumption or the deep meanings of collections and other possessions;

Humanistic approaches —such as those borrowed from cultural studies or from literary criticism and more recently gathered together under the general heading of consumer culture theory ( CCT );

Introspective or autoethnographic approaches —such as those associated with a method called subjective personal introspection ( SPI ) that various consumer researchers like Sidney Levy and Steve Gould have pursued to gain insights based on their own private lives.

These qualitative approaches tended not to appear in the more traditional journals such as the Journal of Marketing , Journal of Marketing Research , or Marketing Science . However, newer journals such as Consumption, Markets, & Culture and Marketing Theory began to publish papers that drew on the various interpretive, ethnographic, humanistic, or introspective methods.

2.7 Aims after 1980

In 1974, consumer research finally got its own journal with the launch of the Journal of Consumer Research ( JCR ). The early editors of JCR —especially Bob Ferber, Hal Kassarjian, and Jim Bettman—held a rather divergent attitude about the importance or even the desirability of managerial relevance as a key goal of consumer studies. Under their influence, some researchers began to believe that consumer behavior is a phenomenon worthy of study in its own right—purely for the purpose of understanding it better. The journal incorporated articles from an array of methodologies: quantitative (both secondary data analysis and experimental techniques) and qualitative. The “right” balance between theoretical insight and substantive relevance—which are not in inherent conflict—is a matter of debate to this day and will likely continue to be debated well into the future.

2.8 Summary—the three I’s after 1980

In sum, beginning in the early-1980s, consumer research branched out. Much of the work in consumer studies remained within the earlier tradition of the three R’s—that is, rationality (an information-processing decision-oriented buyer), rigor (neo-positivistic experimental designs and quantitative techniques), and relevance (usefulness to marketing managers). Nonetheless, many studies embraced enlarged views of the three major aspects that might be called the three I’s —that is, irrationality (broadened perspectives that incorporate illogical, heuristic, experiential, or hedonic aspects of consumption), interpretation (various qualitative or “postmodern” approaches), and intrinsic motivation (the joy of pursuing a managerially irrelevant consumer study purely for the sake of satisfying one’s own curiosity, without concern for whether it does or does not help a marketing practitioner make a bigger profit).

3 The present—the consumer behavior field today

3.1 present concepts.

In recent years, technological changes have significantly influenced the nature of consumption as the customer journey has transitioned to include more interaction on digital platforms that complements interaction in physical stores. This shift poses a major conceptual challenge in understanding if and how these technological changes affect consumption. Does the medium through which consumption occurs fundamentally alter the psychological and social processes identified in earlier research? In addition, this shift allows us to collect more data at different stages of the customer journey, which further allows us to analyze behavior in ways that were not previously available.

Revisiting the ICABS framework, many of the previous concepts are still present, but we are now addressing them through a lens of technological change (Table 2 )

. In recent years, a number of concepts (e.g., identity, beliefs/lay theories, affect as information, self-control, time, psychological ownership, search for meaning and happiness, social belonging, creativity, and status) have emerged as integral factors that influence and are influenced by consumption. To better understand these concepts, a number of influential theories from social psychology have been adopted into consumer behavior research. Self-construal (Markus and Kitayama 1991 ), regulatory focus (Higgins 1998 ), construal level (Trope and Liberman 2010 ), and goal systems (Kruglanski et al. 2002 ) all provide social-cognition frameworks through which consumer behavior researchers study the psychological processes behind consumer behavior. This “adoption” of social psychological theories into consumer behavior is a symbiotic relationship that further enhances the theories. Tory Higgins happily stated that he learned more about his own theories from the work of marketing academics (he cited Angela Lee and Michel Pham) in further testing and extending them.

3.2 Present Methods

Not only have technological advancements changed the nature of consumption but they have also significantly influenced the methods used in consumer research by adding both new sources of data and improved analytical tools (Ding et al. 2020 ). Researchers continue to use traditional methods from psychology in empirical research (scale development, laboratory experiments, quantitative analyses, etc.) and interpretive approaches in qualitative research. Additionally, online experiments using participants from panels such as Amazon Mechanical Turk and Prolific have become commonplace in the last decade. While they raise concerns about the quality of the data and about the external validity of the results, these online experiments have greatly increased the speed and decreased the cost of collecting data, so researchers continue to use them, albeit with some caution. Reminiscent of the discussion in the 1970s and 1980s about the use of student subjects, the projectability of the online responses and of an increasingly conditioned “professional” group of online respondents (MTurkers) is a major concern.

Technology has also changed research methodology. Currently, there is a large increase in the use of secondary data thanks to the availability of Big Data about online and offline behavior. Methods in computer science have advanced our ability to analyze large corpuses of unstructured data (text, voice, visual images) in an efficient and rigorous way and, thus, to tap into a wealth of nuanced thoughts, feelings, and behaviors heretofore only accessible to qualitative researchers through laboriously conducted content analyses. There are also new neuro-marketing techniques like eye-tracking, fMRI’s, body arousal measures (e.g., heart rate, sweat), and emotion detectors that allow us to measure automatic responses. Lastly, there has been an increase in large-scale field experiments that can be run in online B2C marketplaces.

3.3 Present Aims

Along with a focus on real-world observations and data, there is a renewed emphasis on managerial relevance. Countless conference addresses and editorials in JCR , JCP , and other journals have emphasized the importance of making consumer research useful outside of academia—that is, to help companies, policy makers, and consumers. For instance, understanding how the “new” consumer interacts over time with other consumers and companies in the current marketplace is a key area for future research. As global and social concerns become more salient in all aspects of life, issues of long-term sustainability, social equality, and ethical business practices have also become more central research topics. Fortunately, despite this emphasis on relevance, theoretical contributions and novel ideas are still highly valued. An appropriate balance of theory and practice has become the holy grail of consumer research.

The effects of the current trends in real-world consumption will increase in magnitude with time as more consumers are digitally native. Therefore, a better understanding of current consumer behavior can give us insights and help predict how it will continue to evolve in the years to come.

4 The future—the consumer behavior field in 2040

The other papers use 2030 as a target year but we asked our survey respondents to make predictions for 2040 and thus we have a different future target year.

Niels Bohr once said, “Prediction is very difficult, especially if it’s about the future.” Indeed, it would be a fool’s errand for a single person to hazard a guess about the state of the consumer behavior field twenty years from now. Therefore, predictions from 34 active consumer researchers were collected to address this task. Here, we briefly summarize those predictions.

4.1 Future Concepts

While few respondents proffered guesses regarding specific concepts that would be of interest twenty years from now, many suggested broad topics and trends they expected to see in the field. Expectations for topics could largely be grouped into three main areas. Many suspected that we will be examining essentially the same core topics, perhaps at a finer-grained level, from different perspectives or in ways that we currently cannot utilize due to methodological limitations (more on methods below). A second contingent predicted that much research would center on the impending crises the world faces today, most mentioning environmental and social issues (the COVID-19 pandemic had not yet begun when these predictions were collected and, unsurprisingly, was not anticipated by any of our respondents). The last group, citing the widely expected profound impact of AI on consumers’ lives, argued that AI and other technology-related topics will be dominant subjects in consumer research circa 2040.

While the topic of technology is likely to be focal in the field, our current expectations for the impact of technology on consumers’ lives are narrower than it should be. Rather than merely offering innumerable conveniences and experiences, it seems likely that technology will begin to be integrated into consumers’ thoughts, identities, and personal relationships—probably sooner than we collectively expect. The integration of machines into humans’ bodies and lives will present the field with an expanding list of research questions that do not exist today. For example, how will the concepts of the self, identity, privacy, and goal pursuit change when web-connected technology seamlessly integrates with human consciousness and cognition? Major questions will also need to be answered regarding philosophy of mind, ethics, and social inequality. We suspect that the impact of technology on consumers and consumer research will be far broader than most consumer-behavior researchers anticipate.

As for broader trends within consumer research, there were two camps: (1) those who expect (or hope) that dominant theories (both current and yet to be developed) will become more integrated and comprehensive and (2) those who expect theoretical contributions to become smaller and smaller, to the point of becoming trivial. Both groups felt that current researchers are filling smaller cracks than before, but disagreed on how this would ultimately be resolved.

4.2 Future Methods

As was the case with concepts, respondents’ expectations regarding consumer-research methodologies in 2030 can also be divided into three broad baskets. Unsurprisingly, many indicated that we would be using many technologies not currently available or in wide use. Perhaps more surprising was that most cited the use of technology such as AI, machine-learning algorithms, and robots in designing—as opposed to executing or analyzing—experiments. (Some did point to the use of technologies such as virtual reality in the actual execution of experiments.) The second camp indicated that a focus on reliable and replicable results (discussed further below) will encourage a greater tendency for pre-registering studies, more use of “Big Data,” and a demand for more studies per paper (versus more papers per topic, which some believe is a more fruitful direction). Finally, the third lot indicated that “real data” would be in high demand, thereby necessitating the use of incentive-compatible, consequential dependent variables and a greater prevalence of field studies in consumer research.

As a result, young scholars would benefit from developing a “toolkit” of methodologies for collecting and analyzing the abundant new data of interest to the field. This includes (but is not limited to) a deep understanding of designing and implementing field studies (Gerber and Green 2012 ), data analysis software (R, Python, etc.), text mining and analysis (Humphreys and Wang 2018 ), and analytical tools for other unstructured forms of data such as image and sound. The replication crisis in experimental research means that future scholars will also need to take a more critical approach to validity (internal, external, construct), statistical power, and significance in their work.

4.3 Future Aims

While there was an air of existential concern about the future of the field, most agreed that the trend will be toward increasing the relevance and reliability of consumer research. Specifically, echoing calls from journals and thought leaders, the respondents felt that papers will need to offer more actionable implications for consumers, managers, or policy makers. However, few thought that this increased focus would come at the expense of theoretical insights, suggesting a more demanding overall standard for consumer research in 2040. Likewise, most felt that methodological transparency, open access to data and materials, and study pre-registration will become the norm as the field seeks to allay concerns about the reliability and meaningfulness of its research findings.

4.4 Summary - Future research questions and directions

Despite some well-justified pessimism, the future of consumer research is as bright as ever. As we revised this paper amidst the COVID-19 pandemic, it was clear that many aspects of marketplace behavior, consumption, and life in general will change as a result of this unprecedented global crisis. Given this, and the radical technological, social, and environmental changes that loom on the horizon, consumer researchers will have a treasure trove of topics to tackle in the next ten years, many of which will carry profound substantive importance. While research approaches will evolve, the core goals will remain consistent—namely, to generate theoretically insightful, empirically supported, and substantively impactful research (Table 3 ).

5 Conclusion

At any given moment in time, the focal concepts, methods, and aims of consumer-behavior scholarship reflect both the prior development of the field and trends in the larger scientific community. However, despite shifting trends, the core of the field has remained constant—namely, to understand the motivations, thought processes, and experiences of individuals as they consume goods, services, information, and other offerings, and to use these insights to develop interventions to improve both marketing strategy for firms and consumer welfare for individuals and groups. Amidst the excitement of new technologies, social trends, and consumption experiences, it is important to look back and remind ourselves of the insights the field has already generated. Effectively integrating these past findings with new observations and fresh research will help the field advance our understanding of consumer behavior.

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Malter, M.S., Holbrook, M.B., Kahn, B.E. et al. The past, present, and future of consumer research. Mark Lett 31 , 137–149 (2020). https://doi.org/10.1007/s11002-020-09526-8

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An introduction to customer analysis

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14 March 2023

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If you wanted to impress someone you liked, what would you do?

Most people would try to learn everything they could about their crush. They would find out their favorite hangout spot, best food, best movies, and whether they are night owls or morning people. Having this information makes it easier to impress the person.

The same applies to the relationship dynamic between companies and customers. For your business to win over your customers, you must have an in-depth understanding of their lives.

You need to understand their biggest pain points, goals, and what makes them tick. Accessing this information is possible through customer analysis.

Our guide explores what customer analysis is and how to use it to provide customers with better experiences.

What is customer analysis?

Customer analysis is the practice of collecting qualitative and quantitative customer data to better understand your consumers. This data helps your company arrive at meaningful conclusions that inform how to market and connect with customers.

Customer analysis reveals crucial data such as:

Your customers’ greatest needs

The most significant hurdles to fulfilling these needs

The marketing channels and strategies customers respond best to

Why customers buy or don't buy your products

Demographics and purchasing groups your customers belong to

Your ideal-customer profiles

With access to this data, companies can iterate their marketing efforts and align marketing strategies with customer needs.

Importance of customer analysis

Customer analysis is the foundation of great marketing. Marketing without customer analysis data is akin to starting a journey without a plan—it's bound to fail.

Here are some specific benefits of customer analysis.

Improving the customer experience

Customer analysis is a potent tool that uses key data to help you improve the customer experience. With concrete customer data, you can personalize all your marketing messages. The customer analysis data also helps you understand which messages work for which customers.

What’s more, customer analysis ensures you are marketing to the right target audience, minimizing risks and financial losses.

Increasing customer retention and reducing churn

Churn refers to the loss of customers, and it happens when your product fails to satisfy customer needs. A high churn rate can also happen when the experience customers have with your company doesn't align with their expectations.

However, you can reduce customer churn by conducting customer analysis. The data you collect can give you the insights you require to tailor experiences that align with customer needs. In turn, more customers will choose to stay.

Increasing revenue

Customer analysis can lead to better personalization, more relatable marketing, and ultimately an increased number of customers. In turn, your business will win over more customers, enjoy repeat business, and improve overall revenue.

Types of customer analysis

While there are myriad different forms of customer analysis, we will focus on two of the most useful:

Behavioral analysis

Demographic analysis

Let's look at what each type entails and how you can leverage them within your business.

Behavioral customer analysis

This type of analysis encompasses two elements of customer behavior:

Buying criteria

Purchasing patterns

In buying criteria, you try to understand the features and products your customers appreciate most. Analyzing the buying criteria of your target audience also reveals unmet needs and the price customers are willing to pay. This way, you can align your marketing to highlight these features.

Purchasing patterns, on the other hand, explore the following:

Frequency of purchases

The type of products customers buy

The sales channels customers use to buy products

The time between a customer’s initial interaction and their purchase

This data helps you market to customers in ways relatable to them, and via channels they frequent.

Customer demographic analysis

This analysis evaluates data such as gender, age, income, location, and education levels to determine the type of marketing that would resonate best with your target audience.

For instance, if you find out that most of your customers are aged 18–25, the best marketing channels may be platforms such as Instagram and TikTok. Your messaging would likely be more casual, relatable, and conversational, to align with expectations from this age group.

4 steps to running an effective customer analysis

There are several steps to embarking on customer analysis. Here are the four most important ones:

1. Structure your existing customer base

Your database of current customers can provide incredible insights when structured correctly.

For example, even if you offer a single product, your customers buy for different reasons. For instance, if you sell accounting software, you might segment your customers into:

Small businesses

Medium enterprises

Freelancers

Solopreneurs

Personal use customers

All these groups of customers have different traits, pain points, and goals.

Start with customer segmentation by categorizing customers into groups, according to:

Demographic: age range, gender, income

Geographic: location-specific

Psychographic: values, beliefs, personality, interest

Technographic: based on the device or channels customers prefer, e.g., mobile vs. desktop, email vs. social media

Behavioral: habits, frequent actions, usage, and purchase behavior

Employment status: applies to B2C customers

Industry: applies when your audience is B2B

Business size: also common for B2B customer segmentation

Needs: the type of need customers are looking to fill

Value to the company: based on the customer lifetime value (CLV), repeat purchase rate, customer loyalty index

Some of this analytics data will be accessible through platforms such as Google Analytics and engagement reports from social media and email.

Once you have a feel for the different segments within your customer base, it will be easier to understand the right marketing strategies, timing, and messaging.

2. Interact with your customers

Hard data is great, but your customer's voice is also a vital component of customer analysis. However you go about it, the goal is to hear the customer's perspective.

There are several customer analysis methods you can employ here. Examples include:

Social media customer surveys

Telephone interviews

Focus groups

One-on-one interviews

You can also find your customers’ voices through other means, such as:

Online reviews

Social media comments

Email marketing responses

Customer support interactions (chatbot and call center logs)

3. Create ideal customer profiles

Once you segment customers and run surveys to discover their voice, it's time to create your ideal customer profile (ICP). The ICP represents how your most valuable customer can be characterized. The ideal customer profile provides the demographic data, behavior traits, values, pain points, and goals of your ideal customer. You can have one or more ICPs, depending on the nature of your business.

Knowing your ICP makes it easy to create personalized experiences for your customers because you now know what they look like and expect.

4. Map the customer journey

When does a customer first interact with your business? How long after the initial interaction do they purchase from you? Which channels do they frequent before buying?

You need to ask all these questions to map the customer journey correctly.

Simply put, the customer journey map showcases all the interactions and touchpoints a customer has with your brand. The customer journey map tells a story of the hurdles, emotions, and processes a customer encounters before buying from you.

In most cases, the customer journey moves as follows:

Consideration → exploration → comparison → testing → negotiation

Consideration often happens after the initial interaction. At this stage, the customer decides to put you on their list of brands to check out. If your brand convinces them you’re worth a shot, they will become more invested and start exploring you at a retailer, on a website, or via an app.

From there, the customer moves to comparison, where they read consumer reports, evaluate reviews, and ask friends or colleagues what they think about your products. If the reviews and reports impress customers, they move to testing. This could be in the form of visiting your store to have a feel and sense of the product. It could also be signing up for a free trial of your product or requesting a demo.

The final stage is negotiation. Here, a customer settles on a product, but they conduct further research about the price before buying.

When the customer journey is clearly defined like this, it's easier to deploy the right messaging at every journey step. In turn, customers experience tailored resources that help them decide and settle on a product with more certainty.

Customer analysis is not a set-and-forget strategy

The first customer analytics study you perform should not be your last. For best returns, you must keep updating your customer analysis insights and iterating your ICP as consumer behavior changes.

Updating your customer analysis insights also helps you capture emerging target groups and marketing trends as they crop up.

Now that you have all the critical customer insights, it's time to ensure all the relevant people have access. You can achieve this through a simple Google Drive folder, but this can quickly become messy, and vital insights can slip through the cracks.

The best way to get the most out of your insights is to use a customer insights platform. Such a platform ensures all relevant stakeholders have access by centralizing all your insights into a single platform .

Learn more about customer analysis software

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Consumer Analysis - Meaning, Importance, Steps & Example

What is consumer analysis.

Consumer analysis is the process where information about the consumer is found out from market research like the needs of the consumer, the target market and the relevant demographics so that this information can be used in market segmentation for further steps of market research. It is very useful in predicting consumer behavior.

Importance of Consumer Analysis

Consumer is the most important entity in the entire selling and marketing process and analyzing consumer is a very important aspect of market research.

Objectives of consumer analysis are to find out information about:

Profile of the consumers

This includes demographic, economic, social, geographical characteristics of the consumer and any other special interests of the consumer that are relevant. It also includes the buying process of the consumer i.e. factors like the decision making unit, time and frequency of purchase, how the consumer makes the purchase and the method of payment. The former is called demographic analysis and the latter is called behavioral analysis.

Benefit gained by the consumers

These include functional benefits, psychological benefits, high and low involvement benefits depending on the products, and user & purchaser benefit depending on whether it is a B2B or B2C customer.

A market is the group of customers who gain the same benefit from a product. Market can be undifferentiated or differentiated. In case of differentiated markets, market segmentation can be based on geographic, demographic or psychological segmentation. Whichever the market is, it has to be homogeneous, consistent, executable and profitable.

Consumer Market
Consumer Buying Behaviour
Consumer Oriented Marketing
Consumer Behaviour
Consumer Relations

Steps in consumer analysis

Step1: Overview of the industry

Step2: Identifying and describing demographics of the customers

Step3: Project future changes

Step4: Determine and describe consumer buying behavior

Step5: Competitive analysis

Step6: Use information about industry, customer and competitors determined above to identify gaps in the market

Wheel of consumer analysis: It is a model describing the key factors in understanding consumer behavior and hence developing a marketing strategy.

Example of Consumer Analysis

Nike shoes has a wide range of products designed for different segments of its consumers like shoes for sports persons, basic sports shoes for gym, walking or running, tougher shoes for football players, etc.

Hence, this concludes the definition of Consumer Analysis along with its overview.

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Customer Research 101: Definition, Types, and Methods

12 February 2024

Table Of Contents

What is Customer Research?

Why is customer research important, types of customer research.

6 Customer Research Methods
How SurveySparrow Can Help

Do you want to improve your marketing or product? Then, customer research can help.

Your customer is at the heart of all your business decisions. In fact, everything revolves around a customer. A business is about having a paying customer, and it wouldn’t exist without one.

The effectiveness of your product or marketing depends on how well you know your customers. When you know your customers better, you can make better product or marketing decisions.

In this article, we break down:

What customer research is
Why it’s valuable for your business
Different types of customer research
Six customer research methods you can use to refine and grow your business

Customer research (or consumer research ) is a set of techniques used to identify the needs, preferences, behaviors, and motivations of your current or potential customers.

Simply put, the consumer research process is a way for businesses to collect information and learn from their customers so they can serve them better.

Businesses typically conduct customer research to uncover new insights on their customers. They then use these newly uncovered insights to improve their product, craft an effective marketing strategy, and more.

Here are 2 key questions customer research helps you answer:

Who are my ideal customers? Who is the best fit (or worst fit) for our product?
What channels can I use to find and communicate with my ideal customers?

Online survey tools like SurveySparrow can help you answer these questions. With omnichannel survey distribution, snazzy data visualization, and 1,500+ integrations with your favorite tools, SurveySparrow simplifies customer research for your GTM and product teams.

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A. How well do you know your customers? Not knowing enough about your customers can cost you time and money.

For example, a recent survey revealed that 46% of customers broke up with a brand because they received irrelevant content pushes.

Successful marketers realize that research is necessary to understand and cater to the ever-changing needs of today’s customers. According to a study by Coschedule:

Successful marketers are 242% more likely to conduct audience research at least once every quarter.
56% of the study’s most elite marketers research at least once a month.

B. You shouldn’t make assumptions about your customers’ preferences or needs. You have to go out there and get opinions from real customers.

C. You need to go beyond your general idea about your customers. The more you understand your customers, the better you’ll be able to serve them with your product or service.

D. If you want to make your product the best in the market, you need to identify any unmet needs and learn how well your product serves the needs of your current customers.

E. Customer research helps you learn more about your customers, both the potential and existing ones. Serving your customers better than the alternatives starts with understanding them better and more deeply.

F. Here are other key reasons why you should research customers:

Know the Why : Your analytics dashboard merely tells you what your customers do. Only research can help you understand why they do that.
Validate Assumptions and Best Practices : In most cases, guesswork leads to terrible decisions. Your customers might not need what you think they need. And what works for most businesses might not work for you. The only real way to know is to talk to your customers.

Customer research can be done in two distinct ways: primary and secondary.

Primary research

Primary research is research you conduct yourself. In other words, in primary research, you collect the data yourself. Some examples of primary research are face-to-face interviews, surveys, and social media interactions.

Secondary research

Secondary research (or desk research ) is done by someone else. In secondary research, you make use of data that’s been collected by other people. A few examples of secondary research are forums or communities, industry reports, and online databases.

Primary and secondary research can be further broken down into two kinds of data: qualitative and quantitative.

Qualitative data

Qualitative data is descriptive and conceptual. And the nature of the data makes it subjective and interpretive. Examples of qualitative data include descriptions of certain attributes, such as blue eyes or chocolate-flavored ice cream .

Quantitative data

Quantitative data can be expressed using numbers, which means it can be counted or measured. As opposed to qualitative data, it’s objective and conclusive. Examples of quantitative data include numerical values such as measurements , length , cost , or weight .

Customer Research Methods that Work in 2024 (and Beyond)

Now that you know what customer research is and why it’s important, read on to learn the different consumer research methods you can use to make the most of it.

In a survey, you ask a series of questions to your customers regarding a subject or concept.

You can conduct a survey in person, over the phone, through emails, or online forms.

Here are some advantages of conducting customer research through surveys:

Quickly collect a ton of insightful data without the high costs.
The data you collect using surveys is simple to analyze.
You can ask various questions since you get a wide range of question formats.

When it comes to surveys, it’s all about how you ask. Clear and concise questions can help you get reliable information.

An online survey tool is your best bet for quickly gathering customer information. All you need to do is create a survey with a ready-to-use template and send your customers a link to take it.

If you’re in need of a cost-free and easy-to-use solution for conducting customer research surveys and beyond, consider exploring SurveySparrow . This tool aids in gathering essential data by enabling you to conduct thorough data analysis via its user-friendly and conversational survey format.

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In an interview, you speak directly to your customers and ask them open-ended questions.

Interviews allow you to have deep, one-on-one conversations with your customers and explore a topic in-depth.
You can go into the details, obtain data beyond surface-level information, and gather deeper insights.

While interviews allow you to probe deeper into a subject, success depends on the expertise and skills of the researcher (or interviewer) conducting the interviews.

Conducting interviews isn’t easy. It’s time-consuming and costly. However, the information you collect can be invaluable for your company’s growth.

You can meet your customers in person to conduct your interviews. Or you can use video conferencing tools such as Google Meet or Zoom to converse with your customers online.

Your analytics dashboard lets you in on your customers’ actions within your product.

Just a glance at it and you’ll know what your customers do and how they engage with your product.

The irony is that customers don’t know what they want or why. They might think they need something but that might not be the case.

What they say they need doesn’t equate to what they do.

The point is that customer-reported behavior is different from actual behavior. That’s why it pays to track and observe your customers’ behavior.

You can use heatmaps, click tracking, scroll mapping, and user-recorded sessions to gain insights into your users’ actions and behavior.

Focus Groups

In this method, you combine a small group based on certain criteria such as demographic, firmographic, or behavioral attributes.

And you ask this group about whatever topic or concept. It could be about your product, marketing message, or something else that’s related to your customers or business.

The idea is to get them to talk to each other and have meaningful conversations.

A moderator helps facilitate the conversations between the individuals in this group. The moderator will try to draw meaningful insights from these conversations and discussions.

You mainly use this technique to understand a certain topic or subject better.

Competitive Analysis

Studying your competitors’ strategies and tactics is a great way to learn more about the target market and the existing solutions.

You can analyze both your direct and indirect competitors depending on the needs you address and the customers you cater to.

You can conduct a competitive analysis from a marketing or product perspective.

If you conduct your analysis from a marketing perspective, you study your competition’s SEO strategy , landing page copy, blog content, PR coverage, social media presence, etc.

You can also conduct your competitive analysis from a product perspective and analyze your competitors’ user experience, features, pricing structure, etc.

Review Mining

The reviews of you and your competitors are another great way to get inside your customer’s head. This method can be especially valuable if you are a SAAS company.

It helps you better understand your competitor’s strengths and weaknesses as well as your own. This understanding helps you improve your own products and better address the needs of your ideal customers.

This kind of data is easy to acquire as it’s publicly available, and you can get them on:

Review sites such as G2Crowd and Capterra.
Forums and niche communities such as ProductHunt, Reddit, Quora, etc.

Why SurveySparrow is the Best Customer Research Tool

SurveySparrow facilitates comprehensive customer research by enabling businesses to efficiently collect, analyze, and act on customer feedback, leading to better informed and customer-centric decisions.

Collect Feedback Easily : Create simple surveys to find out what customers think about your products or services.
Understand Satisfaction : Use surveys to figure out how happy customers are with what you offer.
Learn Buying Habits : Find out why customers buy certain products, which helps in planning what to sell.
Get Product Opinions : Ask customers what they like or don’t like about your products to make improvements.
See How People View Your Brand : Understand how customers see your brand, which is important for your marketing.
Keep Up with Trends : Regular surveys help you stay updated on what your customers want or need.
Group Customers : Identify different types of customers to target them more effectively with your marketing.
Improve Customer Experience : Learn where you can make the buying process better for your customers.
Test New Ideas : Before launching new products, check if your customers would be interested.
Check Customer Loyalty : Find out if customers would keep using your products or recommend them to others.

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Businesses that deeply understand their customers have a huge advantage over the ones that don’t. Period.

Whatever you’re looking to learn or achieve, it becomes a lot clearer with a little research.

When done right, customer research can be your competitive advantage.

Be sure to pick a method that’s right for your situation. What are you looking to learn and achieve? Think through each research method carefully and pick the one that works best for you.

Have you conducted customer research? What did you learn? And how did it go? Tell us about that in the comment section below.

And if you’re looking to conduct customer research through surveys, feel free to check out SurveySparrow .

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Customer analysis: Definition, benefits & how to perform it the right way

Learn what customer analysis is, what the benefits are to investing in it, and how to perform it the right way.

What is customer analysis?

Types of customer profiles
Benefits of customer analysis
How to do customer analysis

Customer analysis FAQs

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Understanding your customers and potential customers is a key aspect of being able to effectively market to them and build relationships with them. Careful customer analysis will provide you with the tools to convert more customers and keep them from churning for longer periods of time. In this post, we'll take a look at what customer analysis is, its benefits, and how to get started with it.

Customer analysis is a combination of qualitative and quantitative research collected on your customers with the purpose of better understanding them in order to draw meaningful conclusions that will aid you in your marketing and outreach efforts. It allows you to determine the needs of your customers, the types of messaging they respond well to, and why they are or aren't purchasing your product. Armed with this information, you can make the changes necessary to increase growth.

Two types of customer profiles you need to create

There are two different ways of looking at customers. Each of these will provide crucial insights into how to best target your messaging and guide future product decisions.

Customer behavioral profile

Creating a customer behavioral profile consists of two parts. The first part is understanding their buying criteria. Using market research and analytics, you can determine which features are most appreciated by customers, which needs are being underserved, and what price points they're willing to pay. Once you understand your customers' needs and willingness to pay , you can better tailor your product around those needs and price points. If you already have the features they value most, you can put additional effort into highlighting them in your marketing materials.

The second part of the behavioral profile is the purchasing patterns of your customers. What are they buying, and how frequently are they buying it? Which sales channels are they using to make a purchase, and where did they arrive from? What is the average time between first visit and first purchase? How long do they stay around before churning? All of these questions can inform your marketing decisions and allow for fine-grained tuning of your messaging and sales strategy.

Customer demographic profile

Demographic information such as age, location, income and education levels, gender, and more can give you a clearer picture of the type of messaging that will most resonate with customers and the marketing channels that can best reach them. The best way to determine which demographics to target for future marketing efforts is by looking at your existing customers. Building a marketing strategy around the types of people who are already purchasing is a great way to maximize the ROI of your marketing budget.

5 key benefits of performing customer analysis for any business

We've already touched lightly on some of the reasons that you should be doing customer analysis. Now let's take a closer look at some of the key benefits to show you just how important customer analysis can be to the sustained growth of your business.

1. Reduced churn & increased customer retention

One of the biggest reasons customers churn is because the product isn't fulfilling their needs. Customer analysis allows you to better understand what those needs are and tailor your product, your training materials, and your messaging to better address those needs before the customer churns.

2. Smarter product improvements

Knowing customer needs is a good way to decide what new features and improvements you should make to your product . By examining customer behavior to see which features are used and which are not, you'll have a better idea of what category of features customers find most useful, and which areas may need some improvement to increase usage.

3. Personalized and targeted marketing strategy

The most successful marketing departments create buyer personas for their customers. These are fictional characters that represent the various segments of customers that are most likely to purchase your product. The personas give you a more accurate target when determining what the tone of your messaging should be. You can also use analytics to target, in specific ways, customers who exhibit a certain behavior. This two-pronged personalization strategy results in a much more efficient marketing process.

4. Increased sales and revenue

When you're using buyer personas to communicate more effectively to potential customers, and using the other customer analysis you've performed, to more accurately address their pain points in both your messaging and your product development, you'll end up converting a higher number of potential customers into paying customers for increased revenue .

5. Lower CAC

Increased revenue alone isn't always a good thing. If you end up spending more to get that revenue, you're moving downward in profitability. Customer analysis allows you to make every aspect of the customer journey more efficient, meaning you'll be able to close more sales and keep customers around longer without spending more on marketing or other customer acquisition strategies .

How to do customer analysis in 8 steps

If your customer analysis is going to be effective, then it needs to be thorough. It's important that you gather the proper information and then apply it in the most meaningful way. The process can be outlined in eight broad steps:

1. Analyze your current customers

If you have a good analytics system in place, then you've already have a lot of data on how your customers behave. While market research looking outside of your customer base can help, looking at the people who have already purchased accomplishes the dual purpose of giving you specific access to how your product is used and providing you with information on the exact type of people likely to purchase from you.

2. Perform customer profitability analysis to identify the most valuable customers

Your entire customer base can give you plenty of good insights about which features are popular and similar generic metrics. But in order to know which types of customers to reach out to and which improvements are going to make the biggest impact on churn reduction, it pays to look at the type of people who have spent the most and/or stayed with you the longest. Keeping those customers happy and bringing in more like them will give you the most growth.

3. Perform customer needs analysis to discover the main purchase drivers

People make purchases based on needs. When you understand what your customers (and people similar to them) need from a product, you'll also understand what drives them to make a purchase. This data will play a big role in shaping the future development of your product and help you stay a step ahead of the competition.

4. Perform customer segmentation analysis to create customer segments

Customers can be segmented in a variety of ways. You can divide them by common demographic traits, common profitability metrics, common shopping or app-usage behaviors, and more. The data itself and customer segmentation tools will help guide you by grouping your customers into logical segmentation buckets. The data will help you determine your most profitable customers for the step above, but also show you which are in danger of churning, so you can take steps to avoid it.

5. Use customer data to create buyer personas

Armed with the customer segmentation data, the next step is to get to work crafting a fictional version of the major segments. These buyer personas will serve as the fictional embodiment of your customers, so the marketing, sales, and onboarding teams can communicate with them in a way they'll be most responsive to.

6. Acquire customer feedback

Analytics are a big driver of how you understand your customers, but they alone can't tell you everything. The best way to know what customers think is still the old-fashioned way of asking them. Getting routine customer feedback will keep you stay up-to-date on how customers feel about your product versus an ever-changing technological and competitive landscape.

7. Draw a customer journey map

Drawing a map of your current customer journey and comparing it with the feedback they've given and data you collected can help you identify points in the journey that are not currently being adequately addressed.

The technological landscape is constantly changing. What was state-of-the-art and adored by customers one day can be old news the next. It's important to keep that in mind and ensure that customer analysis is an ongoing effort on your part, and not something you do once and forget about.

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What should a customer analysis include?

When conducting a customer analysis, you should gather data about how customers are interacting with your product, what their pain points and needs are, what demographic and purchasing groups they belong to, and feedback directly from them about their feelings on your product.

How does customer data analysis help in the decision-making process?

Customer data analysis helps you to better understand what your customer's needs are and what features they interact with the most, to help guide you make accurate decisions for future product development. It also paints an accurate picture of who your customer is, allowing you to make more-informed decisions regarding ad-targeting and the tone of your ad copy and website text.

What are the types of customer analysis?

The two major types of customer analysis are behavioral analysis and demographic analysis. Behavioral analysis can be further divided into two subgroups: buying criteria and purchasing patterns.

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Customer needs analysis: definition & research methods.

10 min read Customer needs analysis is the process of identifying a customer’s requirements for a product or service. It’s used in all kinds of product and brand management contexts, including concept development, product development, value analysis, and more.

The goal of a customer needs analysis survey is to understand the customers’ needs and their position in the overall market.

What do we mean by customer needs?

Customer needs are the attributes of a product, brand or service that motivates someone to buy. The term covers basic must-haves, such as good-enough quality and affordable price , and also extends to more abstract and complex purchase drivers such as an aspirational brand image or a sense of alignment between a customer’s personal opinions and a brand’s ethics .

Customer needs vary a lot – between individual customers across your target audience , and from product to product and brand to brand. To identify customer needs effectively, you need an ongoing program of analysis that captures and analyzes customer feedback . Surveys can be an important part of that process.

Because customer needs can be complex and deep-seated, you may need to go beyond what customers explicitly tell you in order to uncover the full picture. That’s where customer needs analysis methods come in.

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How does understanding customer needs help?

A good understanding of customer needs helps your business in a few ways.

Firstly, it helps with product development and product packaging decisions. If you know your customers want a range of color and size options in a given product, you can make sure you provide them. If they want a range of colors and sizes but it matters more to them to get your product at the right price, then you know how to prioritize your resources to balance those needs correctly. You can also use customer needs assessments around existing products and services to enhance and develop your product offering in the future.

Secondly, it helps you to market the products you already have in the most effective way possible. You can make sure that your marketing messages reflect a customer’s desires and objectives and highlight the features and benefits that matter the most. For example, if you’re selling outdoor gear, as well as mentioning that it’s durable and waterproof, you could highlight the fact that your sustainable manufacturing methods result in a zero-carbon outcome for every garment. Thanks to your customer needs analysis, you’ll know if that’s something your nature-loving customers really value.

Types of customer needs

Here are just a few examples of customer needs that your analysis might turn up.

Price The item is affordable and appropriately priced for the quality
Convenience Saves time and effort
Image and status (as in an item of clothing or technology) Looks good, impresses others, makes the customer feel good about themselves
Durability and lifespan Built to last, dependable, and won’t break
Packaging type Resealable, refillable, recyclable, or all of the above
Support and aftercare Customer knows they can get questions answered and problems solved
Effectiveness Gets the job done
Formulation Free from unwanted ingredients or materials, containing desirable elements (for example gluten-free, or containing active friendly bacteria)

A means-end approach to customer needs analysis

Customer needs analysis is a means-end approach, meaning that customers make purchase decisions based on product features that get them to a value-based goal or state. For example, one consumer might buy a watch because he likes to be timely, and another might buy it because it looks cool. They’re both buying the same feature (time-tracking), but using it for different means (timeliness vs. status).

This principle is the basis of a powerful research technique which has been used to place U.S. presidents into office, successfully re-image industries, achieve competitive advantage over the competition through target advertising messages, and design innovative and successful new products.

Means-end analysis identifies linkages between three areas of product and customer interaction.

Product features and attributes
Benefits (real and perceived) a customer gains from the use of the product
The unique values or traits of a customer that enable them to experience the product benefits, such as a person’s functional, physical, financial, social, and psychological characteristics.

With the right tools, it’s possible to quantify all these elements with respect to a specific product and audience. A Qualtrics study for the development of a new bank credit card found that nine attributes were critical to consumers considering a new card: no annual fee, status, low-interest rate, added value features, acceptance, credit limit, ability to carry a balance, location of the sponsoring bank, and availability.

These attributes were found to be linked to 12 benefits (consequences) that were perceived as part of card usage: not feeling cheated, independence, convenience, dependability, and saving money.

Brand attitudes – and how to discover them

Brand attitude tells us what consumers think of a brand or product and if it solves a particular need. When developing customer analysis surveys, it’s important to determine the consumer’s brand attitude. Here are a few of the elements a good customer needs analysis survey should cover:

Top-of-mind imaging

Positive and negative associations for the brand or product category are elicited, along with reasons why the characteristic is viewed that way. Top-of-mind studies are used to uncover the attributes and consequences that distinguish the characteristic.

Brand category analysis

Identifies similar and dissimilar brand groupings within a product category and the reasons for this perceived similarity or dissimilarity. The primary reasons, most important attributes, and most representative brands are identified, and attributes and consequences are laddered.

Contextual environment scan

The usage context for a brand or product is critical in marketing. Physical occasions (place, time, people), or need state occasions (relaxing, rejuvenating, building relationships, feeling powerful, reducing stress, and getting organized) may exist. A brand or product is associated with a usage context that is critical in effective positioning and advertising.

Preference-usage/similarity-dissimilarity analysis

Comparing brands based on personal preference or usage is a common distinguishing point for brands. Groupings by similarity and dissimilarity also provide a direct method of distinguishing between brands. Success critical attributes and consequences are identified that lead to higher market performance.

Purchase and consumption timing

Issues are often related to product or brand choice and usage. For example, a respondent might be asked to identify products used for relief of a stuffy nose across several stages like onset, full-blown, and on-the-mend, or daytime and nighttime. Brand preference is identified for each time-related stage.

Usage trends

Past and expected future usage of a brand is instrumental in identifying attributes and consequences that lead to different usage patterns. For example, respondents may be asked, “Will this brand be used more often, less often, or about the same as you have used it in the past?” Then, reasons for increased, decreased, or unchanged usage are determined. The follow-up analysis of reasons for trends produces a vivid insight into market drivers and potential areas of market growth.

Product or brand substitution analysis

Product and brand substitution methods elicit the degree of similarity of perceived attributes and consequences associated with usage. When questions are asked about the degree of substitutability, attributes and consequences are discovered that inhibit or promote substitution (attributes or consequences that need to be added or removed for substitution or trial to occur). For an unfamiliar brand, the respondent first can sample or be given a description of the brand, followed by a question like, “How likely would you be to substitute (name of the new brand) for your current brand for this occasion—why is that?”

Alternative usage occasions

Alternative uses are presented to the respondent to determine if and why the brand is present or absent from the choice set. Questions might be phrased to ask, “Why would you consider using Brand A for this occasion?”, or “What is keeping you from using Brand A for this occasion now?” Both positive reasons why a brand fits a new occasion and negative reasons why it does not fit can be elicited. Alternative usage occasion analysis identifies market segments and details how to approach them.

How to better meet your customers’ needs

Customer needs assessment needn’t be a one-time event or even a per-product one. You can help make sure you’re continually meeting customer needs by maintaining an overall high standard of knowledge about how your customers think and feel. This will pay dividends not only in designing and marketing your products more effectively, but also in making customers feel known, understood, and valued when they interact with you.

Becoming more customer-centric is a choice that more and more businesses are making, focusing less on operational data and more on experience-based insights that reflect how customers think and feel about the experiences you provide .

With the Qualtrics experience management platform , you can build surveys and dive deep into what matters most to your customers and your business.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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Consumer Insights & Analytics

All insights.

Consumer Decision Making Process: a detailed analysis

The consumer decision making process is complex and involves all the stages from problem recognition to post purchase activities. It has been noted that “the childhood and the human’s development has a crucial impact on personal decision making process” (Sokolowski, 2011, p.1) and the framework of consumer decision making process is found to be addressed by the majority of authors who have addressed the topic of consumer behaviour .

All the consumers have their own needs in their daily lives and these needs make them make different decisions. These decisions can be complex depending on the consumer’s opinion about a particular product, evaluating and comparing, selecting and purchasing among the different types of product. Therefore, understanding and realizing the core issue of the process of consumer decision making and utilize the theories in practice is becoming a common view point by many companies and people.

There is a common consensus among many researchers and academics that consumer purchasing theory involves a number of different stages. Depending on the different factors and findings, numerous researchers and academics developed their own theories and models over the past years. However, according to Tyagi and Kumar (2004), although these theories vary slightly from each other, they all lead to almost the same theory about the consumer purchasing theory which states that it involves the stages of search and purchase of product or service and the process of evaluation the product or service in the post-purchase product.

Five Stage Model initially proposed by Cox et al. (1983) is considered to be one of the most common models of consumer decision making process and it involves five various stages. These stages are: recognition of need or problem, information search, comparing the alternatives, purchase and post-purchase evaluation. This simple model clearly illustrates and explains how the consumers make a purchasing decision.

Furthermore, Blackwell et al (2006) highlight the argument why this model is more precise and clear compared to the other similar models is that because this model’s core focus is on motivational factors which helps the user to understand the reasons behind the purchasing decision easier.

1. Problem/Need Recognition in Consumer Decision Making Process

Recognition of need or a problem is the first stage of the model. Arnould et al. (2002) specify need as the difference between an actual state and the desired state. According to Agwaral (2006) a need may be recognised due to internal or external stimuli. Hunger, thirst or other basic human needs can be specified as internal stimuli, whereas external stimuli may be caused by various formats of advertisement.

According to Bruner (1993) recognition of a problem arises in the situation where an individual realizes the difference between the actual state of affairs and desired state of affairs. Neal and Quester (2006) further state that the recognition of a problem or need depend on different situations and circumstances such as personal or professional and this recognition results in creation of a purchasing idea. For instance, consumer may recognize the need to buy a laptop when there is need to carry it use it in different places which is convenient compared to a desktop computer.

Solomon et al (2006) classifies the human needs into two different categories depending on their nature. The following categories are mentioned: psychological and functional or physical needs. The authors state that the psychological needs are the outcome of emotional feeling of consumers whereas functional or physical needs are usually the results of necessity.

According to Tyagi (2004) need recognition at various levels often occurs during the process of encountering with the product at various circumstances. In other words, Tyagi (2004) convincingly argues that an individual might not be aware of the need for a specific product until he or she encounters with the product as a result of engaging in ‘window-shopping’, media advertisements, or in a range of other circumstances.

The human need has no limit therefore; the problem recognition is a repetitive in nature. According to Maslow theory, human being is always dissatisfied, when an individual’s one need is satisfied another one will come out and this trend continues repetitively.

2. Information Search in Consumer Decision Making Process

The next stage of the model is information search. Once the need is recognized, the consumer is likely to search more product-related information before directly making a purchase decision. However, different individuals are involved in search process differently depending on their knowledge about the product, their previous experience or purchases or on some external information such as feedback from others.

Majumdar (2010) divides sources of information into four categories: personal, commercial, public and experiential sources. Members of family, friends, colleagues and others can be specified as personal sources of information. The level of influence of personal source of information is greater compared to other sources.

Commercial sources of information refer to marketing communication messages in various formats. Consumers are usually subjected to commercial sources of information via media advertisement, direct marketing, viral marketing, commercial events etc. Public sources of information refer to mass media in print, television, radio and digital formats. According to Batra and Kazmi (2008), consumer rating groups represent can be specified as another important public source. Experiential sources of information related to products and services relate to the possibilities of examining and using products and services for a specific duration of time.

Search of information process itself can be divided into two parts as stated by Oliver (2011): the internal search and external search. In internal search, the consumers compare the alternatives from their own experiences and memories depending on their own past experiences and knowledge. For example, searching for fast food can be an example for internal search because customers often use their knowledge and tastes to choose the right product they need rather than asking someone for an advice. On the other hand, external search ends to be for bigger purchases such as home appliances or gadgets. For instance, consumers who wish to buy new furniture or a mobile phone tend to ask friends’ opinion and advices or search in the magazines and media before making a purchasing decision.

Winer (2009) argues that with the enhancing role of internet in professional and personal lives of people, increasing numbers of individuals are turning to various resources in internet when searching for information about product categories or specific brands. The author specifically highlights the role of online user reviews and forums in terms of their significant impact upon information search stage of consumer decision making process among internet users.

Colleagues, peers, friends and family members are highlighted as another important source of information by Kahle and Close (2006). Moreover, according to Kahle and Close (2006) the nature of influence of peers, friends and family members upon information search and consumer decision making process in general depends on a range of factors such as the nature of relationships, the level of personal influence, the extent of ‘opinion leadership’ associated with specific individuals etc.

3. Evaluation of Alternatives in Consumer Decision Making Process

After gathering enough information at the first stage the consumer gets into comparing and evaluating that information in order to make the right choice. In this stage the consumer analyzes all the information obtained through the search and considers various alternative products and services compares them according to the needs and wants.

Evaluation of alternatives is usually conducted with the application of a set of criteria depending on consumer value preferences. Specifically, consumer value preferences might be oriented towards price, quality or additional features and capabilities of products and services (Blythe, 1997). Neal and Quester (2007) discuss this issue with a greater level of clarity by specifying quality, price and features as product attributes specifies the degree of importance of each attribute as the most important factor impacting the outcome of evaluation of alternatives.

Furthermore, according to Ha et al (2010), the process of evaluation of alternatives can sometimes be difficult, time consuming and full of pressure for a consumer. This is because it is quite hard to find an ideal product or service that satisfies the needs of the customer as there are numerous factors that hinder the consumer purchasing decision making process. For instance, when it comes to online hotel reservation or furniture purchasing evaluation process, it can be quite complex. Several factors and aspects need to be considered before making a purchasing decision. Factors such as age, culture, taste and budget have all impact on the evaluation process by the consumer. For example, when purchasing a furniture, the young people consider the factors such as convenience and price where as the old people are likely to consider the quality and design.

Moreover, celebrity endorsement is seen as another factor with great potential impact on evaluation of alternatives stages of consumer decision making process. Cant et al. (2010) explain the effectiveness of celebrity endorsements with perceived greatness people associate with their idols and the willingness and desire to become like their idols.

4. Purchase Decision in Consumer Decision Making Process

Once the information search and evaluation process is over, the consumer makes the purchasing decision and this stage is considered to be the most important stage throughout the whole process. In this stage, the consumer makes decision to make a final purchase as he or she has already reviewed all the alternatives and came to a final decision point.

Importantly, purchase decision may result from evaluation of alternatives or such a decision might be made due to a set of situational factors such as effective point of sales marketing technique, and other aspects of environment in the point of sales. Evans et al. (2009) draw attention to impact of other people in the purchase decision. Specifically, according to Evans et al. (2009) the outcome of evaluation of alternatives may change even in last minutes before the purchase due to the impact of attitude of other people or a set of other factors.

Purchased further can be classified into three different types: planned purchase, partially purchase and impulse purchase (Kacen, 2002). Kacen’s view is further supported by Hoyer and Macinnis (2008) stating that there are a number of factors that can affect the purchasing process. For example, the desired product may not be available at the stock. In this case the purchase process is delayed and consumer may consider buying the product through online stores rather than visiting traditional physical stores.

According to Wiedmann et al. (2007) department store sales assistants play in integral role in terms of impacting consumer purchase decision in a positive way from a business point of view. At the same time Wiedmann et al. (2007) warn that this impact must not be done in a pushy manner, in which case it can prove to be counter-productive.

5. Post-Purchase Evaluation in Consumer Decision Making Process

The final stage in the consumer decision making process is post-purchase evaluation stage. Many companies tend to ignore this stage as this takes place after the transaction has been done. However, this stage can be the most important one as it directly affects the future decision making processes by the consumer for the same product. Therefore this stage reflects the consumer’s experience of purchasing a product or service. This view is further supported by Ofir (2005) mentioning that the consumer decision making process is a repetitive action and a good experience is vital in reducing the uncertainty when the decision to purchase the same product or service is considered the ext time.

According to Webb (2009), product’s perceived performance in customers’ viewpoint can result in customer satisfaction and dissatisfaction, with direct and immense implications on the level of customer loyalty. The opinions of peers, friends and family regarding the purchases made is specified as one of the most important factors affecting the outcome of post-purchase evaluation by Perrey and Spillecke (2011). This point is further expanded by Trehan and Trehan (2011), according to whom peer opinions regarding product evaluations tend to impact customer level of satisfaction regardless of their level of objectivity.

Brink and Berndt (2009) also highlights the importance of the post-purchase evaluation stage. According to the authors, the consumer may either get satisfaction or dissatisfaction depending on the evaluation of the purchase and comparison of their own expectations. The outcome forms the experience of the customer and it this experience is believed to have a direct impact on the next decision of the consumer to purchase the same product from the same seller.

Simply, if the consumer is satisfies with the purchase it is likely that the purchase may be repeated while if they have a negative experience from the purchase it is unlikely that the consumer may make the decision to buy the same product from the same seller or even may not buy the product at all.

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Sokolowski, O. (2011) “Influences and Attitudes within Consumer Behaviour Process” GRIN Verlag

Trehan, M. & Trehan, R. (2011) “Advertising and Sales Management” FK Publications

Tyagi, C. and Kumar, A. (2004) “Consumer Behaviour”, Atlantic Publishers, US

Wiedmann, K., Hennigs, N. and Siebels, A. (2007) “Measuring Luxury consumer perception: A cross-culture framework”, Academy of Marketing Science review , 2007(7)

Resource Library

Introduction to customer analysis.

A customer analysis (or customer profile) is a critical section of a company’s business plan or marketing plan. It identifies target customers, ascertains the needs of these customers, and then specifies how the product satisfies these needs.

Customer analysis can be broken down into a behavioral profile (why your product matches a customer’s lifestyle) and a demographic profile (describing a customer’s demographic attributes).

A customer profile is a simple tool that can help business better understand current and potential customers, so they can increase sales and grow their business. Customer profiles are a collection of information about customers that help determine why people buy or don’t buy a product. Customer profiles can also help develop targeted marketing plans and help ensure that products meet the needs of their intended audience.

Behavioral Analysis (Customer Buying Criteria)

A behavioral analysis of customers (or psychographic profile) seeks to identify and weigh the relative importance of factors consumers use to choose one product over another. These factors, sometimes called buying criteria, are key to understanding the reasons that customers choose to buy your product (or service) versus the products offered by your competitors. The four major criteria that customers use to distinguish competing products are: price, quality, convenience andprestige.

In consumer transactions, price and quality tend to be the dominant factors. However with business-to-business (B2B) transactions (also called industrial marketing), service issues such as reliability, payment terms, and delivery schedule become much more important. The sales transaction in an industrial marketing scenario also differs from consumer marketing in that the purchase decision is typically made by a group of people instead of one person, and the selling process can be much more complex (including stages such as: request for bid, proposal preparation and contract negotiations).

By identifying customer needs through market research and analysis, companies can develop a clear and concise value proposition which reflects the tangible benefits that customers can expect from the company’s products. And once the primary buying criteria have been identified, marketing efforts can influence the customer’s perception of the product along the four main dimensions (price, quality, convenience and prestige), relative to the competition’s product.

Behavioral Analysis (Purchase Process and Patterns)

Occasionally, customer behavior analysis requires a more in-depth understanding of the actual decision-making process of the customer purchase. This may be especially true in an industrial marketing scenario. Examples of purchase process questions to be answered here include:

* What steps are involved in the decision-making process? * What sources of information are sought? * What is a timeline for a purchase (e.g., impulse vs. extended decision-making)? * Will the customer consult others in their organization/family before making a decision? * Who has the authority to make the final decision? * Will the customer seek multiple bids? * Will the product/service require significant modifications?

Behavior profiles can also focus on actions, such as: which types of items were purchased, how frequently items are purchased, the average transaction value, or which items were purchased in conjunction with other items. To understand the buying habits and patterns of your customers, answer the following questions:

* Reason/occasion for purchase? * Number of times they’ll purchase? * Timetable of purchase, every week, month, quarter, etc.? * Amount of product/service purchased? * How long to make a decision to purchase? * Where does the customer purchase and/or use the product/service?

Customer Demographics

The second major component in customer analysis is identifying target market segments that are predisposed to preferring your products over those of your competitors. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. A marketing program aimed at individual segments needs to understand and capitalize on the group’s differences and use them strategically in all advertising campaigns.

Gender, age, ethnicity, geography and income are all market-segmenting criteria based on demographics.

Typical questions to ask when determining the demographics of the target market include: * What is the age range of the customer who wants my product or service? * Which gender would be most interested in this product or service? * What is the income level of my potential customers? * What level of education do they have? * What is their marital or family status: Are they married, single, divorced? Do they have kids, grandkids? * What are the hobbies of my target customers?

The target market segments are specified by demographic factors: age, income, education, ethnicity, geography, etc. Then by having a well defined set of demographic factors, marketing will be able to identify the best channels to reach these specific demographic segments.

Customer Analysis Example

Customer Analysis References

Market Analysis {U.S. Small Business Administration (SBA) Website’s content on Marketing Analysis} http://www.sba.gov/content/market-analysis

“Analyzing Customers in Your Business Plan” 2011 {Growthink, Inc.} http://www.growthink.com/businessplan/help-center/analyzing-customers-your-business-plan

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Inevitably, these changes lead to changed consumer behavior studies by which, when, how, and why the topics are studied. Like any other discipline, systematic analysis of the knowledge development status of consumer behavior field is critical in ensuring its future growth (Williams & Plouffe, 2007).It is of a greater importance for a field of research such as consumer behavior that, as ...
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Consumer analysis is the process where information about the consumer is found out from market research like the needs of the consumer, the target market and the relevant demographics so that this information can be used in market segmentation for further steps of market research. It is very useful in predicting consumer behaviour.
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Customer research (or consumer research) is a set of techniques used to identify the needs, preferences, behaviors, and motivations of your current or potential customers. Simply put, the consumer research process is a way for businesses to collect information and learn from their customers so they can serve them better.
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Here are six steps you can use to conduct a consumer analysis: 1. Review your industry. This can include a brief historical background of your industry, trends, patterns, an overview of your competitors and the factors that influence the industry. Doing this can help you guide your business or marketing plan. Researching your industry can help ...
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Customer analysis allows you to better understand what those needs are and tailor your product, your training materials, and your messaging to better address those needs before the customer churns. 2. Smarter product improvements. Knowing customer needs is a good way to decide what new features and improvements you should make to your product.
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Abstract. In this article, we document the evolution of research trends (concepts, methods, and aims) within the field of consumer behavior, from the time of its early development to the present day, as a multidisciplinary area of research within marketing. We describe current changes in retailing and real-world consumption and offer ...
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Customer needs analysis: Definition & research methods. 10 min read Customer needs analysis is the process of identifying a customer's requirements for a product or service. It's used in all kinds of product and brand management contexts, including concept development, product development, value analysis, and more.
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Introduction to Customer Analysis
A customer analysis (or customer profile) is a critical section of a company's business plan or marketing plan. It identifies target customers, ascertains the needs of these customers, and then specifies how the product satisfies these needs. Customer analysis can be broken down into a behavioral profile (why your product matches a customer ...