How effective is data-driven market research?
In the age of data-driven marketing, measuring success and calculating quantitative, directly attributable key performance indicators (KPIs) are on every company’s agenda. These include:
- Return on Adspend (ROAS)
- Customer Lifetime Value (CLV)
- Monthly Active Users (MAU)
- Conversion Rate (CR)
However, there are still some areas of marketing that are not so easy to measure and assign to specific channels. These include consumer behavior, which is changing faster today than ever before.
Classic market research not enough
In principle, market research is more important today than ever before in order to explore one’s target group and provide answers to questions about customer wishes. In most cases, classic market research uses active surveys and interviews as a basis for this.
The biggest problem with this methodology, however, is that consumers are influenced during active questioning (interviewer bias), as well as giving answers that are considered socially desirable (social desirability bias). It is therefore hardly possible to find out the unbiased and uninfluenced “real” opinion of the target group through surveys and to classify these results as representative.
In addition, advancing globalization is causing competitive pressure to increase extremely and, at the same time, increasing digitization is enabling new companies, provided they have the right knowledge, to reach their target group more precisely across different channels than ever before. Thus, it is becoming increasingly critical for companies to clearly understand the wants and needs of their target audience in order to address them in the best possible cost-effective way.
Qualitative insights from surveys and focus groups can provide a first starting point, but these results can be poorly or not at all linked to other quantitative KPIs (such as conversion rate). So today, the world of online marketing, which is largely based on clicks, and the world of market research are still largely incompatible.
At the same time, it is becoming increasingly important to be able to recognize new trends and react flexibly to them. So, our clients want to know how market research can be sustainably linked to the data-driven world of online marketing.
An example in the context of outdoor clothing: when customers are asked about the ideal features of a rain jacket, they lack a comparison of all the products available on the market. The answers given thus only relate to the respondents’ own experience and perspective.
For these reasons, so-called supported surveys are a valuable source in the first step, but they only provide statements from a limited number of consumers and cannot be easily generalized.
Data-driven market research enables connection with online marketing metrics
In contrast to traditional market research, data-driven market research offers a way to gather insights from direct and uninfluenced customer communications from a variety of communication channels. These include, for example, emails, forums, blogs, support tickets and many more. Here, consumers’ problems and concerns come to light in an open and unvarnished way, which at the same time compares well with traditional market research.
Data-driven market research examines statements made by the target group organically, voluntarily and completely uninfluenced. It is important to understand that in most cases this data is already available in various channels, but has not yet been evaluated by many companies.
The evaluation thanks to data-driven market research also makes a new calculation of the marketing ROI possible, as new factors of customer engagement become measurable at all. It can be shown more quickly which features customers are satisfied or dissatisfied with and which touchpoints are important to them.
Classic metrics from online marketing such as “Monthly Active Users” or “Time Spend on Site” can thus be combined with qualitative insights to answer the question of why customers prefer a particular product over another. It can also increase the speed of product marketing and development and, accordingly, its effectiveness.
