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Lean Market Research: How to Use Lean Research to Understand the Customer

Marketers spend $33B a year on market research. It’s a huge number that’s driven by marketing’s never-ending quest to understand what the customer really wants. It goes without saying that companies that understand and deliver exactly what the customer wants across product development, marketing, sales, and customer service have a distinct advantage. Marketers have always understood this. So why is that so few marketers are able gather customer insights that truly impact the business?

The short answer is that traditional market research is broken. The long answer is that traditional market research makes gathering high quality customer insights really hard. Legacy research techniques are expensive and time consuming and make it difficult to have meaningful conversations with prospects and customers. When forced to make the seemingly inevitable tradeoff between quality and cost, many marketers have opted for the low cost, low quality option. In this world, market research becomes a perfunctory exercise – something that simply doesn’t impact the company’s performance. In fact, many marketing organizations just get out of the research game all together, choosing instead to treat the market research function as something that’s meant to keep third party analysts and thought leaders happy.

It doesn’t have to be this way though. A small number of marketers are showing how market research can collect really valuable insights from customers at a fraction of the cost. They’re developing new research techniques that use new processes and tools to increase quality and decrease costs. I call this “lean” market research because it bears a lot of resemblance to the lean startup movement. Lean market research has five defining principles:

  1. Marketing can and should engage customers directly, as opposed to through third party research companies.
  2. Marketing should place a premium on a small number of high quality conversations, as opposed to a large number of cursory surveys.
  3. Marketing should be continuously collecting insights and intelligence, as opposed to conducting infrequent, “big bang” research studies.
  4. Marketing should use low cost, self-serve research technologies, as opposed to cumbersome, expensive services.
  5. Marketing should become the “voice of the customer” and use insights to transform the business, as opposed to conducting research in a vacuum.

These principles have the potential to simultaneously improve the quality of insights collected from customers and reduce the time and costs associated with conducting that research.

Lean Research – 10 Tips and Tools

Here are ten tips and tools that will help you gather quality customer insights in an efficient, low cost manner:

1. Customer access

Lean market research is predicated on marketers having easy access to prospects and customers. Just a few years ago, most companies were still dependent on third party research and consulting firms to tell them who their customers were, what they wanted, and what they were saying. In recent years, this situation has dramatically improved. Marketers now have nearly instant access to a large number of smart, informed prospects and customers thanks to a variety of technologies such as social media, collaboration tools, CRM applications, and customer databases.

bonobos customer research

A Bonobos email asking for customers to contribute to product development

One of the most important factors behind improved customer access is how easy these technologies make it for marketers to identify and connect with the customers they want to talk to. Take the challenge of gathering information from prospective buyers in a new target market as an example. Historically, a marketer needed to use a third party research or consulting firm to conduct this research. Doing so was expensive and time-consuming. Most importantly, it dis-intermediated the marketer from the conversation with the customer. Today, a marketer can use services like Data.com or NetProspex to identify respondents in new markets for their research efforts. These data-as-a-service providers take minutes to use and are much more cost effective than the traditional tactics used to identify potential respondents.

2. Quality over quantity

What’s more important to your business: one truly exceptional insight or statistically significant datasets? Many marketers who simply want to look good in front of CEOs and boards will pick the latter, but marketers who want to have a true impact on the business will pick the former. Fortunately, there is one simple way to collect exceptional insights and that is to have substantive, in depth conversations with your smartest customers. Don’t use surveys, don’t worry about data, and don’t create a presentation that summarizes your findings. Simply have deep, meaningful conversations with the people who can make or break your business on a regular basis.

There are a handful of techniques a marketer can use to get the most out of these conversations. First, understand what topics you want to cover in the conversation and create an agenda to guide the conversation in that direction. Second, have a 30 to 60 minute conversation either in-person or over the phone. Third, make sure that you listen intently for key insights and ask follow up questions to dig deeper. Finally, capture the key insights and sound bites from the conversation by drafting a simple email that can be shared with other members of the team.

3. The right questions

One of the most important things a market researcher can do when using the lean approach is to make sure that they are asking the right questions. This starts with understanding what parts of the business customer insights can most dramatically impact. Product development and pricing are two examples where high quality customer insights can lead to better decisions. It’s also important to ask questions that allow customers to share negative information with you. All too often, marketers ask questions that are framed in such a way that the customer can’t provide negative feedback.

4. From learning to collaboration

Most marketers use market research to observe and learn about customers. Very few use it as a vehicle to actually collaborate with customers in the name of co-creating products and customer experiences. Market research can drive the development of really great products, marketing campaigns, sales people, and customer service.

What’s the difference between using research to learn and using research to collaborate? One example comes from the product development field where product managers share imperfect mockups and prototypes to customers in an effort to collaborate and solicit more specific feedback. This is in stark contrast to just asking a standard survey question like “what are your requirements?” A variety of collaboration tools like Citrix GoToMeeting and Google Hangouts can help you share product information like mockups with customers so that your collaboration is more effective.

5. Always on research

A fundamental tenet of the lean startup movement is to rapidly iterate the product based on customer feedback. This presumes that the startup is able to collect product feedback from customers continuously, rather than waiting months or quarters. The same principle applies to lean market research – marketing should be continuously collecting insights from customers.

There are some simple techniques that will help you run continuous market research. First, make sure that you participate in two to three conversations with customers per week. Sales and customer service can help set these meetings up for you. Second, create a customer council of 15 to 20 of your best customers and ask them questions regularly via email, the phone, and in-person meetings. Finally, remember that your customers want to talk to you (they feel valued when you reach out to them), so don’t feel like you’re imposing on them when you ask for their input.

6. An abundance of data

There’s an enormous amount of market research data now available online. Most of this data is available in the form of new, publicly available datasets. For example, Google AdWords makes a tremendous amount of data available on the search habits of consumers. If you were a marketer researching the popularity of different shoe brands, Google would tell you that there are 45M searches for “Nike” and only 20M for “Adidas” every month. Or if you were interested in knowing whether to call your new telephony product a phone system or a PBX, Google would tell you that there are 550,000 searches for “phone system” and 673,000 for “PBX” every month.

google keyword tool research

The Google Keyword tool in action

Google’s new Databoard is another tool that marketers can use to conduct research. It allows you to analyze data from various Google research studies and create presentations and infographics using the data. Right now, there’a a lot of data on the mobile industry and not much else. But if Google expands into other markets, this could become a very powerful tool.

You can also find data that’s been collected by large market research firms online. These firms often publish complete research reports in obscure online locations. Some simple queries on Google that combine the names of market research firms, topics, and document extensions such as PDF and PPT will dig a lot of data up from these firms.   

7. DIY surveys

Many marketers still have a need to conduct traditional, survey-based research, particularly when they require a large dataset. A large number of surveys can help answer questions like “do you plan to spend more or less money on X this year?” Lean market research techniques are also helping marketers in this area by allowing them to conduct do-it-yourself (DIY) surveys in a matter of days.

As mentioned previously, the Internet has made DIY research possible by exposing massive pools of respondents to marketers via tools like Data.com and NetProspex. Furthermore, low-cost survey tools like SurveyMonkey and Wufoo make it easy to create and manage surveys. As a result, more and more marketers are bringing traditional, survey-based research in-house. And the time required to run a survey is dropping dramatically, from months to days.

8. Free research from analysts

Some top tier research firms now make their research available for free. Up until a couple of years ago, marketers had to purchase annual subscriptions that ran in the $25,000 range from the likes of Forrester and Gartner to access this research. Research firms like Altimeter Group have been at the forefront of the “open” research model. Marketers can now find top market research analysts like Jeremiah Owyang publishing lengthy reports on hot topics like the collaborative economy. These aren’t just puff pieces either. Jeremiah’s Collaborative Economy report includes input from 69 contributors and some very thoughtful analysis.

Collaborative Economy Slide

A slide from Jeremiah Owyang’s report on the Collaborative Economy

Even traditional market research firms are trying to get in on the act. A number of analysts at large firms such as Forrester are active bloggers. A recent post by Shar VanBoskirk offers some really insightful analysis of the recent Salesforce/ExactTarget acquisition. You can also find various analyst presentations available for free online. For example, Gartner’s Twitter account regularly promotes free webinars like “IT Spending Forecast, 2Q13 Update: The Impact of Mobility on Spending”.

9. Voice of the customer

What’s the sound of one marketer conducting research? [                                             ] Exactly. Marketers need to make sure that the insights they’re collecting are shared with the rest of the organization. There’s a simple way to do this and that is to assume the voice of the customer. When communicating with co-workers and the rest of the organization, reference what you’ve learned about the customer. Focus on insights such as who they are, what they’re motivated by, and what they want from you. The voice of the customer can be particularly powerful when you use actual quotes and sound bites sourced directly from the customer.

10. Actionable research

One of the pitfalls of legacy market research is that it’s often not put to use. The primary reason for this is that traditional research often fails to produce insights that help a business make better decisions. As you might expect, marketing tends to bury this research, leaving it out of strategic discussions about product, sales, and marketing. A lean research approach yields research that is actionable. That’s because going lean isn’t just about making research easy – it’s about making it easy so that gathering valuable customer insights becomes efficient and cost effective.

If you’re using lean research principles, you’re likely collecting information that can be put into action. When you’re involved in decisions regarding product development, pricing, sales models, and marketing campaigns, try to bring the customer’s perspective to the table. Ask yourself – do we have any data or insights that would tell us how the customer would react to this decision? This is when your lean research efforts pay off – the company is now making better decisions because marketing talked to a few customers.

These ten tips should get you started with your own lean research projects. What are your recommendations for conducting market research? How do you gather high quality insights from customers? Let us know in the comments below.

Finally, I’d like to thank Bob Scheier who got me thinking about this topic by asking a question about research and planning on my post on the content marketing process. Thanks Bob!

About the author:  Scott Albro is the CEO and founder of TOPO. TOPO is a research, advisory, and consulting firm that believes in a really simple, but powerful idea – that all revenue can be distilled down to a series of conversions. By connecting everything we do back to this core idea, we help sales and marketing organizations exceed their revenue targets. You can connect with Scott on Twitter.

  • Michael Boykin

    There are definitely advantages to using an established research firm, but I definitely agree that the in-house, DIY approach can yield similar, if not better, results while leaning the business.

    Including the defining principles and them tips on how to approach such a task make this a very helpful and engaging post. Thanks for sharing!

  • Thank you for mentioning our research!

  • Allen Roberts

    Outside the tech arena, I am finding that with a bit of imagination, applying very small scale market tests with customers, an in market A/B test can work. You need a few customers/potential customers with whom you can collaborate deeply.
    The benefits go both ways.

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