Client, Meet Your Customer - Part 1

by Patricia Fitzgerald

There’s a phenomenon in our biz known as HIPPO: Highest Paid Person’s Opinion. Here’s how it happens. An agency presents a new marketing campaign to a roomful of execs, including the CEO. When asked what they think, the client team turns its collective head toward their fearless leader, waiting for her to give it a thumbs up or down.

Said CEO responds that the font choice is too hard to read, or that the photo isn’t quite right, or that the headline misses the mark, or that she hates the color orange. Before you know it, everyone else in the room is nodding in agreement and chiming in with their own critiques. The Highest Paid Person’s Opinion can easily kill a strong campaign like the one in our hypothetical example. But it shouldn’t. And here’s why.

The CEO is not the customer

Neither is anyone else in the room who happens to be on the company’s payroll. Even if you use the products and/or services your company sells, you are still the client and not the customer. You are biased. You don’t have enough distance. You bring baggage, stamped all over with the company name. To be brutally honest, the CEO’s opinion (and anyone from the client side) on font choice, imagery, color, and messaging is not the most reliable, nor the most important.

What is important is whether or not that campaign connects with your audience, who is conspicuously absent from the room. Would your customers like the font, the photo, the color, the headline? Who knows, because they’re somewhere else, living their lives. But there is a way to find out what they think of your campaign, your products and/or services, and your company. It’s called market research, and it’s way more reliable than HIPPO.

Companies in the U.S. spend billions of dollars on market research — $6.7 billion a year, according to the Insights Association. But that doesn’t mean market research is beyond the reach of small businesses. While you don’t have to burn through your annual marketing budget on research, as a small business owner you’d be wise to invest at least some time and money into learning more about your customers. Specifically, how those customers feel about you.

What we mean by market research

Before we dive into how to go about doing that, let’s define what we mean by market research. Many start-ups conduct market research before they launch their business or a new product/service, mostly to test the waters: Is there an audience and demand for what they do, what’s the competition look like, and how much are people are willing to spend on what they’re selling? If you’ve ever applied for a small business loan, chances are you had to conduct and present this type of market research.

For the sake of this post, however, we’re focusing on the market research done by companies who are already in business. The kind of market research we’re interested in (and we encourage our clients to be interested in), is meant to help you gain a better understanding of your audience, particularly in the context of your company.

How well do you really know your customers?

Many small businesses (and their CEOs) will tell you that they already know who their customers are. But customers can be full of surprises, and you may not know them as well as you think you do. Conducting market research with your audience can help reveal a number of important and previously unknown insights into how your customers think and feel, including:

  • What factors influence your audience’s purchase decisions (Price? Reputation? Brand recognition? Cool-factor?)
  • How does your audience perceive you? (Do they like you? Trust you? Think you’re overpriced? Never heard of you?)
  • What negative perceptions or misperceptions do they have of you? (Too cheap? Too expensive? Too snooty? Too small?)
  • How do they see you in comparison to your competitors? (And if they’re choosing your competitors over you, why exactly?)

Market research can reveal a lot of painful truths as well as hidden opportunities. But as ‘80s leotard-and-leg-warmer-sporting Jane Fonda so eloquently put it, “No pain, no gain.” The insight you glean from asking tough questions can help you:

  • Make better decisions about how to position your company and products/services more competitively — with evidence to back it up.
  • Focus your efforts on those areas that will be most lucrative, based on what your customers actually want.
  • Identify and overcome barriers between you and your customers that you may not know were there.
  • Figure out the best way to combat misperceptions your audience may have about you.
  • Learn how to speak to your audience using language and messaging that connect with them.
  • Understand what truly differentiates your business from others, in the eyes of your customers.

Ready, set, research

So now that we’ve convinced you to do market research (we have, haven’t we?), let’s address the “how” part. The first thing to do is ask yourself one simple question: “What do I want to gain from doing this?” Do you want to see how much recognition your brand has out there beyond your company walls? Find out what your customers look for in a business like yours? Test the effectiveness of a specific marketing campaign? See what your audience truly thinks of the color orange? Identifying a specific goal for your market research will help focus your efforts, which in turn generates better, clearer results you can work with.

Once you’ve nailed down your goal, it’s time to decide who you want to research. “Audience” is a pretty broad term. We recommend narrowing it down to particular audience segments, personas, or demographics. Maybe your business is interested in attracting more female millennial urbanites. So target your research on women ages 28-35 living in large cities. Or perhaps your primary target audience are retirees interested in community service. Find folks 65 or older who actively volunteer and research them. Get specific, but not so specific you can’t find enough people to sample from (not sure how many red-headed iguana-owning yoga teachers you’ll find living in Peoria, for example).

To locate ideal candidates, professional market researchers use a tool they call a screener — typically a set of survey-type questions that help filter and identify the types of folks you want to include in your market research. So for example, the screener for a online toy company might ask questions like: “Do you have children under 10? Do you primarily shop for toys online? Do you buy educational toys?” You get the picture. Developing a screener is a good way to ensure the people you’re researching are the right fit for your goals.

Yours is to question

Figuring out which questions to include on your screener is important. But you’ll also want to decide which questions to ask the folks you finally select. Again, these questions will depend on your goal, and what insights you’re hoping to glean from your research. It’s better to ask fewer, more directed and specific questions, rather than a whole bunch of questions that cover everything under the sun. Be focused and stay on task.

You’ll also need to figure out how you’ll be collecting the responses from your research subjects. Do you plan to record research participants via video or audio, or over the phone? Will you use an online survey and capture the responses that way? And what will you do with the data you collect? Cull, organize and present it as a report? How will you use that data, and who will you share it with? This is stuff you’ll need to consider and plan for before you begin the actual research.

We’ve talked about why market research matters, and the prep work you should do before you dive in. Next week we’ll pick up with Part 2, in which we discuss various approaches to conducting market research — from do-it-yourself to let-others-do-it-for-you. So stay tuned, and remember: Don’t let HIPPO ruin your next marketing campaign. You might hate orange, but your customer may love it.

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