The rapid decision-making power of market research and consumer insight is never more valuable than in times of crisis. It’s safe to say that 2020 was a year like no other and that 2021 will certainly not revert back to the old normal. In such a period of heavy and rapid change, the old adage that “Marketing begins with knowing your customer” is so much more important as consumer behaviours have seen very swift and drastic changes in the last year or so.
The Covid-19 crisis has reinforced what we already know: that brands must communicate in very local and precise terms, targeting specific consumers based on their circumstances and what is most relevant to them. That means truly understanding the situation on the ground. For some businesses, such as restaurants or retailers, it may even mean tailoring communications at a level never done before.
The EY Future Consumer Index, which has conducted five waves of research with 14,500 individuals in 20 countries since the start of the pandemic, has identified five different cohorts of consumers:
- Affordability first (32% of consumers): Living within their means and budget, focusing less on brands and more on product functionality.
- Health first (25%): Protecting their health and that of their family, choosing products they trust to be safe and minimizing risks in the way that they shop.
- Planet first (16%): Trying to minimize their impact on environment and buying brands that reflect their beliefs.
- Society first (15%): Working together for the greater good, buying from organizations they find to be honest and transparent.
- Experience first (12%): Living in the moment to make the most of life, often making them open to new products, brands, and experiences.
This mean that now more than ever marketing messages need to be personally relevant, aligned to an individual’s situation and values, as opposed to demographics, such as age and gender. Creating a personal, human connection within any commercial message requires defining consumer segments that describe people according to multiple dimensions that influence their purchasing behavior — from their psychographics to attitudinal characteristics.
So the question comes natural. How can this be achieved? The answer is simple. Get to know your audience, first!
The first step is market research. It is a foundational part of any business strategy. Unfortunately, too many companies only perform cursory “research” or skip this step entirely. As a result, they miss out on key insights into their potential customers’ behaviours that could boost sales.
Market research is a targeted and specific approach that seeks to understand not just all consumers, but also certain segments specifically. You can then use this data to determine everything from the tone of your communications to what products you should offer.
Hence the importance of knowing things like:
(i) Who buys your products? Or, sometimes more importantly, who doesn’t buy your products? Knowing what gaps you have can help you better craft your value proposition or even redesign your product offering to take advantage of those opportunities.
(ii) What channels do your target clients use to look for products? If you aren’t delivering your message in a place that your audience will see it, you might as well not even deliver it.
(iii) What do your customers feel is different or valuable about your product? Identifying what prompted others to make the final purchase decision can help you highlight that same value to others.
Proper market research not only helps you reach your consumers, but it also offers the ability to strategically plan your business. If you know what products your target audience is interested in, what is trending, and what their buying patterns are, you can plan your products or services accordingly. It offers you the ability to boost inventory based on what is selling or alter your services to fit consumer demand. Your company can be ready for what’s to come and stay ahead of competitors.
Too many times, during recessions, companies cut their market research budgets. This is adding fuel to the fire. During periods of slow sales, it’s more important than ever to research why you are losing customers and which ones. It’s also necessary to pivot to find new market niches and potential new products and services. If you don’t do any research, you’ll never know what those new niches might be.