While the world is in crisis and no one is sure what will happen next with the global economy, your customers’ priorities, needs, and motivations are changing by the minute. Whether you lead a consumer-facing or B2B organization, your customers are distracted by the chaos that is happening around them.
It has never been more important to listen to your customers. While it is tempting in times of uncertainty to cut costs and view market research as a discretionary expense, our experience shows that those organizations who understand their customers best are the ones who build lasting loyalty and long-term sustainability, even in uncertain times.
According to a study published in the Harvard Business Review after the 2008-2009 recession, organizations that invested in marketing and research, while increasing their operating efficiency, grew at an average rate of 13% per year in the three years following the recession, and were 37% more likely to outperform their peers that simply cut costs or laid off employees.
So, here are three questions to ask yourself about your market research strategy:
- Am I making decisions based on what I knew about my customers last year? When things are changing as rapidly as they are now, last year’s information – or last month’s information – could be completely wrong. Smart leaders check in with customers on an on-going basis. This could be a simple pop-up poll of website visitors, or a brief interview of a randomly selected customer every week.
- How much will it cost my organization to be wrong about the decisions we are making right now? Most organizations I know are pivoting some aspect of their business model to respond to the changing marketplace. How much are you investing in pivoting your business? Spend at least 10% of that investment on listening to your customers and what they think of your plans. That small investment could save a lot of cost and trouble in the long run.
- What do other organizations know about my customers? People prefer to do business with organizations that understand and meet their needs. A recent study found that forty percent of U.S. consumers say they have purchased something more expensive than they planned to because of personalized service. Your customers can take their dollars anywhere. If other organizations understand your customers better than you do, they will win their loyalty.
How much should you be investing in listening to your customers? We know that organizations that spend at least 1% of their total annual revenue on listening to their customers grow faster than those that spend less. The most successful consumer brands spend up to 15% on customer research.
Contact us to learn more about how you can build smart listening strategies into your current plan, no matter the size of your budget.