The Business Case for Customer Research 

It’s been a tumultuous few years for business. Supply chain problems, inflation, digital transformation, talent shortages, and changing consumer demands have kept companies in a constant state of crisis management and reactive marketing. 

Today, however, the most successful, resilient companies are moving away from gut feelings and toward proactive, data-informed marketing strategies with customer research. With 62% of researchers reporting it as being more central to their business decisions in 2024 than just two years ago, customer research is no longer just nice to have — it’s a strategic imperative for 2025 and beyond.

What Is Customer Research?

Consumer or customer insights research, a subset of market research, is the process of methodically gathering and interpreting information about audiences that are or may become customers. It’s used to help a business create or finesse products and services according to consumer wants and needs.

“Without data, you’re just another person with an opinion.” — W. Edwards Deming

Types of customer research can include primary or secondary research.

• Primary research involves interfacing directly with your target audience to get first-party data through methods like focus groups, questionnaires, and interviews.
  
• Secondary research, on the other hand, is the process of gathering data collected by other organizations to understand trends and market conditions. Secondary research can range from industry reports to statistics and academic papers. 

Why Customer Research Matters Now More Than Ever

Customer research-led marketing has become one of the most reliable ways to predict and adapt to market changes and evolving customer behavior without costly guesswork, yet only 40% of marketers use it in their decision-making today.

In a time when every decision and dollar counts, client research bridges the gap between what businesses think customers want and what customers actually need so the company can make data-informed decisions about targeting, messaging, budget allocation, and more. It also helps marketers identify untapped opportunities, improve the overall customer experience, and maximize ROI on all initiatives. 

“I believe in innovation and that the way you get innovation is to fund research and learn the basic facts.” — Bill Gates

When to Conduct Customer Research

We commonly see businesses turn to customer research when they reach crisis mode due to high churn, unmet consumer expectations, marketing inefficiencies, or the misalignment of cross-functional teams on customer needs. 

While consumer research can help in these situations, it’s vital to conduct market research not just when solving challenges but on an ongoing basis throughout your business journey — especially in the beginning. If you need to learn something about your target audience, customer research is the most likely answer. 

Here are some examples of when you should dive in:

• When launching a new product/service: Test and validate market demand and refine your offering before launch.
• When refining audience targeting: Understand and reach the right audiences with custom messaging.
• When entering a new market: Determine local competitors, preferences, and possible challenges.
• When planning a major campaign: Ensure your messaging resonates with your target audience.
• When there are industry shifts: Stay ahead of changing trends and customer needs.
• When competition intensifies: Differentiate your offerings and identify your unique value proposition.
• When rebranding or repositioning: Align your new image with customer expectations and market demands.
• Regularly (e.g., annually): Keep your finger on the pulse of customer sentiment and emerging needs.
• After significant events or crises: Understand how external factors have impacted customer behavior and preferences.
• When making strategic business decisions: Inform your choices with data-driven customer insights.

Customer research shouldn’t be a one-time event but a continuous process. Regular research helps you stay attuned to your market and customer needs.

Find out how we used original market research to help a family-owned supermarket understand customer perception and capture a new market segment through a brand relaunch.

The Cost of Skipping Research

To their detriment, consumer research is usually one of the first steps businesses skip when launching a new service, product, or marketing campaign. The companies that come out on top usually have the best grasp of their consumer’s needs. So, if you’re not doing customer research, your competitors probably are — and skipping research makes it easier for them to outperform you. 

Companies that skip customer research face significant risks, including:

• Misaligned product-market fit
• Inaccurate pricing strategies
• Wasted marketing resources
• Ineffective campaigns
• Poor adoption rates
• Negative brand impact

Take Target’s failed 2013 Canadian launch as a cautionary tale. The company spent millions on marketing without researching its Canadian customer segment. The result? Higher prices and different products than U.S. locations led to store closures within two years — a costly failure that proper research could have prevented.

The moral of the story is that the cost and time required for research are almost always worth it, but the risks of skipping it rarely are.

Common Hesitations and Reality Checks

As a full-service digital marketing agency offering help with customer research, we know you may be hesitant to spend more time and money upfront, especially when you might already feel confident in your audience understanding and the direction of your marketing strategy. Why change what’s working if you’ve already had success?

Here are some of the common objections we hear and why we still recommend that all our clients invest in customer research.

“It’s an Extra Expense We Can’t Afford”

While it’s true that research requires an upfront investment, it’s essential to view it as exactly that — an investment, not an expense, often with a payoff that’s well worth it. Obtaining research on customers can significantly improve the effectiveness of your marketing efforts, leading to better returns on your overall marketing spend.

Studies have shown that:

• Organizations not doing research experience
  • 2.8% growth
  • 11.0% profitability
• Organizations doing some research experience
  • 17.7% growth
  • 16.6% profitability
• Organizations doing regular research experience
  • 30.7% growth
  • 19.9% profitability

Modern market research tools like remote AI-powered virtual focus groups can also be significantly more cost-effective, saving you $4,500-$7,000 on what you’d spend doing a traditional in-person focus group — and likely more when you consider the costs of poorly informed marketing strategies.

“We Don’t Want to Bother Our Customers”

No one wants to overwhelm their audience, but consumer research can improve your customer relationships when done thoughtfully. Most customers appreciate the invitation to share their opinions, especially if it improves the products or services they use. In fact, 77% of consumers perceive brands more favorably when they ask for and accept feedback. Involving them sends a message that you care about their experience and want to give them a voice.

Market research doesn’t have to be intrusive, either. It can be conducted in a way that respects customers’ time and attention. Digital tools allow you to reach customers at convenient times and on their preferred platforms. Whether through brief surveys, quick feedback forms, or even informal interviews, there are many ways to gather insights without overwhelming people. 

While some participants will offer input without compensation, you can get them excited to participate by providing an incentive in exchange for their time and insights, such as: 

• Discounts
• Free trials or products
• Gift cards
• Exclusive content
• Entry into a prize draw
  

“We Don’t Want to Get Negative Feedback”

It’s natural to feel apprehensive about the possibility of negative feedback. While it can be uncomfortable, constructive feedback is a powerful tool for growth and improvement. It highlights areas where your product, service, or marketing falls short of customer expectations you may not have learned about otherwise. 

Ignoring or avoiding constructive feedback doesn’t make the underlying issues disappear, either. In fact, it can make them worse over time. By welcoming feedback, even when critical, you can resolve minor problems before they escalate into bigger ones that harm your reputation or customer loyalty. 

“We Don’t Have Time for Research”

Time is arguably your most precious and limited resource, which can make it tempting to skip market research for the sake of moving quickly into your marketing execution. However, investing in research upfront can actually save you time and resources long term.

Without proper research, you risk launching a product that doesn’t meet customer needs or rolling out a marketing campaign that falls flat. Correcting these missteps later on often requires more time, effort, and expense than if research had been conducted from the start.

With consumer research, you can zero in on what matters most to your customers and focus your efforts on the most promising opportunities. By understanding where to allocate your resources most effectively, you can avoid wasted efforts on strategies or campaigns that might not resonate with your audience. This strategic focus can lead to quicker and more successful outcomes.

AI has also made research faster and easier; AI-powered tools can manage and interpret massive swaths of data in a fraction of the time it takes humans to deliver actionable insights. Companies using AI-backed consumer research benefit from smarter, faster, better-informed business decisions that drive tangible results. 

Key Benefits of Customer Research-Led Marketing

Let’s talk more about why a consumer research-led marketing approach can be a win for both your organization and your customers.

Understand & Target Audiences With Precision

Through comprehensive consumer research, you can effectively identify and connect with your market and uncover new demographics that could benefit from your offerings. You may assume you should focus on one population subset, only to learn through research that a new demographic could also benefit from your offerings. 

By identifying key segments within your market, you can create detailed customer personas, personalized marketing messages, and offers that speak directly to the unique needs of each group. 

Enhance Brand Perception

Consumer research paints a clear picture of how customers view your brand and reveals gaps between your intended image and actual perceptions. Knowing your brand’s strengths and weaknesses, you can better tailor messaging, personalize experiences, and guide product development to align with customer expectations. Tracking perception changes over time can even guide you in reshaping your brand narrative, addressing misconceptions, and reinforcing positive associations. 

Optimize Marketing Campaigns

Consumer research empowers you to fine-tune every aspect of your campaign and allows you to:

1. Sharpen your campaign focus by identifying and addressing the most pressing customer needs in your messaging.
2. Select the most effective channels by discovering where your target audience spends their time and which platforms they prefer.
3. Create better content that genuinely engages your audience by understanding the types of material that resonate most with them.

Consumer research-driven campaign optimization leads to more efficient use of resources and improved ROI across all marketing channels.

Mitigate Risk Through Informed Decisions

Marketing stakeholders often make decisions based on instinct, passion, past behaviors, or economic indicators. This risky decision-making can lead to issues like:

1. Falling behind as customer preferences and market trends evolve
2. Missing opportunities for targeted personalization
3. Lacking real-time insights needed for agile decision-making
4. Overlooking competitors’ actions and broader market dynamics
5. Relying on outdated assumptions rather than current data
6. Failing to identify and capitalize on emerging trends or opportunities

Customer research yields insights that allow you to validate ideas, test concepts, and anticipate potential challenges before they escalate into costly mistakes or reputational damage. If business stakeholders have differing opinions, consumer research offers raw data directly from your target audience to keep you focused on the customer’s perspective, which is critical for making good business decisions. 

In the end, you’ll have what you need to base decisions on facts rather than arbitrary priorities, assumptions, educated guesses, or gut feelings and move forward confidently.

Improve Offerings & Pricing 

Consumer research is a powerful tool for fine-tuning your products and services based on features customers like or dislike. It helps you create more compelling offerings that resonate in the marketplace, improve audience engagement and loyalty, and position your brand for success. You can even find out if your pricing balances profitability and customer satisfaction optimally.

Research also helps you gauge interest in new products and fuels their development. For example, in 2008, LEGO found that females comprised only 10% of its market, so they conducted a four-year consumer research project to learn what girls want from LEGO toys. As a result, the company introduced LEGO Friends, a new collection that included mini dolls with backstories designed for girls. This development grew LEGO’s net profits by 35% in the first 6 months of the year and quadrupled its share of the toy market in five years. 

Differentiate Your Brand From Competitors

Staying ahead of the competition requires that you understand the market. Consumer research equips you with the insights needed to outmaneuver your competition by:

1. Finding untapped opportunities your competitors may be missing
2. Deeply understanding your market position relative to competitors
3. Differentiating your brand with unique strategies

With these insights, you can position your business as an industry leader, fill market gaps, meet unmet customer needs, and thrive in crowded markets.

Provide a Top-Notch Customer Experience

One of the best ways to identify pain points in the customer journey and improve your customer experience is to ask the customer outright. Consumer research can illuminate:

• Critical pain points and bottlenecks that frustrate or deter customers
• Key touch points throughout the customer journey 
• Hidden opportunities to make customers happy

Armed with these insights, you can reduce friction, personalize touchpoints, and proactively address issues in the buyer journey to make it smoother and more satisfying.

Final Word

It’s clear that customer research is a necessary investment in your business’s future. Companies that take a customer research-led marketing approach continue to outperform those that don’t. While it may be tempting to cut corners, quality consumer insights can keep your business on the right track. Can you really afford not to know your customers better in your crowded market?

Remember: your competitors are likely already doing customer research. The question isn’t whether to invest in research but how quickly you can gather the insights needed to drive your next big success.

Gain Deeper Audience Insights With Avalaunch Summit

Ready to gain deeper insights into your audience? Get an Avalaunch Summit consultation today and see how our remote focus group platform delivers original research to supercharge your marketing campaigns.