Customer research is one the most important type of research that a company can undertake.  Well designed and executed customer research increases the likelihood that a business will both uncover insights that will drive business growth and reduce costs.  Well designed and implemented customer research reduces customer attrition by improving by identifying what product and service issues turn customers away. 

Poorly designed customer research delivers a poor customer experience and prevents you from getting the most from your budget.

With an increasing number of tools, a business can use, doing customer research is more accessible.  Unfortunately, increased ease of sending out customer surveys does not mean customers will feel listened to and is done poorly.  Surveys look and feel like automated templates, even if they are pretty.

This article will help you better understand what you need to succeed with your customer research and help you better design customer research that will help you develop cost-effective customer research by answering the following seven questions in this guide.

  1. How will you use the insights from your customer research?
  2. Which of your types of customers should you research?
  3. How many customers do you need to survey?
  4. How do you engage customers and have them complete your research?
  5. What do you want to know about a customer’s experience?
  6. How do you profile customers?
  7. How should you report your results and engage your team?


But first . . .


Why do customer research?

In short, customers pay your wage.  Without customers, you have no business and no reason for being employed.  Harsh but true.  Even if you are in a government department or a not-for-profit, your organisation only exists because you have customers.  Your customers may cover a wide range of different types of customers where some can freely choose you from competitors, while others may have no choice at all.

Ultimately all businesses provide someone something.

If you are in a business where customers have a choice, serving them better is imperative.

Doing customer research helps ensure that you do not fall behind your competitors, and it allows you to move ahead of what they offer.  Doing customer research can also help improve business efficiency by reducing your business costs.  With customer research you are better able to make the link between customer service and customer behaviour work for you.

We have helped clients save money by reducing the amount of time and costs linked to assisting customers to overcome mistakes you or they have made.  For a banking client, changes in their application process significantly reduced the number of calls they received asking for assistance in setting up and changing account details.  This change also increased sales by reducing the number of abandoned applications and improving customer recommendations.  For a retailer, we helped them better understand who their customers really were, which led to a change in their product offer, staff training, and communication that increased sales and reduced costs.  For an education client, our research identified persistent issues that we traced back to their initial onboarding visit, which, when changed reduced attrition and reduced costs associated with communication needed to correct misunderstandings.


Best Practice Approach for Customer Research

Customer research is really easy to do badly.  Focus on vanity metrics like Net Promoter Score (NPS) and simplistic ‘Why did you give that score?’ questions is excellent way to both annoy customers who see these as just mass-template messages and the give you limited insight and benefits.  Some senior managers love these two questions, however, for a customer, they don’t relate to what they experience, what they do or how they think about the service they have received.  They are manager-centric questions and not customer-centric.

You may only get one opportunity to get great feedback from a customer . . . don’t waste it!

Our approach, and the one we discuss in this article, uses an experiential and behavioural framework.  That is, customer research should focus on what customers experience.  So that results are actionable in the design and analysis stage, results are mapped back to internal processes.

Expert Tip:  Map out your customer journey from initial to final engagement.

Part of your customer research should always include mapping the customer journey and how each step is reflected in your processes and accountability.

An overarching design approach we use is the EAST framework from behavioural economics.

  • Easy.  Access and completing the survey should be easy and fast.  Customers should not feel the survey is an interruption.
  • Attractive (Relevant).  A customer survey should be relevant to their experience; it attracts them to complete the survey.  Using an attractive design is also helpful.
  • Social.  Customers should feel a social connection to the company by completing the survey.  Showing the manager’s name asking them to do the survey, the staff or team that helped them, and how results are being used help make a customer survey socially engaging.
  • Timely.  Having a customer survey closely follows a recent experience dramatically improves response rates and the level of detail in the feedback given.


How will you use the insights from your customer research?

Before we go any further, an important question you need to answer is what type of customer research you need to do?  Transaction or relationship customer research?  Research that follows a recent contact and asks for feedback on that contact is called ‘transaction customer research’ or ‘moment-of-truth’.  This research forms the basis of ‘voice-of-the-customer’ programmes.  It meets service quality needs and helps resolve a specific issue.  While relationship customer research asks more broadly about what services a customer uses, use of competitor services, intentions, their background and other areas that focus on them and their broader relationship with your business and the market.  Relationship customer research helps with strategy development and uncovering what drives customer engagement with your business.

Customer relationship research provides the best opportunity to gather strategic insights on customer communication, product development, and customer segmentation.

Expert Tip:  Choose transaction customer research for process feedback or relationship customer research for strategy development.


The type of customer research you choose will greatly impact the survey frequency, types of questions, types of analysis and the required sample size.  Businesses without a CRM system that can easily select customers quickly after a recent experience may find relationship customer research easier to implement.

Although you can have some cross-over between transaction and relationship research, you should keep this to a minimum.  Customers who think they are providing feedback on a recent experience will become quickly annoyed if the survey and won’t’ complete a survey they feel is asking irrelevant questions.  Similarly, asking about recent customer experiences in a relationship study can frustrate customers by asking them about experiences they cannot clearly remember or provide accurate feedback.

Expert Tip:  Undertake an annual relationship survey across your customer base or after significant milestone periods.  


Relationships between customers and a business change over time from changes in what customers need, what products they use change, and how they use products change.  Relationships can also change from fundamental differences in what a business offers its customers.  Because the relationship evolves, consider undertaking a customer relationship survey annually or after a significant period, such after their first year or six months after their onboarding.  Understanding your business cycle and using qualitative research with customers will show when the best periods are to survey your customers.

Warning:  Not knowing how you will use the results wastes time in your analysis and undermines the long-term value of your customer research.


Which of your customers to research?

The customers you should interview are the ones most critical to your business’s success.  For some businesses, you may have more than one type of customer; the person buying is not the same as the person using your service.  Customers can include the trade channel that buys your product or installs it for end-users in business-to-business markets.  While not direct customers, stakeholders are an important group to include in some industries in customer research.

Expert Tip:  Map out the customer journey and how each business area supports each stage.

Surveying the wrong type of customers becomes critically important if your survey moves beyond service experience feedback to strategic issues like new products, service changes or pricing.  Asking the wrong people about broader strategic matters can lead to the wrong strategy choice.  For example, asking long-term customers why they became customers is likely to provide the reasons they remain as customers and not what initially made them buy from you.

Whoever the person is, your customer survey should focus on what they experience and what they can know.  If there is a possibility that your customer does not experience all the areas you are targeting for feedback, make sure they can show this and move on to other questions without feeling the survey was intended for someone else.

Expert Tip:  Do not over define your customer.

When trying to get feedback, it is tempting to try and target only a specific type of customer, like a frequent user or high-value buyer.  Only targeting a specific type of person may result in your customer survey not reflecting customer experiences and missing key issues that are undermining business performance.  It may also result in your research reflecting your stereotypes.  Before working with us, a financial services client only focussed on clients that made regular payments.  This approach meant they ignored the farming families that made up a large part of their customer base and undervalued recent retirees in the service delivery.

Another client who made the same targeting mistake focused on frequent buyers and did not include customers who bought once or twice a year.  The logic was that they needed to concentrate on customers that represented the highest value.  However, infrequent buyers made up most of their sales and were the customers they would want to become future high-value customers.  Their research showed customers found their service and store layout easy to navigate.  Unfortunately, this was not the case.  Frequent buying customers had learnt how to navigate poor store layout and how to get around problems created by our client’s service.  Their infrequent buying customers were moving to a different company because the provided service assumed they already knew how to get what they needed, including how to contact customer service.

If in doubt, use broad-based behaviour triggers for customer targeting.


How many customers to survey?

With online surveys and CRM systems, it is too easy to survey everyone all the time.  Over surveying your customers will reduce their willingness to buy from you and help you with your research.  A previous banking client used to send a survey to every person whenever they had contacted them.  For a customer opening a new mortgage account, they were receiving multiple surveys a day for a month along with onboarding communication, offers, and the actual customer service contact – which, when they responded, triggered another survey!

Expert Tip:  Unless you are paying customers to do your survey, they are volunteering to help you.  Treat them like they really matter to you and leave them wanting to help you again.

To prevent over surveying your customers, consider sampling only a subset of your customers.  For clients whose customers have regular contact with them, we often put in place a moratorium that ensures customers are only contacted up to twice a year for their feedback.  New customers can feel overwhelmed with surveys being sent to them, among the other onboarding material.

The most important thing in choosing a sample size that it is large enough to be representative.  It is better to have several smaller surveys than one large survey.  Smaller surveys keep customers engaged and help you track changes.


So how many?


For transaction, surveys aim for at least 10% to 25% of customers who did the thing you are targeting with the survey.  For example, 10% to 25% of people who have bought from you in the past month.  This means between one in ten and one in four customers are giving you their feedback about their experience.  This means that if your survey has a good representation of results, then any issue that impacts one or more in ten will be picked up in your survey.  If you regularly survey your customers, then the chances of missing a significant issue is very unlikely.

Expert Tip:  Aim for a sample size that is within budget and one that you can repeat to ensure that you maximise insight ROI.

For a relationship customer survey, a rule-of-thumb is at least n=75 for the smallest customer group you want to analyse.  If you don’t know the groups you will analyse and their relative size, then aim for n=700 customers or 10% to 25% of customer base.  Small sample sizes of n=25 for a segment are likely to still provide reliable results for business-to-business customer research.  Business customers tend to give more detailed responses when there is an issue and are less forgiving if you ask them to do another survey without fixing a problem.

Response rates can vary greatly and depend on your service’s relevance to a customer.  For some of our surveys, response rates can be up to 80%, while for others, they are around 5%.  When I don’t have any response rate benchmark among your customers, I use 15% as a guide.


How to engage customers to have them complete your research?

How you engage your customers to complete your customer research is closely linked to when you should contact them.  The ideal time to engage with your customers is when they want to engage with you.  For transaction customer research, the best time to contact them is shortly after they have used your services.  For relationship customer research this when they are considering you.

How you contact your customers will greatly depend on what customer contact details you have readily available.  Some of the common ways to invite customers to complete a survey include:

  • Email invitation
  • SMS message
  • Chatbot link
  • QR code
  • Voice-activated
  • Website link


For transaction surveys, the surveys are often triggered by customer software and frequently use either email or SMS.  Email is the best way to engage customers with relationship customer surveys.  Email allows business branding, advanced campaign management, advanced notification, and reminder notices that show customers you want their feedback and for them to seriously consider the service and their relationship with you.

When contacting customers by email, personalise the communication by referring to the person or team they have their most recent type of contact shown.

Chatbot and website, including pop-ups, are interruptive and yield few responses and limited detail.  We suggest linking people to a survey site to increase the quality of answers rather than keeping the survey in the chatbot for both of these approaches.  QR codes can be used effectively in retail or places where you do not have customer contact details.

When deciding on what type of survey, keep in mind what kind of device a person is most likely to use and where they will be completing the survey.  In business-to-business surveys, many people who have customer-facing roles complete their survey with a mobile device between servicing their clients.

Expert Tip:  Make giving you their feedback easy and enjoyable for customers.


What do you want to know about a customer’s experience?

You know why you want to do customer research, which customers you need to understand, how you will use the results and what options are available to you for engaging with your customers.  Now we need to determine what to ask your customers to uncover the insights that you need.

Think of a questionnaire as a structured conversation and a survey as a way of having consistent conversations with many people.

A helpful approach to structuring your questions – creating a logical order for the reader – I like to use a pyramid structure that starts from the specific and move to the more general and abstract.  This would broadly mean asking your customers about what they experienced and how they felt about that experience, suggested improvements, and who they are.  By mapping the customer journey from beginning to end and how it relates to how your business delivers each stage of their experience, you will have a clear idea of what areas to cover.

In relationship customer surveys, an inverse pyramid can be more helpful and engaging for customers.  Start with broad relationship questions, then go specific.

Expert Tip:  Make answering your questions easy.  Make your questions relate to a customer experience.

Part of understanding the customer journey is understanding whether a customer is engaging with you for the first time, returning customers, or an ongoing customer.  This understanding may be something you have on your customer file, or you may need to capture it within your survey.

Another approach we use to design our customer research is to determine the key question and how we can explain changes in that area.  In maths, this is referred to as measuring the dependent (key question) and independents (explaining questions) variables.  We refer to these as our ‘outcome’ measures and ‘moderator’ measures in the social sciences.  Some overall judgments like behaviour or intentions, can operate through other experiences.  These other experiences are called ‘mediators’.  For example, service satisfaction (mediator) predicts future behaviour (outcome) but its impact upon by their ability to change providers (moderator).  Ideally, each of the experiences that you measure in your customer research are moderators of their overall experience.

Keep an eye on survey length.

If your questionnaire is becoming too long, consider having a modular approach.  With a modular approach, you can periodically measure specific areas or randomise them so that customers answer different sets of questions.  For example, in your survey, you may want to ask about a new product idea or uncover customers’ preferred way of receiving communication from a business.

Warning:  If you ask generic questions, you are likely to get generic answers.


How do you profile your customers?

Knowing who your customers are is a basic level of insight needed by businesses.  Customer research provides an ideal place to uncover who your customers are to develop your marketing to attract similar people or design strategies that move beyond your existing customer base.  Knowing who your customers are also helps with understanding their service experience.

By tracking who your new customers are in your customer surveys, your business can also track with whom your strategies are appealing and predict how your customer base will change over time.  Trends in customer profiles can have large impact of business growth and customer expectations.  Tracking research for a content publisher showed their customer base was rapidly aging and becoming dominated by females.  During our research we discovered the reason for the rapidly changing customer profile was not the content by their media placement.  By understanding the trend, our client was able to create content that was more appealing to the segment but also develop strategies that targeted younger customers.

Expert Tip:  If you have customer profile information on your system, consider having this included rather than asking customer to you what you already know.  

Some of the main ways of understanding who your customers are include:

  • Personal Characteristics. Demographics or business profile for business customers.
  • Company Relationship. Time as a customer, products used and use of competitors or other related providers.
  • Category Relationship. Recency and frequency of buying or service use.


See our article on how to do market segmentation

Regardless of what approach you use to define your customers, how you define them should reflect the characteristics that impact their buying behaviour and how they use your service.  Only collect what you need to know.  Remember customers are volunteering their time to help you, with the hope that their feedback will improve the service their receive.  They are not obliged to give you personal details and they will stop helping you if they feel what you are asking is irrelevant.


How should you report your results and engage your team?

Your customer research should be part of a broader business improvement and strategy development programme.  Customer teams should have easy and quick access to customer feedback, especially results from transactional customer surveys.  While results from customer relationship studies should be available across the business, helping to ensure customer insights play a central role in day-to-day decision making.

The reporting approach your business needs should reflect your business model, ensuring teams get the results they need and when they need the results, and that your customer research has high visibility within the business.

Expert Tip:  Tailor your reporting needs to keep your business engaged with customers.    

Shown below are the types of reporting we often provide clients.  Not all reporting options would be needed by every organisation.  By understanding how your team will use the results, you can implement the approaches that best suit your needs.  For some clients, speed of access that is accessible to a wide range of staff is critical, for others less frequent and deeper analysis is needed to ensure results are acted upon.

  • Live Reporting. For transaction and relationship tracking studies, live reporting shows customer responses as they are completed.  These reports can help you quickly see the impact of events or service changes on customers.
  • Performance Reporting. Executive and board level reports that give top-line trends and key outcomes, that include what actions the business has taken.
  • Red Flag. Sometimes customers want action taken about a specific issue they raised in the research.  Red Flag reporting uses automatic notification of a customer issue.  Customers can choose to have their personal details shared with a company if they want to be contacted.
  • Interactive Reporting. When you have multiple markets, products, segments or just want a way to easily see results for different groups, interactive dashboard reporting can greatly improve you and your team’s ability to find what they need and uncover critical insights.
  • Feedback Comment Reporting. To act on customer feedback, we often provide the comments made by customers in a live feed or in a separate report.  These reports provide teams an engaging way to interact with the research and uncover ways to proactively improve customer service.
  • Analysis Reporting. Analysis reporting looks deeply at results to understand what is driving higher and lower satisfaction, customer attrition, and other behaviour.  This type of reporting is done quarterly to annually, with the frequency of analysis reflecting the amount of change customers are facing and your strategy planning cycles.


Whichever reporting approaches you use, you should act upon all research to provide value to your business.  With transaction customer research we recommend using regular team workshops to review results and feedback, while for relationship customer research workshopping the results with your teams will ensure that your customer research has visibility and is acted upon.

Expert Tip:  Determine if your research users are looking for insights to improve strategy and systems or feedback to solve specific customer problems.    


What next?

Understanding your customer and their experience with your business is one of the most important aspects of staying in business and growing a business.  Leading businesses embed this understanding by regularly undertaking customer research.  To embed customer research into your business, your first step is to use this guide to better understand your needs. If you are looking for help with how you can get market research to deliver the insights you need. contact our team or call us on 0404 707 752.