Marketing used to be (at least in part) a luck-driven game. You knew your audience and wanted them to react to the messaging you sent them. Unfortunately, this yielded marketing collateral that didn’t necessarily entice target audiences in the way a company expected. In the modern world, marketing isn’t the luck-based art form it once was; it’s now powered and backed by a data-driven approach to making profitable decisions. Market research is one of those solutions that drives growth through a better understanding of an audience. And it is no longer a luxury afforded only by enterprise companies—it’s a tool every company needs to achieve success. Once equipped with the information market research generates, any company can find the products, messaging and marketing campaigns that elicit the awareness and sales the organization needs to thrive and reach its business goals.
There are multiple methods and strategies to achieve helpful market research, and the one that best suits your organization depends entirely on the sector and industry. Beyond understanding the basic demographic makeup of your target audience, market research is vital to identifying market trends, better understanding your core customers, and assisting in achieving core initiatives and goals. In addition, investing in market research maintains a customer-centric approach that ensures the decisions you and your executive team make are informed and driven by actionable insights.
One of the most universally applicable market-research methodologies is the net promoter score, which is typically garnered by having consumers answer one straightforward question: “On a scale of 1-10, how likely are you to recommend this brand to a friend or colleague?” A net promoter score metric informs you of your overall customer experience quality, which is an informative method to quantify consumer sentiment based on a specific product, interaction or even an entire brand. The method forces you to place a numerical value on a subjective question, providing a unique insight into the psychological association between your company and the consumer. Consumers of your product or brand are then placed into three distinct categories based on their response to the question: promoters, passives and detractors, based on whether they were positive, neutral or negative toward the product or brand. By examining the ratio between these three categories, companies can determine the average consumer sentiment toward a brand, and that can be used to dictate decisions; budget allocations; and future marketing campaigns to sway, alter or maintain that sentiment.
Of course, like any other market-research strategy, some limitations impact the feasibility of an NPS. A notable limit is its inability to identify and act upon the driving factors that influence a consumer’s potential response. It offers no understanding as to why the consumer chose the score they did. Furthermore, it can be complicated to pinpoint why a person chose a specific score without follow-up or additional material—material a participant might not be willing to disclose or discuss. The vague strategy of reducing passives and detractors in your NPS is challenging to act upon and requires a focused and dedicated approach to evaluate current processes and then ideate solutions that potentially solve the perceived problems. Even without the limitation of easily applicable action, another limitation to an NPS is the inherent biases that make it virtually impossible to isolate a particular variable to evaluate. While the NPS question asked of consumers might be specific to a singular product, there is no way to guarantee the consumer’s score isn’t influenced by brand values, employee interaction or even the website design where the product was purchased. While this doesn’t mean a company should completely disregard an NPS, it does mean that the score should be treated as an approximation rather than an absolute in most instances.
That said, NPS is still a fantastic form of market research that can help guide and generate the data needed to make better decisions. Companies can better understand how to create interactions between prospects, customers and employees that lead to more conversions and sales. An NPS finding can be used to guide and help formulate ideas for new products and services. It can also maintain (or increase) customer retention by driving communication practices to support promoters and help sway passives and detractors to a more positive view of the brand. Whatever reason you choose to engage in NPS as a form of market research, it will set you on a path to making better data-driven decisions that best fit the needs of your organization.