Marketing 101: Developing Your Consumer Insight Part 1

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Marketing 101: Developing Your Consumer Insight Part 1
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Branding is a powerful marketing tool that creates an emotional connection between you and your customers, for the purpose of increasing repeat business and decreasing price sensitivity.

Please read Marketing 101:  What is Branding? to give you an introduction to branding before you start reading about how to do branding.

To review, branding is a powerful marketing tool that is appropriate for when you...

  1. Owns the rights.
  2. Wants to create long term consumer loyalty (read future sales that cost less to create).
  3. Is willing to do the hard thinking and work necessary.
  4. Is obsessive-compulsive about using every single consumer interaction to further that branding.
  5. Asks how the consumer wants to feel.

So... How Do Customers Want to Feel? 

The purpose of this guide is to help you find the answer to this most important question.  Having insight into your customers and creating the right emotional connection will make or break your branding efforts

Approach this question carefully and do not assume you know anything about your customers.  You need to keep an open mind and be willing to brainstorm (read "you are not allowed to critique any ideas").  You'll have plenty of time for critique at the end of this process.

I don't say this to scare you, but this process is the hardest work in your entire branding effort.  Take your time.  If you do the hard work now, everything else will fall into place far more easily.


Are You Ready?

This is the second guide in a series I will be writing over six weeks, called Marketing 101.  Because this is the most important topic in branding, I've had to split this guide into two parts, Part 1 and Part 2.

I strongly recommend you start by reading the first guide, Marketing 101:  What is Branding?, which will give you a basic introduction to branding.

Today's guide will help you develop your consumer insight, which will be the foundation of all of your marketing and branding efforts!  You do not want to skip this step!

These Guides will follow, to teach you practical ways to do the "How" of branding:

How to Choose Your Brand Name

Creating a Logo for Your Brand

The Key to Branding - Vigilance in Application

The Art and Science of Creating Labels for Your Products

Creating an Effective Flyer or Print Ad for Your Brand

Creating an Effective Brochure for Your Brand

Working with Advertising Agencies

I will write additional guides based on requests from you, so please let me know if there is another topic in branding you'd like to see covered!  My ebay ID is FreedomforHealth.



I will be using two different examples throughout these guides that happen to be brands I created.  That way I know I am not infringing on any rights or revealing trade secrets that do not belong to me.  Both of these brands are still works in process, which makes them excellent case studies.  One brand is in the health and beauty category, the other is in the jewelry category.

Step One:  Observe Consumer Behavior

You first step is to get a good look at how your consumers behave.  Later on you will consider why consumers behave as they do.  Right now you just want to observe.

Be prepared to be surprised.  Consumers don't behave like we think they aught to.  It's not that consumers are wrong, it's just that they don't deliberately think about and ponder (overthink?) every detail like we do.  That's why I encourage an open mind.  Just record what you see and hear.  At this point you don't know which observations are most important, and you don't need to.  So take notes on as much as you can, and do not assume you will remember without writing it down.

First, identify your competitors (products and services).

Think about competitors in a much broader context than you usually do.  What is the basic customer need?  For example:  hunger.  If you are a grocery store, McDonald's is just as much a competitor as another grocery store.  Both are valid choices when faced with "what do I want to eat."  Make a list of competitors, being as specific as possible.

Example One:  Aromatherapy

In this first example, you offer consumers a variety of aromatherapy products.  These products happen to be made with therapeutic grade essential oils and all natural (non-animal and non-petroleum) ingredients.  They come in soaps, lotions, massage oils, candles, and the like.  The basic customers needs here are cleanliness, beauty, and alternative health care.

Competitive Choices for Customers:

  • Use nothing (not good when it comes to cleanliness)
  • Mass produced skin care products
  • Mass produced candles, incense sticks, and air fresheners (solids, electric, diffusers, oils, etc.)
  • Aromatic laundry soap
  • Perfume
  • Designer products
  • Homemade products
  • Boutique products
  • Spas
  • Mass produced over the counter medications
  • The entire medical establishment
  • Other forms of alternative health care, including chiropractic, naturopathic, homeopathic, herbal, supplemental (vitamins, minerals, etc.), health care diets (organic, whole foods, raw foods, etc.), accupuncture, massage, etc.

This is quite a list, and for brevity it is not exhaustive or specific enough.  For instance, I must identify the mass produced beauty care products (Oil of Olay, Noxzema, Clean & Clear, the entire soap aisle, Mary Kay, Yankee Candle, etc.), the boutique products (Bath & Body Works, department store brands, etc.), the designer brands (Calvin Klein, etc.), etc.

Second, observe people at key points in the decision and use processes.

For your product/service and those of your competitors, when and where do customers tend to realize they have a basic need to meet?  If you can, watch them!  Observation is the most powerful tool you have (the second most powerful tool is taking good notes on what you observe!).  Watching people is a public sport, so don't hesitate to plunk yourself down in a public location and observe for a few hours.  Write down everything about their behavior that you can.  Don't speculate as to why they are behaving that way.

Have friends and family?  Catch them in the action and take notes without explaining why!  If you explain yourself they will be more self-cautious and they will make everything unusually rational (because all the sudden they are thinking too much about what they are doing and what you think of them while they are doing it).

While friends and family are not representative of the general population, they do allow you to observe in more intimate and private moments.  If you have a market research budget, consider in-home studies, questionnaires, and other rigorous consumer research methods.  There is an incredible art and science to doing market research right, and I strongly encourage either hiring an expert or using a market research company.

I am used to very large (tens of millions of dollars) market research budgets and using highly skilled professional researchers.  This guide is written, however, for the average small business owner.  The examples of my aromatherapy and jewelry brands are based on my actual small business owner budget ($0).

Example Two:  Jewelry

In this second example, you offer consumers a variety of beaded and gemstone jewelry, both custom design and artisan design.  Typical materials include Czech glass beads, Swarovski crystals, gemstone chips/nuggets/beads, sterling silver, etc.  The basic customer need here is the desire to adorn oneself (remember, right now we don't care why the customer needs it). 

A short list of competitors is using nothing, homemade items, tattoos and other body art, cheap bangles and jewelry, designer jewelry (usually mass produced), artisan jewelry (more often one-of-a-kind pieces), clothing, makeup, jewelry store jewelry, etc.

When and where do people decide they have a need?  A couple of examples are when they buy a new outfit (what goes with this...?) and when they plan for special events and gifts (proms, weddings, birthdays, gift giving holidays, etc.).  Spontaneous purchases happen when hanging out at the mall (a favorite sport of teenagers) or whenever something catches a person's eye ("point-of-purchase" sales, where a person sees it, it sparks a want, and the person buys it right away).

Now, I'll admit that I hate shopping and I hate browsing even more.  But, I do want my jewelry to be a business success, so I will dutifully set aside time to watch people in the mall (in clothing, jewelry, and bangle stores, or in general mall areas where people congregate and do show-and-tell with their friends of what they've bought).  I will browse and observe, promising myself ice cream to eat one minute after I've finished my pre-defined time period of observing.  I will go to clothing stores and sit outside the waiting rooms to watch people choosing new outfits and talking about "what will go with this...?"

Don't forget ebay!  Hunt around in forums, chats, and discussions and watch (without participating or asking questions).  Read "Want It Now" posts for clues to consumer behavior.

Now do all of this again, this time focusing on where and how consumers buy?  Yes, I mean watching people as they browse their choices.  For a product, do they touch their choices while deciding?  What do they do when they pick it up?  Feel it?  Smell it?  Read something on the package?  How do they react (watch their face)?  What mannerisms do they show when they reject an item they picked up?  When they keep it?  How long do they browse?  How many options to they consider?  Who is with them?  Are they helping or hindering the process?  How are they participating?  Does anything else define the shopping experience?

If you offer services, a good place to start is observing what potential new clients say and do when they first contact you.  What questions do they ask?  Are they nervous?  If they explain anything, take notes!  You may very well find gems of insight when you review your notes later on in this whole process.

Go back again a third time, and this time focus on when the customer is actually using the product or service.  How do they interact with the product or service?  Do they enjoy it?  Do they endure it as a necessary evil?  How often do they use it?  How involved are they when they use it?  When do they use it, where do they use it?  Go back to all your (now) familiar observation haunts plus use-specific places and take notes.

Example Two:  Jewelry

Are your children old enough to be going to events where jewelry and other adornments are worn?  In addition to watching people when and wherever they wear jewelry publicly, create opportunities for you to see what people do when they are wearing jewelry.  For instance, volunteer to chaperone school dances and proms, volunteer to help out at other events like bingo games (to catch older customers) and informal and formal parties (want to see the wealthy in action with their jewelry?  Volunteer to be a server at a high end charity auction or dinner).  Then observe (while you work)!

How, when, and where do people talk about their jewelry and the jewelry of others?  Write down any comments you hear.  While wearing their jewelry, do they touch it?  How often?  Do they play with it?  Does it look like a nervous habit or like they are trying to attract attention to themselves?

Third, keep observing in as many situations as you can with as many people as you can for at least a month, preferably two.

For at least a month, live, eat, and breathe observing people with respect to your own products or services and those of your competitors.  You do this for two key reasons:

    • To make sure you have enough observations across a variety of situations so that you can make general conclusions.  While you are NOT conducting rigorous market research that meets all the probability and statistics criteria for making general conclusions, you can at least obey the Law of Large Numbers - it takes at least 30 instances before you have enough information to draw any conclusions.  Whenever you have less than 30 instances, either go out and capture more observations (ex. 30 teenagers interacting at school dances or 30 people browsing in the soap aisle) or completely disregard that data.  With less than 30 instances there is too high a chance that you will be mislead.

      For those of you who like to play cards, I'll give you an illustration.  While in engineering school, we calculated out how many times you need to shuffle a deck of cards to be very sure you will end up with a random deck.  The answer is 7.  If you shuffle the deck with average methods (not just cutting the deck) 7 times, you have a 95% chance of ending up with a random deck. 

      The Law of Large Numbers is like this calculation - how many pieces of data do you need to be reasonably certain you have enough data to draw conclusions?  Please note that I am NOT taking into consideration whether or not your "samples" (people) were randomly chosen.  If you need that kind of confidence level with respect to your results, you need a market research budget, the appropriate experts, and far more than 30 instances.
    • You are also training your gut instinct and honing your observation skills.  You are investing in your ability to see patterns and connections, even though you do not need to do that until later in this process.


Feel free to read ahead to Part 2 of this guide.  Or wait until you have finished your observations!




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