Exploring the Impact of External Factors

THE SITUATION:

72% of consumers say that external factors such as inflation, social movements, and climate change are impacting their lives more than in the past.

(Source: Accenture, 2023)

THE OPPORTUNITY:

In the ever-changing landscape of consumer behavior, it’s important to explore and understand the varied factors that influence purchasing decisions through market research and customer feedback initiatives. However, it’s easy to fall into the trap of staying narrowly focused on immediate concerns such as product preferences and customer satisfaction. Of course, these are integral parts of market research initiatives. But they are only pieces of the broader puzzle.

The key is expanding the scope of market research to include external factors and indirect influences, which presents a significant opportunity for businesses. By understanding the broader context of consumers’ lives, companies can develop more effective marketing strategies, innovate more relevant products, and improve customer engagement.

While the external factors listed in The Situation may not be surprising or new, the stat itself raises questions about how the rising impact of those factors is influencing your specific customers and brand category. It’s about getting to know the whole person, their surrounding environment, and where/how your brand fits into their bigger picture. In doing so, businesses can seize the opportunity to understand and connect with customers in deeper and more meaningful ways.

THE CHALLENGE:

While the benefits of understanding external influences on consumer behavior are clear, a significant challenge lies in effectively gathering and interpreting this information. External factors are often dynamic and multifaceted, making it difficult to isolate their impact on purchasing decisions. Moreover, the sheer volume of data available can be overwhelming, requiring a strategic mindset and analytical expertise to distill actionable insights.

Another challenge is ensuring the relevance and accuracy of market research data collected. External factors can vary significantly across different regions and demographics, necessitating a granular approach to market research. Businesses must invest in targeted and strategic research efforts to capture the specific influences affecting their primary audiences. This requires not only financial investment but also a commitment to ongoing data collection and analysis to stay current with trends and changes.

THE SOLUTION:

To effectively leverage market research for understanding external factors influencing buying behaviors, businesses can (and should) adopt a multi-faceted approach. When done effectively, market research provides a window into the external world that shapes and influence customers’ thoughts, feelings, and behaviors, enabling companies to make informed decisions and stay competitive in their ever-changing marketplace.

One of the foundational elements of maximizing the impact of market research and exploring the influence of external factors on consumer behavior is developing a holistic customer insights strategy. This ultimately serves as an overarching framework that guides individual projects to ensure they stay goal-oriented and interconnected. A key benefit of this approach is how each market research project plays off the others; digging deeper as new insights come in, and ensuring each new project builds in value as time moves forward. Furthermore, with regards to external factors influencing consumer behavior, taking a strategic approach will help identify the most relevant and meaningful insights to gather. It will establish guardrails and guidelines for pursuing actionable insights, rather than choosing topics based on assumptions and hoping for the best.

For those interested in developing a holistic customer insights strategy, here are a few things to consider that will boost your efforts:

Conducting multiple surveys does not constitute a Customer Insights Strategy.

Many brands blur the line between having a series of individual research projects and building a holistic insights strategy. Often, clients bring us in to refine or polish their Insights Strategy, but we find a series of individual research projects that are missing cohesion and alignment. This is not to diminish or discredit their efforts, but rather it is an honest assessment of where things stand regarding their customer feedback approach.

Without an overarching framework connecting the varied pieces, individual projects can start producing fragmented and siloed data sets. This is especially important when exploring the external factors shaping consumer behaviors. With so many topics and angles to consider, it’s easy to get lost in the mix. An insights strategy sets the stage for individual projects to be targeted and focused from the onset, to build upon the past efforts, and fill specific insights gaps.

The most effective Customer Insights Strategies are clean and simple.

A common misunderstanding is that insights strategies need to be complex and complicated to be effective. In fact, it’s quite the opposite. That said, it can be challenging to boil down and simplify broad, wide-ranging objectives such as understanding the influence of external factors. The goal is to map a clear plan of action based on specific, measurable objectives. By identifying and trimming efforts that are not inching you closer to your goals, we maximize efficiency and redirect energy toward results-oriented projects. When everyone can visualize and understand how one step leads to the next, then the results application process will be efficient and effective.

Incorporate secondary research as part of the strategic process.

There is A TON of information that already exists. Whether it’s industry articles, third-party consumer studies, or market trends reports, why not incorporate the work of others to accelerate your own progress? Secondary research can serve as a valuable tool for uncovering and identifying key trends and external factors that may be influencing your customers. Using these existing resources as a starting point, you can then pursue your own research projects to explore the most relevant topics on a deeper level.

Increase cross-departmental value by involving all relevant stakeholders.

Once strategic development efforts are underway, loop in the people and departments that will benefit from your current and future customer insights. Ask for their input on whether your objectives and action plans are relevant to their short and long-term goals. If they are, then you can move forward with confidence knowing your project outcomes will add value across your organization. If they are not in alignment with the needs of other team members or departments, you can go back and refine your purpose to better fit organizational objectives.

This step is often bypassed to avoid having “too many cooks in the kitchen.” A fully understandable concern. But taking a structured, focused approach will help ensure stakeholder discussions add strategic value rather than further complicating or prolonging the process. Ask for input on specific details to refine your approach, not brainstorming new project ideas or looking to overhaul the entire strategy. In addition to tightening the screws, involving relevant stakeholders in this way will help them feel included and will help get their buy-in ahead of time. After all, the true value of customer insights is found when they are applied in real-world business scenarios. So, by having cross-departmental approval and endorsement your customer insights projects are more likely to have a meaningful impact.

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HOW WE CAN HELP:

The suggestions listed above are just a few elements of developing a holistic customer insights strategy. There are plenty more tips and advice to share, which is why we started offering Research Strategy Workshops that help brands strengthen their data-driven efforts. Each workshop caters to the unique goals, needs, and challenges faced by our partner brands, and they provide a collaborative environment where everyone has a voice. We walk through the end-to-end strategic development process and leave participants with not only a better understanding of the core principles, but together we also outline a strategic framework that will have an immediate impact.

To learn more about our Research Strategy Workshops, click here.

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YOUR TURN:

I’d love to see your thoughts and comments about strategic customer insights. Are you considering and incorporating the influence of external factors when exploring consumer behaviors? Do you currently have – or are you building – a holistic customer insights strategy? If so, do you have any tips or advice for someone just getting started?

By sharing your thoughts, ideas, and suggestions, we’ll foster a collaborative community where actionable insights are the foundation and collective success is the outcome.

Do you have a stat, trend, or topic you’d like me to write about? Send me a message or share it in the comments. I’ll add it to my ideas list!