Market Research vs Consumer Insights: What’s the Difference and When to Use Each

Understanding your target audience is crucial for any business But with so many options for learning about customers, it can get confusing. Should you conduct market research or gather consumer insights? What’s the difference, and when should you use each?

I’ll clarify the distinct purposes of market research and consumer insights. I’ll also give tips on when to use each method to get the knowledge you need to make smart business decisions.

Defining Market Research and Consumer Insights

First let’s define both terms.

Market research involves gathering data and information about an overall market. The goal is getting an objective, high-level view of marketplace conditions, competitors, trends, and more.

Some common market research goals include:

• Estimating market size or demand
• Identifying customer demographics
• Discovering competitors
• Uncovering gaps, opportunities, or needs in a market

Consumer insights provide a more focused, subjective view. The goal is understanding customers’ or potential customers’ perceptions, motivations, feelings, needs, and decision-making processes.

Some common consumer insight goals include:

• Learning why customers choose certain products/brands
• Discovering customer pain points
• Gauging brand sentiment
• Identifying customer needs and preferences

While market research provides a wide angle view of a market, consumer insights offer a zoomed-in picture of the people within that market.

Key Differences Between Market Research and Consumer Insights

Beyond the core definitions, there are some other key differences between market research and consumer insights:

• Purpose – Market research aims to size up markets and analyze trends. Consumer insights help understand customers.

• Scope – Market research looks at markets broadly. Consumer insights focus on existing/potential customers.

• Data – Market research uses more quantitative data like statistics. Consumer insights leverage more qualitative data from customer feedback.

• Methods – Market research relies on surveys, third-party data, etc. Consumer insights extract info from reviews, social media, surveys, etc.

• Perspective – Market research takes a outsider view of markets. Consumer insights provide an insider look at customers.

• Frequency – Market research is periodic to check in on markets. Consumer insights should be an ongoing practice.

• Market research = external view of marketplace conditions
• Consumer insights = internal view of customer thinking

Both yield critical intel, but serve different purposes.

When to Use Market Research vs. Consumer Insights

Market research and consumer insights can work hand-in-hand to guide business strategy. Here are some best practices on when to use each method:

Use Market Research To:

• Evaluate new market opportunities – Research market size, competition, trends, and potential before expanding into a new region or industry.

• Minimize risk of new launches – Research demand for a potential new product, optimum pricing, competitive landscape, and more prior to launching.

• Determine market segmentation – Analyze demographics, behaviors, needs, etc. to divide markets into targetable segments.

• Set competitive benchmarking – Research competitor market share, sales, pricing, products, etc. to compare against.

• Track market trends – Monitor market changes like shifts in demand, new technologies, regulatory impacts, etc. that may impact business.

Use Consumer Insights To:

• Enhance marketing messaging – Learn what messaging resonates most with different customer segments.

• Improve products/services – Identify customer pain points and unmet needs to fuel innovation and improvements.

• Refine customer targeting – Discover customer demographics, psychographics, interests, pain points, and more to fine-tune targeting.

• Identify upsell opportunities– Determine what extra products/services customers want that you can provide.

• Prevent customer churn – Detect when customers are at risk of leaving and why so you can re-engage them.

• Boost customer satisfaction – Learn about the customer experience to remove friction points and exceed expectations.

• Inform sales pitches – Discover what motivates customers to buy certain products/services to refine sales.

• Personalize marketing – Gather insights into customers’ preferences and interests to personalize messaging and offers.

Use Both To:

• Guide product development – Market research indicates gaps in a market; consumer insights identify what customers want in new products.

• Optimize pricing – Market research benchmarks competitive pricing; consumer insights reveal what price points customers will accept.

• Select business locations – Market research analyzes areas’ demographics, competition, etc.; consumer insights show where target customers live/work.

• Identify partnerships – Market research finds industry leaders; consumer insights reveal potential partners customers trust.

• Minimize risk – Market research reduces risk through data analysis; consumer insights ensure you build what customers want.

Gathering Impactful Market Research vs. Consumer Insights

Now that you know when to apply market research vs. consumer insights, here are some tips to get the most impactful intel through each method:

For Market Research:

• Combine primary and secondary research – Primary (your own data collection) and secondary research (existing data) gives comprehensive insights.

• Define your objectives – Ask specific questions to keep market research focused and actionable.

• Segment your target market – Isolate the segment(s) you want to reach so data is applicable.

• Monitor trends over time – Ongoing monitoring lets you spot shifts as markets evolve.

• Use multiple data sources – Blend third-party data, surveys, interviews, etc. for a complete picture.

For Consumer Insights:

• Talk to customers directly – Surveys, interviews, and focus groups yield candid customer perspectives.

• Mine your own data – Customer profiles, purchases, engagement metrics, and more provide rich insights.

• Monitor online conversations – Social media, reviews, forums, etc. offer transparent customer opinions.

• Analyze across customer touchpoints – Website analytics, call center logs, surveys etc. connect insights across touchpoints.

• Segment your customers – Isolate groups by behavior, demographics, psychographics, etc. to get targeted insights.

Combining Approaches for Powerful Business Intelligence

Like two eyes giving you more dimensional vision, market research and consumer insights combine to create a 3D view of your business landscape.

Market research helps you identify opportunities and gaps in the broader marketplace. Consumer insights ensure you capitalize on those opportunities in a way that aligns with customer needs and preferences.

When used together consistently, both equip you with the actionable intelligence to minimize risk and maximize results across your marketing, product development, operations and more.

So don’t limit yourself to just one perspective or the other. Tap into both market research and consumer insights as core components of your business strategy. Let data guide you, but never lose sight of the all-important human element.

Key Takeaways:

• Market research gathers data on market conditions, trends, competitors, etc. Consumer insights reveal customer thinking and behaviors.

• Market research takes a wide view of markets. Consumer insights offer a close-up of target customers.

• Use market research to assess markets and segmentation. Use consumer insights to refine products, marketing, and experiences.

• Gather market research through surveys, third-party data, etc. Get consumer insights through customer feedback channels and internal data.

• Combining market research and consumer insights creates a multi-dimensional view to inform strategic decisions.