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What is the difference between market research, consumer insights and behavioral insights?

Roy Bendor Cohen
March 9, 2021

If I told you that I knew what it would take to keep you reading, would you?

To truly know your audience or persuade an action on their behalf, it takes answering what and why they do what they do (or don’t do). In many businesses, it’s common to conflate the terms “market research” and “consumer insights,” but the two practices aren’t one in the same.

Here, we will briefly outline what you need to know about each term, as well as how behavioral insights can help bring about specific customer behaviors and go beyond what’s easily observable.

What is Market Research?

Market research is the systematic act of collecting and analyzing data to answer specific questions. This data, which is mostly quantitative, is used by marketing teams and focuses on answering the “what” behind market sizes, competition, customers and market needs, and the like.

While research exists in massive amounts, actionable insights are harder to come by.

What are Consumer Insights?

Consumer insights is the practice of deriving insights from data to make business-decisions. While consumer insights do sometimes address “why” customers do what they do, it’s mostly focused on their purchasing behaviors. The practice positions data as a story or narrative.

Consumer insights offer information that can transform into actions. These insights can help to resolve situations like high customer churn, boost customer satisfaction, and overall, increase your bottom line.

What are Behavioral Insights?

So far, all the applications for data have been focused around answering “What happened?” But, imagine what could be accomplished when you know why customers do what they do. Behavioral insights move beyond consumer insights to understand human behavior within different contexts.

The OECD defines behavioral insights as, “An inductive approach to policy making that combines insights from psychology, cognitive science, and social science with empirically-tested results to discover how humans actually make choices.” While the definition clearly spells out policy making, behavioral insights can actually be applied in any type of business or industry. To illustrate, they’ve been used to answer why people don’t save for pensions, why people stop their diets mid-way, why people turn away from a service, and so on and so forth.

Oftentimes, behavioral insights provide counterintuitive and surprising answers. For example, author and former Harvard professor Clayton Christensen conducted research for a fast food chain that was trying to boost sales of their milkshakes. They’d use customer feedback and evidence to enhance their milkshake flavors, but the milkshake sales didn’t increase as one would have expected.

What Christensen found through immense observation and data collection was that most customers were showing up for the milkshake before 8AM. So, the researchers reframed the question. Rather than asking, “What do the customers want to be different?” they asked, “What job arises in these customer’s lives that leads them to choose a milkshake at this time?” Hence, the focus on the reason behind the observable behavior. Turns out, most of the customers had long and boring commutes to work and were using the milkshake as a way to liven up their drive. It’s also a product that could last long enough to satiate their inevitable hunger.

The Past and Present of Behavioral Insights

So, where did behavioral insights come from? The term and practice came to be after Nobel Prize winner Richard Thaler and legal scholar Cass Sunstein published their book entitled Nudge: Improving Decisions About Health, Wealth, and Happiness in 2008. This book helped to serve as the mainstream world’s debut to behavioral economics. In 2010, the Behavioral Insights Team (BIT) was established in the United Kingdom as the first nudge unit.

Behavioral insights teams have created ways to direct people to take the optimal path based on Choice Architecture - the way options are designed and presented to customers - along with interventions from behavioral science literature.

What We Do at Q Behavioral Thinking

we look to behavioral insights to help solve business problems. But, we elicit behavioral insights in a different manner. What sets us apart is our interdisciplinary approach.

We bring together a team of experts in their respective fields (social psychology, service design, data science, behavioral economics, etc.) to help ask the right questions, answer them through research and provide insights that achieve desired results.

Made it all the way to the end?

Let’s open the door to new beginnigs.

Ask us anything.
We’re in the business of finding answers!

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