What is a customer perception analysis?
Customer perception analysis in business is the process of measuring and understanding what people think about your brand, business concept, or products. This analysis is an important part of a marketing strategy, as the results provide clear indications regarding how to optimize branding and marketing communications.
Preparing your analysis
To conduct a customer perception analysis, collecting feedback from potential customers will be required. Relying on first-hand data is highly recommended, as collecting data yourself will generate significantly more reliable and relevant results.
The quality and value of the analysis rely on the following three factors:
- Questions you ask from your respondents
- Number of respondents
- Quality of responses
When planning your analysis, the first thing is to define what you would like to receive answers about? You can ask anything from your target respondents, but to receive quality answers, prepare questions that people can answer instantly.
Few examples of good questions:
- Do you like this company?
- Do you think this company is better or worse compared to similar companies?
- Would you pay for the products of this company?
Few examples of bad questions:
- What do you think about this company?
- Why is this company better than similar companies?
- Which product from this company is your favorite?
How to get quality responses from your customers
You might wonder what makes a good response? In a nutshell, quality responses reflect the actual opinion of your respondents. Good answers start with good questions. It is crucial to ask straightforward questions that one can answer precisely. Open-ended questions are not a good practice when doing market research. The best form response options are single choice, multiple-choice, or drop-down. Should you use free-form text input boxes, make sure that your questions will not require long and elaborate answers. Lengthy responses are likely to make the information processing procedure more complicated.
The number of responses should be 1,000 at least. The size of your research can depend on your industry, but the more feedback you can collect from relevant in-market customers, the better your customer perception audit will become.
In the case of B2C customer perception audits, we recommend collecting a large number of responses, in the range of 5,000–10,000.
For companies in B2B, or very specialized niche markets, it is difficult to obtain volumes of quality responses. In those segments, going for high-quality but very precisely targeted market research is preferred.
Similarities between brand audits and customer perception analysis
The concept of customer perception analysis is very similar to brand audits in many ways. Both procedures aim to measure the public opinion about a company, products, or services. The major difference between brand audits and customer perception analysis is the approach of data collection.
Brand audits can be done in-house, can be done by an expert, or multiple experts, or in the best case done with market research tools. Meanwhile, customer perception analysis can be only carried out by asking in-market customers and summarizing their feedback into insightful reports.
The risk of not doing customer perception audits
Unfortunately, it is very common among startups and small medium-sized companies to not engage in feedback collection. There are various reasons behind this, typically that the management team does not want to get their initial concepts busted.
Fist time entrepreneurs, small businesses, and especially family businesses tend to take feedback too personally, thus they avoid receiving feedback that they might not like. Another common reason small businesses avoiding customer brand audits and customer perception analysis is they are not ready to make changes.
In case of medium businesses, where a marketing department is present, it is quite often the marketing team that
In the case of medium businesses, where a marketing department is present, it is quite often the marketing team who is voting against doing such audits. Similar to family businesses, they prefer to avoid any feedback that might undermine their ideas and approaches to marketing. This is a very dangerous condition, as companies in this situation are likely to lose ground and become less relevant or exciting for potential customers.
Putting it simply, managing a business without knowing what customers think about the company is like driving at night without the headlights on. There is a substantial risk of becoming irrelevant, missing out on brand and marketing communication trends, and losing the sympathy of past, present, or future customers.