What happens when you build a product or service around what you think potential customers want, only for them to buy something else? For starters, it shows you don’t know your customers well enough.

But worse than that, it leads to lower revenue, failed products, and plummeting customer loyalty.

According to Harvard Business Review, 80% of new products fail, primarily because companies fail to conduct proper customer research.

The solution seems obvious: improve your customer research process. But how?

This article will walk you through what customer research really is, from choosing your research methodology to recruiting participants, analyzing feedback, and beyond.

What is customer research in SaaS?

Customer research is the process of listening closely to your existing or potential customers to understand their needs, preferences, behaviors, and pain points.

For SaaS companies, this “listening” can take many forms to learn how users interact with their product and uncover areas for improvement. It could include conducting user interviews and surveys, analyzing product usage data, and tracking customer feedback, to name a few.

In action, customer research in SaaS could look something like examining support tickets to uncover recurring issues or feature requests, like consistent asks for better reporting features. This helps prioritize updates based on actual needs, not just assumptions.

Does customer research help build better products?

The short answer: yes.

The long answer: once you know what your customers want, you reduce the risk of product failure. Instead, you can build products with a better product-market fit that address all user demands and improve customer satisfaction.

However, because customer needs and market conditions are constantly evolving, customer research can’t be a one-time thing. For example, 71% of customers now expect far more personalization than before.

In light of these changes, research needs to be an ongoing process, integrated into every stage of the SaaS product lifecycle for continuous improvements and sustained growth.

Types of customer research for SaaS

There are two common customer research methods: primary and secondary research. However, within both these methods, there’s also the question of choosing between quantitative and qualitative research. Let’s explore each type in detail to see which is more suitable for your context.

Qualitative research

Qualitative research focuses on collecting and analyzing non-numerical, descriptive data. Such research helps you understand the “why” behind customer behaviors and opinions.

Examples of qualitative research methods include:

• Focus groups: Recruit a group of participants to discuss their opinions and feelings about a new product, service, or feature. E.g., to capture audience reactions to a new reporting feature and see whether users are clear on its functionality.
• User interviews: Conduct in-depth one-on-one conversations with customers for personal insights about a product or issue. E.g., interview new customers to understand how your SaaS solution fits into their workflow and tailor onboarding flows accordingly.
• Usability testing: Observe users as they interact with your product to identify usability issues and collect feedback on user experience. E.g., Identify navigation issues in your analytics dashboard based on real-time user interactions.

Quantitative research

Quantitative research is measurable and numerical, essential for making objective, data-driven decisions. It helps quantify customer behaviors on a larger scale to uncover user trends and correlations.

Examples of quantitative research include:

• Surveys: Collect structured data from a large audience to measure opinions or behaviors. E.g., gauge customer satisfaction by asking users to rate their satisfaction with your product on a scale of 1 to 10.
• A/B testing: Compare two versions of a product page, feature, or in-app element to see which performs better. E.g., Test different tooltip designs to find which gets more engagement.
• Analytics data: Track and analyze data on user behavior within your product, service, or webpage to identify patterns and drop-off points. E.g., use website analytics to measure how many visitors complete a checkout after clicking an ad.

Conduct customer research: A 6-step guide

Choosing between quantitative and qualitative data is only one aspect of starting your customer research. There’s an entire 6-step framework that comes into play to help you get the right data from the right audience using the right research methods.

1. Define your research objectives

Clearly outline your research goals and what you’re trying to learn by going down this path.

For example, are you trying to validate a new product idea? Maybe understand customer satisfaction with your current offering or identify areas for improvement in your user experience? Or, are you looking to understand customer behavior better and see how they use your product?

2. Use the jobs-to-be-done framework to create user personas

Creating user personas helps focus your research on specific user types and their needs, motivations, and pain points. This way, when it’s time to define your target audience (Step 3), you’ll have a clearer idea of who to engage with.

To create detailed personas, use the jobs-to-be-done framework to capture the underlying motivations and needs driving customers’ behaviors.

Suppose you learn that your new users’ primary job-to-be-done is “quickly onboarding.” So the goal is to save time and improve efficiency. But the tool’s complicated features make it harder to learn, resulting in slower onboarding.

These insights help build the user persona, providing information on user goals, motivations, and frustrations.

3. Identify your target audience

Once you have your personas, it becomes easier to identify the suitable audience, i.e., who you need to talk to.

To narrow down the list, consider factors such as demographics, user roles, product usage patterns, customer lifecycle stage, etc. This allows you to focus only on users whose behaviors and needs align with your research objectives, providing more relevant insights.

You can also automate audience identification by creating user segments in Userpilot, choosing between multiple filters and segmentation criteria. For example, you could segment by geography to track international adoption.

4. Choose the right research methods

Next, select the research methods that are most appropriate for your objectives and target audience.

But don’t just rely on one method since that can skew the results. For instance, solely focusing on surveys (quantitative data) might show high satisfaction but won’t explain why users feel that way or what you’re doing right.

Instead, adopt a mix of qualitative and quantitative methods to gain a comprehensive understanding of customer opinions.

Let’s go back to the goal of improving onboarding. So a mix of research methods would look something like conducting user interviews to understand onboarding abandonment reasons, and analyzing user behavior data in Userpilot to identify drop-off points.

5. Recruit participants

You need users willing to participate in your primary research and provide customer feedback.

This requires developing a plan for recruiting participants who represent your target audience. For greater responses, reach out to them through various channels, such as in-app, email, social media, or leveraging online panels.

For example, if you take the in-app route, try Userpilot to trigger in-app messages inviting users who match the criteria to participate in a user interview.

6. Gather and analyze data

Lastly, you need to collect data from your recruited participants using your chosen research methods.

But simply gathering data isn’t enough. To keep the data manageable, you also need to have a system of data organization in place, such as transcriptions, spreadsheets, qualitative analysis tools, etc.

Then, it’s time to analyze the data, such as interviews (qualitative) and surveys, and analytics (quantitative). Both data types require different analysis methods. For instance, qualitative data calls for content analysis or thematic coding, whereas quantitative data requires statistical methods.

Instead of using multiple analytics tools for each data type, find a platform that caters to both. Userpilot is one answer, offering data collection and analytics features for quantitative and qualitative data, along with a custom analytics dashboard for visualizing your unique data and responses.

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Customer research best practices

Effective customer research goes beyond just following the basic steps. There are finer nuances to it, like knowing what questions to ask, which community forum to keep an eye on, or how to uphold the ethics of data collection. That’s where these best practices come in to help further refine your research process.

1. Ask the “right” questions

The quality of your research responses will only be as good as the questions you ask. The “right” questions are engaging, unbiased, relevant to what you want to know, and allow space for deeper answers.

Here’s how to form better questions when interviewing or surveying users for research:

• Open-ended questions: Encourage participants to share their thoughts in their own words.
  E.g., ask “What feature would improve your experience?” instead of “Would you like to see new features added to the platform? (Yes/No).“
• Avoid leading questions: Keep your questions neutral so they don’t influence the responses. E.g., a neutral question sounds like “What do you think about the platform’s UI?” In contrast, a leading question is more like “Do you think the platform’s UI is difficult to use?“
• Focus on the “why”: Dig deeper into the motivations and reasons behind customer behavior and opinions. E.g., ask questions like “Why did you choose our platform over competitors?” or “Why did you stop using this feature?“

2. Gamify the customer research process

Gamification techniques work great for encouraging research participation and gathering more insightful data. In fact, research shows that gamification-based strategies can boost user engagement by up to 30%.

Here are some ways to add gamification to your customer research:

• Interactive quizzes and polls: Use interactive elements to gather opinions and preferences. For example, run a poll with multiple answer options asking, “Which factor matters most when picking an analytics tool?“
• Rewards and incentives: Offer small rewards or incentives for participating in research activities. For example, early access to new features for completing a feedback survey.

3. Maintain ethical standards

It’s important to uphold ethical guidelines and data privacy regulations throughout your research and data collection. This builds user trust, protects their rights, and prevents any misuse of personal data. Here are some ways to do that:

• Obtain informed consent: Tell participants the purpose of the research and how their data will be used to maintain transparency and build trust.
• Protect privacy: Anonymize data and take steps to protect participant confidentiality.
• Be transparent: Be open and honest about your research methods and findings.
• Ensure legal compliance: Obtain security certifications, like SOC2 Type II, and ensure industry-relevant compliance, such as with GDPR or HIPAA, all of which Userpilot’s security standards provide.

4. Embrace continuous iteration

Continuously improve your customer research process to drive relevant product innovation. Here’s how:

• Stay updated on industry trends: Conduct market research to keep learning about what’s new in your space. Regularly read industry blogs, research reports, and news websites, like Statista, Nielsen, or Gartner. Use tools like Google Alerts to automatically track mentions of key topics or competitors in your industry.
• Experiment and iterate: Don’t be afraid to try new approaches and adapt your research strategies based on your learning. Start small, testing low-risk changes in your research process. For example, try experimenting with different survey formats, like multiple-choice vs. open-ended. Track the results and see what works best for your objectives.

5. Leverage unconventional feedback channels

Companies primarily focus on user surveys and interviews because they’re easier to execute. But for deeper customer insights, go beyond these and explore more creative ways to gather feedback. These can include:

• Social media listening: Monitor social media conversations to understand customer sentiment and identify trends. Use tools like Hootsuite or Brandwatch to track mentions of your brand or key topics across platforms like Twitter, Facebook, and Instagram.
• Online communities and forums: Engage in relevant online communities to gather insights and feedback. Participate in forums such as Reddit, Quora, and specialized industry forums like Stack Exchange for tech-related topics.
• Customer support interactions: Look for recurring questions and feature requests to discover common pain points.
• App store and community forum reviews: Pay close attention to app store reviews to understand user feedback and identify areas for improvement. Also, check credible SaaS review sites like G2 and Capterra to see what users are saying.

6. Use the right customer research tools

You can conduct customer research without a tool, but that’s a really time-consuming process. You’ll have to manually collect, organize, and analyze data, which is slow work that’s prone to errors. Plus, your data would be spread across multiple spreadsheets, scattered and siloed.

Instead, it’s easier to find a research tool that lets you create surveys and interviews, run usability tests, and analyze the results. Here are some of the top customer research tools worth considering:

Userpilot

Userpilot is a product growth platform offering product teams various features for driving user activation and product adoption.

With Userpilot, you can:

• Trigger in-app surveys and polls to gather contextual feedback.

• Analyze user behavior data to understand how users interact with your product.
• Segment users based on various criteria to identify patterns and trends.
• Conduct A/B testing to experiment with different features or designs.

• Track NPS and other customer satisfaction metrics.
• Integrate with other tools like your CRM and analytics platforms.
• Analyze session replays to see exactly how users are interacting with your product.

SurveyMonkey

SurveyMonkey is a popular platform for creating and distributing various types of surveys.

• Try AI assistance to get tips for creating and improving your surveys.
• Perform sentiment analysis to categorize open-ended survey responses.
• Create different types of surveys, like CSAT, employee satisfaction, market research surveys, etc.
• Integrate with other apps for easy access to customer feedback.

Hotjar

Hotjar is a product experience insights tool for collecting behavioral analytics and feedback data.

• Create heatmaps to visualize user interactions and remove friction.
• Capture session recordings to discover issues across the user journey.
• User feedback polls to understand your website and product usage better.

Mixpanel

Mixpanel is a robust product analytics platform for tracking user interactions and analyzing funnels.

• Perform survey analytics to interpret participant responses for insights.
• Use session replays to watch for any friction across user journeys.
• Experiment with A/B testing to refine your forms and workflows.
• Run funnel analysis to track users’ progress throughout the journey.

Measuring the ROI of customer research

After implementing all these customer research steps and best practices, it’s time to measure the impact on your SaaS business. This will help demonstrate the value customer research offers and justify continued investment.

1. Link research to business goals

Your research objectives should be directly linked to key business goals.

Suppose the business goal is to reduce overall churn by 15% within the next quarter. So, a relevant research objective can be to understand customer churn reasons.

2. Track key metrics

Based on your objectives, identify relevant metrics to track that demonstrate the impact of your research. These could include:

• Customer satisfaction: NPS, CSAT, CES.
• Retention: Churn rate, customer lifetime value.
• Product adoption: Feature usage, activation rate, time to value.
• Revenue: Conversion rates, average revenue per user.

Before implementing any changes based on your research, you should also establish a baseline. This allows you to compare and measure the impact of your actions.

3. Calculate ROI

With the stage all set, the last step is calculating your customer research’s ROI.

• Quantify the benefits: Assign a monetary value to the improvements you’ve achieved based on your research. For example, calculate the increased revenue from higher conversion rates or the cost savings from reduced churn.
• Compare to research costs: Compare the quantified benefits to the costs of conducting the research, including staff time, tools, incentives, etc. The equation would look something like: ROI = Increased Revenue – Research Costs.

If the benefits outweigh the research costs, you’re good to go! And will probably secure great funding for future customer research projects, too.

Do customer research the right way

Customer research isn’t just about checking some boxes or collecting enough responses to populate your dashboard. Those responses need to mean something.

Practically, that means opting for a mix of both qualitative and quantitative methods to capture a well-rounded view of your customers’ needs. Or regularly analyzing data from different channels like support tickets, social media, and user feedback to spot recurring trends. And always iterating to improve or redefine your research goal based on new findings.

Looking to conduct customer research to build better products? Book a Userpilot demo and see how it can help by offering multiple research methods, like customizable surveys, session replays, A/B testing, and more.

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