Customers vs buyer vs users. All customers are buyers. But not all buyers are customers. And not all customers are users (especially in B2B SaaS). And not all users are customers (think free trial).
No, it’s not a new Dr. Seuss book on research! We love Hannah Shamji’s thoughts on the types of research you do with different groups of people. James Praise added a great table to break down more of the thinking.
The terms “customer” and “buyer” and “user” often get tossed around like they’re going out of style. But when it comes down to research, mixing them up can lead to a real pickle. Are you scratching your head, trying to figure out whether you should send surveys to your customers or watch how users interact with your product? You’re not alone.
The puzzle is real: businesses wonder which research path will lead them to the treasure trove of insights they desperately seek. But here’s the good news – you don’t need to stay lost in the research labyrinth.
This post is your trusty map. We’ll shine a light on the distinct differences between customer vs user vs buyer research. When we’re done, you’ll grasp what sets them apart and which will serve your quest for knowledge best.
So, roll up your sleeves, and let’s dive into the world where data is king and research reigns supreme.
First, Demystifying the Research Terms
Hanna suggests two types of research:
1. Diagnostic research: Research people who just did the thing you want more people to do (like buying or signing up) so you can diagnose their decision journey and coach others down the same path.
2. Preventative research: Research people who just did what you want to prevent or avoid (like canceling, unsubscribing, or returning a product).
Diagnostic research and preventative research can be thoughtfully integrated into the attached framework, which breaks down into Customer Research, Buyer Research, User Research, and Market Research.
- Diagnostic Research aligns closely with Buyer Research. This type of research delves into understanding the motivations and decision-making processes of individuals who have just purchased or signed up. By examining these buyers’ journeys, businesses can create buyer personas and map out purchasing patterns.
This allows them to identify what encouraged these consumers to make a decision in favor of their product, which is instrumental in coaching potential customers down the same path.
- Preventative Research is in sync with aspects of Customer Research. When researching individuals who have taken actions that businesses wish to prevent, like canceling or unsubscribing, the focus is on retention, loyalty, and understanding behaviors that lead to dissatisfaction.
Methods like surveys and feedback interviews are pivotal in this. The output of such research often results in developing retention strategies and understanding the pain points that lead to undesirable actions.
By mapping these types of research onto the given framework, businesses can more precisely cater to the needs and behaviors of their market, ensuring that they not only attract new customers but also retain existing ones.
Customer vs Buyer vs User: Knowing Your Audiences
Navigating the business landscape requires understanding the subtle yet significant differences between customers, buyers, and users.
Customers are your revenue generators who have committed to your product or service. Their continued satisfaction and loyalty are paramount for sustained success. Buyer research zeroes in on potential customers, decoding the motivations behind their purchasing decisions to convert interest into sales effectively.
Customer vs User
Users, however, may not always be the purchasers but are the direct interactors with your product, influencing product development and improvement through their feedback and behavior.
Understanding the intersection and divergence of these groups (Customer vs User vs Buyer) is crucial. While a buyer’s journey may culminate in a purchase, a user’s experience is critical for product evolution, and a customer’s ongoing satisfaction is essential for retention. Balancing these interrelated yet distinct aspects is key to a comprehensive business strategy.
Customer Research – Understanding Your Revenue Stream
Let’s plunge into the heart of customer research. It’s not just about knowing who buys, it’s about understanding the ‘why’ behind their actions. Customer research is your compass to navigate the vast ocean of consumer behavior, guiding you to the treasure trove of insights that spur business growth.
Diving Deep into Preferences and Behaviors
Why do people choose your product? What ticks their boxes? That’s what you’re after here. It’s like assembling a puzzle of preferences, needs, and behaviors to see the full picture of your customer’s journey. It’s about getting personal, not just with their demographics but also their psychographics.
The Audience That Fuels Your Business
Your current customers are your business’s backbone. They’ve already shown interest, which means you’ve done something right. Now, it’s about understanding their ongoing needs to keep them hooked. They’re not just numbers; they’re the lifeblood of your revenue stream.
Retention, Loyalty, and Satisfaction
This trio is the holy grail of customer success. Retention is about keeping your customers aboard your business’s voyage. Loyalty comes from customers who don’t just buy once but become repeat buyers and advocates for your brand. And satisfaction? It’s the anchor that keeps them steady in your harbor.
Practical Ways to Harness Customer Data
Surveys and interviews can act as your sonar in the deep sea of the market, pinging back valuable information. Analyzing purchase history isn’t just about counting sales; it’s about spotting trends and patterns. And what do you get at the end? Profiles that tell you not just who your customers are but what makes them stay, and strategies that help you turn first-time buyers into lifelong patrons.
By mastering customer vs user vs buyer research, you’re not just sailing blindly; you’re charting a course for sustained success and profitability.
Online banking company Banko used Helio to survey their target audience and understand their needs and behaviors before moving forward with business ideas.
For instance, Banko used Helio’s data filtering to learn whether consumers with certain credit scores might be more interested in regular updates about their credit health.
First, they started with simple user behavior questions, such as their financial habits, current credit score, and interest in notifications:
By activating filters for different credit scores using Helio’s data report, the team was able to compare the responses of different segments:
The Banko team actually found that consumers with lower credit scores below 630 were less likely to be interested in regular credit status notifications:
With this type of customer research, the Banko team is better able to understand the actions, and therefore the wants and needs, of their audience.
Buyer Research – Mapping the Decision Journey
Now let’s unravel the mysteries of buyer research. The compass guides you through the intricate decision-making process of potential customers. It’s about understanding the ‘why’ before the ‘buy’.
Understanding Motivations and Decisions
Buyer research is your behind-the-scenes look at the pre-purchase ballet. It uncovers the motivations leading up to the grand finale—the purchase. This insight is golden; it shows you what buttons to push to transform potential into purchase.
The Value of Potential Customer Insights
Who are these potential customers? They’re your future revenue, teetering on the edge of decision. By studying them, you’re placing your chips on the squares most likely to win in the marketplace roulette.
The Goal: Conversion and Purchase Decisions
Your mission is to chart the course from ‘maybe’ to ‘definitely’. Buyer research identifies the signposts that guide potential buyers along their journey, ensuring the path leads straight to your checkout.
Methodology and Output: Buyer Personas and Patterns
You create buyer personas through surveys, interviews, and demographic studies—sketches of your ideal customers. These aren’t just figments of imagination; they’re blueprints of real people whose purchasing patterns are a treasure map to sales success. But remember, customers vs users vs buyers they’re not all the same.
By focusing on buyer research, you’re not just casting a wide net but fishing where the fish are biting.
To understand user motivations and decisions, Banko utilized Helio’s Action Map method.
First, they outlined some key scenarios in their onboarding process where they want users to make certain decisions, such as submitting identity verification during sign-up.
Banko laid out this scenario for participants, and asked them to make a decision between 4 key actions:
Once the responses were collected, the Helio data report revealed the most likely audience decision in each scenario:
The Helio team helped Banko load the results into their Action Map framework, which outlines the scenario, audience decision making, and resulting product recommendations:
Banko’s Action Map testing gave them a solid understanding of how their consumers make decisions in the onboarding process.
User Research – Enhancing Product Interaction
Alright, let’s switch gears and dive into user research. This is where you get up close and personal with how individuals engage with your product or service. It’s like being a fly on the wall, observing every click, swipe, and hover.
Revolutionizing Products through User Interaction
Imagine you could read your users’ minds as they interact with your product. User research is the next best thing. By exploring how each feature is used (or ignored), you can uncover opportunities to innovate and elevate your product to new heights.
Why Studying Actual Users Matters
Users are the ones who breathe life into your product. They’re the pilots navigating your interfaces, the players in your digital playground. By studying their usage, you unlock insights to drive your product forward.
The Path to Improvement Through User Experience Enhancement
Your goal? A product that feels like it reads the user’s mind. User research steers you towards an intuitive and enjoyable experience that becomes a natural part of your users’ lives. That’s the secret sauce to user retention and satisfaction.
Gaining Actionable Insights
User studies are the treasure maps of the digital world. Through observations, usability tests, and interviews, you gather the data that mark the spots needing improvement. The treasure? Actionable insights that lead to user personas, usability improvements, and design recommendations that resonate with your audience.
By honing in on user research, you’re not just building a product but crafting experiences that captivate and keep users coming back for more.
Helio’s testing platform provides several ways to evaluate user interactions and usability of product experiences.
Banko used Helio’s first click testing, and the resulting Interaction Matrix method, to track the usability of their mobile pages across multiple iterations of design.
Each colored box in the framework corresponds to a success percentage for participants completing key actions across the product experience.
For instance, Banko’s primary action on the dashboard to learn about your credit score, tested well across each variation:
While other actions were less clear and required a few rounds of iteration to get right on the page:
The decisions made by user research are much more clear when they can be tracked with quantifiable metrics across multiple versions of the team’s iterations.
Market Research – Capturing the Big Picture
As we focus on market research, consider it the bird’s-eye view of the commercial landscape. It’s not just about who buys or uses your product but about understanding the playing field.
Analyzing Market Dynamics
Market research is the telescope through which you gaze upon the vast expanse of your industry. It’s about discerning patterns, trends, and the movements of the market tides. By analyzing these elements, you position your business to ride the waves rather than be swept away by them.
Sizing Up the Competition and Consumer Preferences
This research is about knowing your battleground. Who are you up against? What are the emerging preferences shaping the market? By sizing up the competition and consumer trends, you tailor your strategies to meet the market where it stands—and where it’s heading.
The Endgame: Demand and Positioning
Ultimately, market research aims to align your product with market demand and secure your brand’s position like a king on a chessboard. It’s about being proactive, not reactive, in your business maneuvers.
Methods to Master the Market
From surveys to SWOT analysis, each method is a brushstroke in the portrait of your market segment. The output? Reports and forecasts that inform your decisions, ensuring they’re data-driven and directed toward sustainable growth.
By engaging in comprehensive market research, you’re not just a player in the game—you’re looking to be a game-changer.
To understand their target market more clearly, the Banko team used Helio testing to develop distinct personas that represent ideal customer profiles (ICP) for the company.
This is where the data filtering shown earlier in Banko’s customer research was most powerful for segmenting their audience and understanding different user perspectives.
Experience questions were used to gauge what types of actions Banko’s audience currently take when it comes to their finances:
With responses about their experiences gathered, the Banko team then used Helio’s data filters to isolate specific demographic segments that they believed might yield different results:
Once the responses are filtered, Helio’s data reports reveal the difference in answers between the new filtered group and the overall audience:
For instance, Banko found that participants with higher incomes over $100k/year are actually much more likely to use an app to track their finances right now.
As the differences in these segments are revealed, the Helio team helped Banko load their results into a Persona framework:
As Banko continues to refine these personas, they will be most key to their marketing efforts and understanding how they can speak to different consumer segments most effectively.