Why Consumer Research Is Important

Have you ever launched a product or service, only to find out your customers didn’t really want it? That painful lesson happens more often than you’d think. The good news: consumer research can save you money, time, and frustration by giving you clear directions before you make big business moves.

And here’s the best part, you don’t need a huge budget or a dedicated research team to see results. With the right approach and a few simple tools, consumer research can make a meaningful impact on your business.

What exactly is consumer research?

The dictionary defines it as “the action or activity of gathering information about consumer’s needs and preferences.” But let’s put it in plain terms: consumer research is about understanding your customers, your competitors, and the trends shaping your industry.

It’s not just for big corporations with large research budgets. In fact, small businesses often benefit the most because even small insights can lead to big growth. Think of it as listening before you speak in business.

Yes, the word “research” sounds intimidating—science-y, complicated, expensive. But in practice, it’s simply about observing behavior, asking questions, and gathering insights that help you serve your customers better. The payoff for understanding your customers’ needs and preferences can be huge.  And there are many relatively simple tools you can use.

Do you have to conduct consumer research to get these insights?  If you want to have a successful business, yes, and it’s easier than you think.

Consumer research begins with…the consumer

Customers are the foundation of every business.  Lose touch with them, and even the best strategies can backfire. The most successful businesses keep their customers at the center of every decision.

Good research helps you…

Create the right product: build what they actually want with the features that matter most.

Price it right: understand what they’re willing to pay.

Promote effectively: craft messages that resonate.

Reach them in the right places: focus your time and marketing dollars where they’ll see you.

What are the different ways consumer research can help?

Consumer research is about making better decisions. Here are a few ways it helps:

Positioning: identify the right market space for your business based on customer needs and competitor activity.

Idea Validation: test new product or marketing ideas with your customers and find out if it won’t work, needs improvement or is ready to go.  This is especially helpful before you fully commit resources.

Innovation: spot unmet needs and opportunities for growth that will help generate new product/service ideas.

Strategic Foresight: stay ahead by tracking trends and anticipating customer shifts so you can make changes in your business ahead of, instead of behind, the curve.

Customer Loyalty: delivering what customers want builds trust and keeps them coming back even when competitive pressures hit.

Risk Reduction: avoid costly mistakes with data-driven decisions about pricing, products and messaging.  And catch any red flags that might blow up to be bigger issues if not addressed.

Common misconceptions about conducting consumer research

A lot of businesses think research isn’t for them. Let’s bust a few myths:

It’s too expensive. → Not true. Free tools like Google Trends, social media polls, and customer conversations can uncover plenty of insights.

I already know my customers. → Maybe, but assumptions can be dangerous. Direct feedback often reveals surprises.

It takes too much time. → With the right tools, you can collect valuable insights in just a few hours.

Bringing consumer research to life: two real-world examples

Kraft Mac & Cheese: Research Done Right

Kraft Mac & Cheese generates over $500 million in sales annually with over a 75% share of the category.  It’s a beloved, iconic brand that got its start in 1937.  But it faced growing competition as consumer preferences shifted. To adapt, they reformulated their iconic Mac & Cheese to remove artificial ingredients—without changing the taste.

Kraft invested in consumer research to make sure any changes would be positive for consumers who both wanted fewer artificial ingredients and who loved the taste and didn’t want it to change.

The result?  Sales grew by 4%, adding millions in revenue.

Tropicana: The $20 million cost of skipping research

Tropicana wanted to refresh its juice packaging to modernize the brand. They sank in months (and $35 million) on the redesign, only to lose $20 million in sales in the first month alone. After just 30 days, they tossed the new packaging and reverted to their original design. 

The response to the rebrand was overwhelmingly negative, which came as a complete shock to Tropicana because they made the assumption that they knew what their consumers wanted or was important to them. But it shouldn’t have been a shock. There should have been consumer research done to gauge response. A few focus groups could have steered them away from the new packaging and helped them avoid a very expensive mistake.

Source: The Worst Rebrand in History: How to Avoid Tropicana’s Famous Failure, by Lauren Casgren-Tendall of Crème de Mint, August 2022.

Consumer research is easier than you think

Consumer research doesn’t have to be complicated or expensive.  Insights for the Kraft example were gathered using straight forward consumer interviews which any brand, big or small, can do.  And the risk of not doing any research, like Tropicana, can lead to very costly mistakes.

Start small. Talk to your customers. Use free tools. Pay attention to trends. When you make listening a habit, you’ll discover insights that guide smarter decisions, reduce risk, and set your business up for long-term success.  The goal isn’t to drown in data—it’s to uncover insights that help you make confident, customer-driven decisions.