User Research that drives businesses

Although the popularity of user research is growing, some people think it’s an expensive pastime that only big businesses can afford. Even large companies perceive funding for research as a cost, not an investment. In times of crisis, research budgets are the first candidates for cuts. So, is research unnecessary? Let’s try to find out.

Why user research is valuable for the company

• Relevant data. Research is a source of information about the customer perception of existing or new products that helps managers develop a product strategy according to demand.

• Customer-centric. Research helps to understand customers’ needs and pains. This information allows managers to develop needs-based products and services and optimize performance, usability, and conversion of existing services. 

• Competitive advantage. A vital tool to stay ahead of competitors is to conduct comparative studies. Thanks to research, you’ll know why customers prefer some products to others, what weaknesses competitors have, etc.

• Right decision-making. Research is the best way to prevent the influence of cognitive biases, which often promote bad business and product development decisions.

Managers will never know perfectly everything about the product, customers, potential clients, and their needs, etc., so there will always be uncertainty in choosing a course of action.

But, through research, the level of uncertainty can be reduced, allowing the manager to be more confident that he made a correct decision.

The types of research 

User research is a systematic collection and interpretation of information about individuals and organizations using statistical and analytical methods and techniques from the applied social sciences. Companies use it to make business decisions.

There are many typologies of research:

• By the source of information: Primary vs. Secondary

Primary is research that you can collect yourself. It is raw data collected through various ways – surveys, focus groups or in-depth interviews, data analysis, observation, etc. The secondary is the finding out data that has already been collected, analyzed, and published.

• By the main question: Quantitative vs. Qualitative

Qualitative research acquires in-depth, detailed information about the research subject. It is the collection of data that is non-numerical. Quantitative research is the collection of data that is numerical in nature.

Qualitative research answers the questions “how?” and “why?” while using quantitative methods of research, you can get an answer to the question “how much?”

• The research subject: The Attitudinal vs. Behavioral Dimension

As the Nielsen Norman Group article states [2], this distinction can be summed up by contrasting “what people say” versus “what people do.”

So, attitudinal research is trying to mature and analyze people’s thoughts and beliefs about the research subject. Behavioral research methods focus on understanding people’s behavior toward some products or services in question.

• The main goal: Exploratory vs. Specific

Exploratory research is general and open-ended and typically involves lengthy interviews. People take them in case of absence or lack of knowledge about the research object, the target audience, the population, etc.

Specific research people use to solve a problem identified in an exploratory study. It involves more structured, formal interviews to dive deeper into a particular topic or issue.

During exploratory research, we usually collect qualitative data. Specific study often finds their insights through quantitative data. But such a division is not compulsory.

• By the context: Natural, Scripted, Not using

The natural research approach means that the study happens during the natural use of the product. The main instrument in such a type of research is participant observation. The goal is to minimize interference from the study to understand behavior or attitudes as close to reality as possible.

A scripted study follows the particular scenario of product usage. This research focuses on the insights on specific product or service usage aspects (for example, a newly redesigned flow).

Studies where the product is not used, are conducted to study broader issues than usage and usability, such as a study of the brand, advertising, or cultural behaviors.

• By the service design/product cycle: Discover, Explore, Test, Listen [1]

• By the research object: market research (brand tracking, ad test, package test, concept test), UX research, customer experience research

Each typology includes different research methods. Nielsen Norman Group, in their article [2], propose such matrics of mixing research by subject (Attitudinal vs. Behavioral Dimension) and main question (Quantitative vs. Qualitative).

Also, below, the example of the research method mix for User-Experience Research [2]

Here are some examples of how to solve specific business problems:

Conclusion

Research is a reliable base for business decisions. It is the best way to protect businesses from incorrect steps based on past consumer behavior or intuition. Removing subjective opinions while making business decisions is the goal and strength of research. If some feature was a hit in the last version of some product, how can we be sure that it still will be the same in the future? And how may it be possible to lead the product development to the next level without asking for feedback from the people who use it?

Conducting research allows you to use data to answer those questions. By identifying and gathering feedback from your target customers, you can understand how they feel about your products and services, your brand, and your communication before you go to market.

Sources
1. https://www.nngroup.com/articles/ux-research-cheat-sheet/

2. https://www.nngroup.com/articles/which-ux-research-methods/

3. https://www.amazon.com/Strategic-Market-Research-Conducting-Businesses/dp/173138517X

This article reveals the essence of cognitive distortions and the importance of critical thinking when working on product design, value propositions, customer experience changes, and other areas related to product or service design and development. 

Cognitive biases (distortions) are changes and deviations in human perception, behavior, and thinking caused by subjective beliefs, stereotypes, social, informational, emotional, environmental factors, and the peculiarities of the structure of the human brain. 

If you know these distortions, you can reduce their impact on work or use them for business purposes to increase profit. 

Types of cognitive biases

1. Group Thinking – making rational decisions based on a common group opinion to avoid conflict. It occurs in teams working together for a long time, with pronounced informal leaders, and in the culture, where is a practice of shifting responsibility. 

It leads to narrowing the number of options to choose “safe” strategies, reducing the probability of creating breakthrough products and lacking a critical view of the problem.

2. The Halo effect – the transfer of certain qualities (good or bad) of a person to other aspects of life, interactions, etc. This distortion can lead to a biased attitude toward information or decisions from a particular person, based on exaggerating or undervaluing them based on characteristics you have previously assigned to that person (wise, expert, buffoon, etc.).

The critical question is whether the person has the objective experience, decision-making competencies, hypothesis making, and evaluation.

3. The Dunning-Kruger Effect – the less we know, the more confident we feel about solving the problem. The project framework is often expressed by underestimating the task complexity, the timing of implementation, and the resources required.

It can be compensated by the involvement of experts and the complex evaluation of risks at each stage of project implementation.

4. Confirmation Bias – a tendency to see, remember, and interpret external factors as confirming your opinion/decision. It leads to underestimation of project risks, and overconfidence, as a consequence of ignoring signals in the early stages that the decision is wrong. It is leveled out by qualitative research and tests at each critical point of the project.

5. Belief Bias – is similar to Confirmation Bias, the effect of accepting and giving more weight and credibility to arguments that confirm your personal internal beliefs. The consequences and countermeasures are identical to the previous effect. You can also add the involvement of experts and the creation of a qualitative criteria matrix for decision-making.

You can see the difference between Confirmation and Belief Bias as follows:

  • I have an idea to start an electric scooter rental startup. Whenever I see someone on an electric scooter, I am convinced that this is the right decision because of Confirmation Bias.
  • Two friends, Max and Alex, have opposing views on my idea, each with their own arguments. I believe Max more because he has an electric scooter.

6. Status quo Bias – is a preference for maintaining the status quo as the most advantageous. Changes are perceived as a loss. It is characteristic of constant processes, approaches to work, and products in companies. It affects the ability and speed of the team to adapt to market opportunities. The effect is counterbalanced by launching pilot projects, an iterative approach, and hypothesis testing.

7. Sunk-Cost Effect – overestimating the costs already incurred on new opportunities. “We’ve already had enough of this software; let’s not invest again.” At the decision point, we ignore the new features and try to “protect” the decisions made in the past.

This effect influences the ability to quickly relaunch products or discard past choices to obtain new opportunities. It is counterbalanced by pilot projects, tests, and financial model calculations.

8. Framing Effect – we tend to have different perceptions and make different appraisals of the same information, depending on whom and under what conditions it was obtained. In product development, the presentation of information can strongly influence the perception of research results, the selection and prioritization of concepts, and future product features.

It is possible to fight against this warning using maximum rationalization of information presentation and differentiation of quantitative and qualitative influence factors.

9. Co-creation effect – we attach more value to the idea, solution, or product to the creation of which we belong. On the one hand, this effect may reduce the probability of an objective assessment of various product concepts by the “stakeholders.” If they are a participant in the process, on the other hand, it increases the probability of adopting and maintaining the innovation within the company (group). The creation of a matrix with selection criteria reduces the risk of bias.

10. The Survivorship bias – we try to focus on successful examples, ignoring the analysis of cases that were not successful. For instance, we will create a new social network like FB, Linkedin, and TikTok! They have succeeded. We are not analyzing the experience of thousands of other startups that have gone bankrupt in this segment. This bias leads to ignoring or preliminary assessment of the causal factors and erroneous decisions.

11. The Blind-spot Bias effect – we are confident that we have no bias and that our decisions are correct and unbiased. 

Craft Innovations provides services to companies and product teams to facilitate product innovation development. We will be happy to help you validate and implement your hypotheses. Contact us via email at bizdev@craftinnovations.global