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• What is customer research?

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Designing products that both delight customers and solve their problems is essential in a competitive landscape!

But how do you identify what your customers want and need, let alone who your customers really are?

Customer research enables you to learn more about your customers, understand their motivations, and get to grips with their behavior on a deeper level. You can use all this knowledge to create truly user-centric products.

Customer research is how you understand your customers—their needs, pain points, and demographics.

It also allows you to dive into key aspects of customers’ motivations and behaviors. It’s about learning how customers act and what will encourage them to take certain actions.

This is important when developing products. Deeply understanding your customers helps you deliver products that are easy to use, satisfying, and better at solving problems.

You’ll keep designing products that fall short if you don’t know your customers well and can’t see things from their point of view.

• What’s the difference between customer research, market research, and user research

You may have heard the terms customer research, market research, and user research. They might sound similar and have some related functions, but they are distinct types of research.

Market research is generally conducted in the early stages of product creation. Its role is to generate an understanding of the whole market, including what people need and want from products. This type of research typically identifies market readiness, size, competition, and demographics.

While market research is broad, customer research is more specific. It’s a process by which data and information collected during market research are analyzed, grouped, and evaluated. You can think of it as an extension of market research, though some organizations may perform these functions simultaneously.

The focus of user research is generally on understanding what is and isn’t working with current products and where helpful innovation can occur.

• Types of customer research

Primary and secondary research are some of the main types of customer research.

Quantitative and qualitative data are two types of data.

It’s helpful to know the difference between these groups to ensure you collect the right data and information for your project.

Primary vs. secondary research

Primary research is data collected directly by the organization from customers. It is obtained through research methods like surveys, focus groups, or analytics.

The advantage of primary research is having the power to obtain the data that’s most relevant for you. Knowing exactly what data has been collected and how to collate that information into meaningful insights is also more simple.

Secondary research is data collected by external sources, such as research groups, governments, and other companies. You can use it to discover more about customers.

Using data collected by other sources gives you less control, but it can save you money.

Ideally, a combination of both primary and secondary research will help you build a true picture of who your customers are.

Qualitative vs. quantitative data

You also need to understand which type of data will be most helpful for the relevant project.

Qualitative data is obtained directly from users, usually through methods such as in-depth interviews, focus groups, usability testing, and field studies.

This type of data can help designers understand why users do things and gain insights into how to solve their issues.

Quantitative data consists of numeral value measurements gained indirectly from users.

This type of data usually involves measurements like how much, how many, and how many times. Surveys, metrics, and user tests are some of the methods through which it can be collated.

• The best customer research methods

The best customer research method will be the one that’s most relevant and useful for your project. So, what works for one product may not be the best match for another. 

Before deciding on a customer research method, asking the following questions can be helpful:

What do we most need to know about our customers?

What do we not know about our customers?

Are we satisfied that our product has a market?

Do we truly understand our competitors?

Do we deeply understand our target market?

Is our product solving a real-world issue for people? Do we have data to back that up?

Is this product the best possible solution for our customers?

These questions can act as a starting point to discover knowledge gaps. They can also help your team choose the research methods that can plug any of these holes.

Customer surveys

Surveys involve asking customers a series of targeted questions. They’re a popular research method because they can be conducted in several ways, such as with an online questionnaire, phone call, or email.

Surveys can help organizations quickly discover large amounts of useful information. They are also relatively inexpensive, as many free templates are available online.

Keep in mind that a survey is only as good as its questions. Ensure that you’re asking questions that will help you discover the most relevant and helpful data about your customers.

Surveys that follow best practices include the following:

Open-ended questions to get the most information from customers

Consistent ranking scales to avoid ambiguity

Questions that are relevant to the team’s end goal

A short series of questions to avoid overwhelming participants

Customer interviews

Interviewing customers is one of the most straightforward and helpful ways to discover their views, wants, and needs.

Customer interviews include a team member or neutral party having a discussion with a customer. They offer the chance to discover new insights that might not otherwise have been uncovered.

This technique won’t enable you to gather quantitative data, but you will gain new insights into how your customers think and perceive products.

Here are some best practices to follow when conducting customer interviews:

Clarify answers. If there’s any ambiguity in what a customer said, make sure you follow up with further questions to aid true understanding.

Challenge your assumptions. Don’t bring any assumptions to the table. Instead, ask customers how they really think and feel. Having a neutral moderator can help remove any bias the team may bring.

Keep things open. Asking open-ended questions and offering a safe space to share answers are essential steps. Doing so will help you gain real thoughts, not hear what participants think they should say.

The benefit of real data should never be overlooked when it comes to customers. People might say they act in certain ways, but their behavior can show otherwise.

Analytics (in a product dashboard or other data collection method, for example) will reveal a great deal of information about customer behavior. It can help streamline your business, remove areas of friction, and improve the overall customer experience .

Metrics like heat maps, time spent, click tracking, and number of sessions can help you build a picture of your customer’s behavior.

Are customers failing to complete their payment information? Are people landing on your page and immediately clicking away? Is a particular aspect of your experience retaining your customers’ attention? These are just a few useful questions you can ask as you go through your analytics.

Focus groups

Focus groups are a well-known and popular research method. They help teams discover a large amount of information in a short time period.

In a focus group, a small number of people—usually eight or fewer—gather together to discuss products, pain points, preferences, and how they might engage with products.

Focus groups are run by a moderator or a person from the organization who can act neutrally. The moderator will set out a series of questions or topics for the group to discuss.

The benefits of focus groups include the following:

Gaining insights into how users perceive your product

Spontaneous responses you may not have discovered otherwise

Information about key problems and pain points

An understanding of what your users want from a solution

However, focus groups also present some challenges. Louder voices in a group may sway others to agree with the consensus rather than share their real opinions. To combat this, offer all members of the group a safe space to share their thoughts. Encourage varying responses.

Competitor analysis

Competitor analysis helps you dive into what the market is currently offering. It shows what competitors are doing well and what could be done better. This helps you create new products that solve your customers’ problems more effectively.

The following are best practices for conducting competitor analysis

Be clear on who your competitors are

Identify your competitors’ strengths and weaknesses

Clarify who holds the largest market share and why

Analyze online presence, reviews, and product information

Speak to competitors’ customers

Competitor analysis isn’t just about discovering information about your competitors; another goal is to turn information into action. You’ll ideally want to improve on what a competitor currently offers and provide a product that’s more satisfying for customers.

• How to conduct customer research

The following key steps will enable you to conduct useful customer research.

Set clear objectives

There’s a broad range of data and information that can be collected with customer research. However, not all of it will be relevant to your specific project. 

That’s why setting clear objectives from the outset is critical. All methods and data should lead back to these objectives.

Use multiple methods

One research method is unlikely to gather enough information for your project. And no one method is perfect.

Conducting multiple forms of research ensures you discover more about your customers and that your team gathers enough helpful data.

Find the right people

Your research won’t be effective if you’re talking to the wrong customer group. But how do you find the right people?

If you already have a product, it would be enormously beneficial to speak to your current customers . They have proven that they’re in your target audience.

Forums, advertising, local groups, and organizations are good ways to identify potential customers to participate.

Let’s say you’re designing a dog-sitting app. In this case, you’ll need to speak to dog owners who would like more flexibility to travel. You could find these people in online groups, through a local meeting, or even at a park that’s popular for dog walking.

Consider incentives

It’s also worth considering incentives. These can encourage the right people to get on board. For example, you might offer participants the chance to win a voucher or give them a small amount of cash to participate.

Ensure any incentives are meaningful for your target audience.

Develop meaningful insights

Collecting a range of data and information from multiple methods is helpful. However, it’s ultimately meaningless if that data isn’t collated into useful insights .

Ensure that data is accurately grouped and represented clearly and concisely so that the entire business can benefit from the learnings. You might need to hire a data analyst.

• Surprise and delight your customers

Keeping customers at the center of what you do is the only way to create products that are helpful for people.

All products should help customers, whether that’s by solving a problem, making their life a little bit easier, or entertaining them in some way. Customers should want to use your product and enjoy the process.

By researching your customers, you can truly understand how they feel , where their pain points are, how they behave in real-life situations, and what solutions would please them. Ultimately, all this helps you better serve your customers.

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Do you want to discover previous customer research faster?

Do you share your customer research findings with others?

Do you analyze customer research data?

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What is Customer Research? Definition, Types, Examples and Best Practices

By Nick Jain

Published on: June 26, 2023

Table of Contents

What is Customer Research?

Types of customer research, how to conduct customer research: 10 key steps, examples of customer research questions, top 10 best practices for customer research.

Customer research is defined as the systematic process of gathering and analyzing information about customers, their behaviors, needs, preferences, and experiences. It involves qualitative and quantitative studies to understand the target audience in order to make informed business decisions and develop effective strategies to meet expectations on customer experience and product/ service demands.

Customer research aims to provide insights into various aspects of the customer journey, including their motivations, purchase behaviors, satisfaction levels, and pain points. It helps organizations gain a deep understanding of their customers, enabling them to tailor their products, services, and marketing efforts to better meet customer expectations.

The key components of customer research typically include the following:

• Research Objectives: Clearly defining the objectives and goals of the research is crucial. This involves determining what specific information or insights the organization aims to gather from customer research. Research objectives help guide the research process and ensure that the collected data is relevant and aligned with the organization’s needs.
• Target Audience Definition: Identifying the target audience or customer segment is essential. This involves determining the specific group of customers or potential customers that the research will focus on. The target audience should be representative of the organization’s customer base or the intended market.
• Research Methodology: Choosing the appropriate research methods and techniques is important to gather relevant data. The methodology may include a combination of quantitative and qualitative observation approaches such as surveys, interviews, focus groups , or data analytics. The chosen methods should align with the research objectives and provide the desired depth and breadth of insights.
• Data Collection: Conducting data collection activities is a core component of customer research. This involves implementing the selected research methods to collect data from the target audience. It may include distributing surveys, conducting interviews or focus groups , observing customer behaviors, or analyzing existing data sources. Proper data collection techniques ensure the accuracy and reliability of the gathered information.
• Data Analysis: Once the data is collected, it needs to be analyzed to extract meaningful insights. Data analysis involves organizing, categorizing, and interpreting the collected data. This may include quantitative research using statistical techniques, such as descriptive statistics or regression analysis, and qualitative research involving the identification of patterns, themes, and trends in the data. The goal is to derive actionable insights that can inform decision-making.
• Findings and Insights: Communicating the research findings and insights is a critical component. This involves summarizing and presenting the results in a clear and understandable manner. The findings should address the research objectives and provide valuable insights into customer behaviors, preferences, needs, or pain points. Visualizations, reports, presentations, or dashboards may be used to effectively convey the information.
• Recommendations: Based on the research findings, recommendations are made to guide business decisions and actions. Recommendations should be practical, actionable, and aligned with the organization’s goals. They may involve suggestions for product improvements, marketing strategies, customer experience enhancements, market segmentation approaches, or any other relevant areas.
• Iteration and Continuous Improvement: Customer research is an iterative process. Organizations should continuously gather customer feedback and update their understanding of customer needs and preferences. The insights gained from research should be regularly incorporated into business strategies and practices. This iterative approach ensures that the organization remains responsive to customer expectations and market changes.

There are various types of customer research that organizations can conduct to gather insights into customer experiences , behavior, and preferences. Some of the common types of customer research include:

• Customer Satisfaction Research

Customer satisfaction research focuses on measuring customer satisfaction levels with a product, service, or overall experience. It often involves surveys or feedback forms to gather customer opinions and perceptions. Customer satisfaction research helps organizations identify areas for improvement, gauge customer loyalty, and track changes in customer satisfaction over time.

• Customer Needs and Preferences Research

This type of research aims to uncover the needs, preferences, and expectations of customers. It helps organizations understand what customers value, what drives their purchasing decisions, and what features or attributes they desire in a product or service. Customer needs and preferences research can involve surveys, interviews, focus groups , or ethnographic research methods.

• Customer Experience (CX) Research

CX research focuses on understanding how users interact with a product, website, or service. It involves observing and analyzing user behaviors, attitudes, and perceptions to identify usability issues, pain points, and opportunities for improvement. The insights gained from CX research help organizations enhance the customer experience and increase satisfaction.

• Brand Perception Research

Brand perception research aims to understand how customers perceive a brand and its reputation in the market. It involves gathering customer feedback on brand awareness, brand image, brand associations, and brand loyalty. Brand perception research helps organizations assess the effectiveness of their branding strategies, identify brand strengths and weaknesses, and make informed decisions to enhance brand positioning.

• Customer Segmentation Research

Customer segmentation research involves grouping customers into distinct segments based on common characteristics, behaviors, or needs. It helps organizations understand their customer base and tailor their marketing strategies and offerings to specific customer segments. Customer segmentation research can involve data analysis, surveys, or clustering techniques to identify meaningful customer segments.

• Competitive Research

Competitive research focuses on analyzing competitors’ strategies, products, and customer experiences . It aims to gain insights into the competitive landscape and identify opportunities for differentiation. Competitive research involves analyzing competitors’ websites, conducting mystery shopping, monitoring social media, and gathering intelligence through industry reports or secondary research.

• Customer Journey Mapping

Customer journey mapping involves visualizing and understanding the end-to-end customer experience across various touchpoints and interactions with a company. It helps organizations identify pain points, gaps, and opportunities for improvement at each stage of the customer journey. Customer journey mapping can be done through a combination of data analysis, customer feedback , and qualitative research methods .

These are just a few examples of the types of customer research organizations can conduct. The choice of research type depends on the specific research objectives, the nature of the industry or market, and the information needed to make informed business decisions.

Learn more: What is Customer Feedback?

Conducting customer research involves a systematic approach to gathering insights about customers and their preferences. Here are the key steps to conduct customer research effectively:

1. Define Research Objectives: Clearly define the specific objectives of your customer research. Determine what information or insights you seek to gather and how you plan to use the research findings. This will guide the entire research process and ensure that it remains focused and aligned with your goals.

2. Identify Target Audience: Identify the specific target audience or customer segment you want to study. Consider factors such as demographics, location, behavior, or any other relevant criteria. The target audience should be representative of your customer base or the market you wish to understand.

3. Choose Research Methods: Select the appropriate research methods (such as quantitative , qualitative research ) and techniques that will help you gather the desired information from your target audience. This may include surveys, interviews, focus groups , observational research (such as quantitative , and qualitative observation ), data analytics, or a combination of these methods. Consider the advantages, limitations, and resource requirements of each method.

4. Develop Research Instruments: Design the research instruments, such as survey questionnaires, interview guides, or discussion protocols, based on your research objectives. Ensure that the instruments are clear, concise, and structured to gather the necessary data. Use validated scales or questions when available and pilot test the instruments to identify any issues or areas for improvement.

5. Recruit Participants: Recruit participants who fit your target audience criteria and are willing to participate in the research. Depending on the research methods chosen, recruitment can be done through various channels such as online panels, customer databases, social media, or targeted advertising. Clearly communicate the purpose and benefits of the research to encourage participation.

6. Conduct Data Collection: Implement the chosen research methods to collect data from your participants. Administer surveys, conduct interviews or focus groups , observe customer behaviors, or analyze existing data sources. Ensure that the data collection process follows ethical guidelines, respects privacy, and maintains data confidentiality.

7. Analyze Data: Once the data is collected, analyze it to derive meaningful insights. Use appropriate data analysis techniques based on the nature of your data and research objectives. This may involve quantitative research and analysis using statistical methods, qualitative research and analysis using thematic coding or content analysis, or a combination of both. Ensure that the data analysis is rigorous, systematic, and aligned with your research objectives.

8. Interpret Findings: Interpret the research findings to gain insights into customer behaviors, preferences, needs, or perceptions. Analyze patterns, trends, and relationships in the data and relate them back to your research objectives. Look for key themes, outliers, or significant findings that can inform your decision-making.

9. Communicate Results: Present the research findings in a clear and concise manner. Prepare reports, presentations, or visualizations that effectively communicate the insights to stakeholders. Tailor the communication format to the needs and preferences of your target audience, ensuring that the findings are easily understandable and actionable.

10. Apply Insights: Apply the insights gained from customer research to inform your business decisions and strategies. Use the findings to enhance product development, refine marketing strategies, improve customer experiences , or address specific pain points. Regularly revisit the research findings and incorporate them into your ongoing business practices.

Remember that customer research is an iterative process. As you implement the insights gained, monitor the outcomes and consider conducting follow-up research to assess the impact and gather further insights. Continuous customer research helps organizations stay informed about evolving customer needs and preferences, enabling them to stay competitive and customer-centric.

Learn more: What is Quantitative Market Research?

​​Here are some examples of customer research questions that businesses might ask:

• What factors influenced your decision to purchase our product/service?
• How did you first hear about our company?
• What specific features or aspects of our product/service do you find most valuable?
• What improvements or enhancements would you like to see in our product/service?
• How likely are you to recommend our product/service to others? Why?
• What obstacles or challenges did you encounter when using our product/service?
• How does our product/service compare to competitors in the market?
• How satisfied are you with the level of customer support you received?
• What are your expectations for pricing and value in relation to our product/service?
• How frequently do you use our product/service, and for what purposes?

These questions can help businesses gain insights into customer preferences, satisfaction levels, purchasing behavior, and areas for improvement. It’s important to tailor the questions to the specific industry, product, or service being researched to gather the most relevant information.

When conducting customer research, it’s essential to follow best practices to ensure accurate and valuable insights. Here are some best practices for customer research:

1. Clearly define research objectives

Start by identifying the specific goals and objectives of your customer research. What do you want to learn or achieve through the research? This will guide your research approach and help you focus on the most relevant questions and areas of investigation.

2. Use a mix of qualitative and quantitative methods

Combining qualitative and quantitative research methods can provide a comprehensive understanding of your customers. Qualitative methods , such as interviews or focus groups, offer in-depth insights and allow you to explore customer motivations and experiences. Quantitative methods , like surveys or data analysis, provide statistical data and help you identify patterns and trends.

3. Identify your target audience

Clearly define the characteristics and demographics of your target audience. This will help you select the right participants for your research and ensure that customer feedback represents your customer base accurately.

4. Create unbiased and neutral questions

Formulate questions that are clear, unbiased, and neutral to avoid leading or influencing participants’ responses. Use open-ended questions to encourage participants to provide detailed and honest feedback.

5. Use a variety of data collection methods

Explore various data collection methods to gather customer insights. These can include surveys, interviews, focus groups , social media listening, website analytics, customer feedback forms, or online reviews. Employing multiple methods (such as quantitative research methods , qualitative research methods , etc.) can provide a more comprehensive view of customer opinions and behaviors.

6. Engage with customers at different touchpoints

Interact with customers throughout their journey with your product or service. This can include pre-purchase, purchase, and post-purchase stages. Collect feedback at different touchpoints to understand the entire customer experience and identify areas for improvement.

7. Maintain confidentiality and anonymity

Assure participants that their responses will be kept confidential and anonymous. This encourages honest and unbiased feedback. Respect privacy regulations and data protection guidelines when collecting and storing customer data.

8. Analyze and interpret data systematically

Once you have collected the data, analyze it systematically. Look for patterns, trends, and common themes. Identify key insights and use them to inform your decision-making process. Consider using data visualization techniques to present findings in a clear and concise manner.

9. Continuously iterate and improve

Customer research should be an ongoing process. Regularly revisit your research objectives and update your research methods to reflect changing customer needs and preferences. Continuously gather customer feedback and make improvements based on customer insights.

10. Communicate findings and take action

Share the results of your customer research with relevant stakeholders within your organization. Communicate the key findings, insights, and recommendations. Use the research findings to inform strategic decisions, product development, marketing strategies, and customer support initiatives.

By following these best practices, you can conduct effective customer research that provides valuable insights and helps you better understand and serve your customers.

Learn more: What is Qualitative Research?

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• Product management
• Collections: Customer research

A complete guide to customer research — with templates

What makes your product great? What problems does it solve? People will look to you — the product manager — as the expert on these questions. But you know that the answers are not based solely on your own opinions and experience. The most important input often comes from somewhere else: customers.

Understanding customers is integral to developing a lovable product . As a product manager, you will want to explore everything from your users' demographics to their inner motivations and struggles. This process of sussing out their needs and challenges is called customer research.

Conducting customer research is complex and dynamic work, where your curiosity is a tremendous asset. To plan, gather, and analyze feedback, product managers use a wide variety of methods — qualitative, quantitative, and a mix of both. You can take a highly sophisticated approach to this, but many times effective customer research entails talking to customers and using simple tools or templates to analyze their feedback.

In this guide, you will learn the fundamentals of conducting primary research so you can better understand the folks you are trying to help. You can try seven customer research templates to help you experiment with different methods and save time in the research process.

Engage a community and analyze feedback in Aha! Ideas. Start a free trial .

With Aha! Ideas , you can host live empathy sessions with your customers to learn more about their need and preferences.

Why should you do customer research?

Customer research is an essential component of product strategy — alongside competitor analysis , market research, and overall business needs. The insights you glean from meeting and surveying customers help to shape your strategic initiatives , ensuring that your team is poised to deliver what people really want from your product.

A key reason to perform customer research is to gain new perspectives on your product. Your customers may tell you things you never realized — hidden problems, unique ways of completing tasks, and even alternate use cases. What you believe matters most about your product may not even be on your customers' radar.

Let's say your product has a reporting feature with low usage . Your team decides to give the reporting interface a major upgrade. You spend the time and resources to build these updates — only to scratch your head when there is no uptick in usage. What went wrong?

If you breezed past talking to your customers, it is possible that the interface was not the factor keeping them from engaging. Maybe they prefer to use a separate reporting tool — in which case, an integration capability would have been a much more valuable feature to build.

Customer research helps you avoid spending time solving proble ms that do not exist — and highlights the ones that are real and deserving of your attention. This way, you know where to focus your efforts for the best chance of making your customers happy and meeting business goals.

How much customer feedback is the right amount?

The short answer? It depends. Your specific goals, the scope of your research, and the stage of your product's development all play a role. Here are some things to keep in mind when determining the right amount of customer feedback to collect:

Understand your goals Are you looking to validate a new product idea or improve an existing product? Do you need to better understand customer pain points or gather usability insights? These answers will shape your product development goals and dictate the depth and breadth of feedback required.

Define your sample size Consider the size of your target audience and customer base. In some cases, a smaller sample size can provide valuable insights, especially if you are conducting in-depth qualitative research . For quantitative research, a larger sample size might be necessary to ensure statistical relevancy.

Ensure diversity of perspective Aim for variety in your feedback pool. Different demographic groups, usage patterns, and customer segments can provide a more comprehensive understanding of customer needs and preferences.

Include a mix of feedback channels Analyzing feedback from different channels can provide unique perspectives and insights. Experiment with a variety of feedback methods and channels — such as releasing surveys, conducting interviews , and reviewing your social media and customer support interactions.

Consider resource constraints Think about the time, budget, and staff you have available for collecting and analyzing feedback. Balance the scope of your research with what you can realistically manage.

Remember, customer feedback is often collected in iterations. Start with a small group of users for early insights, then expand your feedback pool as you make improvements. Each iteration helps you refine your product and strategy.

And while quantity matters, the quality of feedback is crucial. Sometimes a few detailed, insightful responses can be more valuable than a large number of superficial ones.

Primary vs. secondary customer research

Product managers will use both primary and secondary customer research to gather information. Briefly, the difference is:

Primary customer research refers to gathering your own data and feedback firsthand via interviews, focus groups, surveys, and other methods.

Secondary customer research refers to findings gleaned from external sources like analyst reports and third-party surveys.

Both types can be valuable, but when it comes to your goals as a product manager, primary research is superior. While secondary research will help you understand demographics and broader trends, primary research allows you to drill down into the details of your specific product and target audience.

Your customers' own experiences are invaluable and one of the surest signals to creating a lovable product. For this guide, we will focus on the fundamentals of conducting primary research.

How do product managers gather customer feedback?

How do product managers come up with new ideas for a product?

How to conduct customer research

On a basic level, customer research entails reaching out to current or potential customers and gathering feedback from them via direct conversations or more indirect methods (like online surveys). Advanced tools such as product analytics and idea management software can certainly augment your approach — but are not necessary to get started.

Follow these steps to conduct your own primary customer research:

1. Define your objective Outline your research goals and determine what it is you really want to learn. For example, your objective could be to learn broadly about your customers' business goals or gain a deeper understanding of their experience with a specific feature set.

2. Decide which customers to contact Your objectives will help you decide who to speak with — especially if your product caters to a diverse group of customers. Think about current and potential customers and form a list of people to reach out to.

3. Prepare If you are leading an interview or focus group, meet with your product teammates to prepare your questions. Keep in mind you may need to coordinate with other team members who want to sit in on discussions. If you are conducting a survey, build it — then decide how and when to distribute it.

4. Start your research Conduct your interviews or hit "send" on your survey When talking directly with customers, remember to listen more than you speak. Ask meaningful follow-up questions to encourage deeper thinking and discussion.

5. Analyze, summarize, and share your findings Look for trends in the feedback you received. What did customers agree on? What were the most popular ideas or recurring pain points? Find common threads and share the findings with your team. Together, you can discuss and prioritize the customer ideas that support your overall goals — and promote those ideas to your product roadmap .

6. Repeat Customer research is an ongoing part of product management. You will need to collect feedback from many customers to make informed product decisions. And with every new product launch or major release, you may need to start fresh with a new objective and customer set.

Because it is ongoing, it helps to keep all of your customer research organized. You want to be clear on how your findings will inform the features you develop. For example, the Research tab in Aha! helps you collect whiteboards, interview notes, and ideas right on feature cards.

Editor's note: Although the video below still shows core functionality within Aha! software, some of the interface might be out of date. View our knowledge base for the most updated insights into Aha! software.

Related: 35+ customer questions for product innovation

Get started with customer research templates

Customer research templates offer a simple way to start discovering who your audience really is and what matters to them. Using templates helps you add much-needed structure to your customer research process. Below, you will find an assortment of templates to try — from planning to interviews, surveys, and summarizing your findings.

Aha! software customer interview template

Customer research planning template, customer interview notes template.

Customer survey template

Customer feedback poll template

Customer focus group discussion template, customer research presentation template.

This customer interview template is a great one to start with. It is a guided template with helpful prompts and instructions in each section. This makes it simple to plan your conversations with customers so you can get the most out of each interview. It is available in Aha! software — which gives you a central place to document and organize your findings.

Start using this template now

This planning template helps you define your objectives, identify which customers to talk to, and prepare for your research session. It includes sections for customer profiles (personas, segments, and companies) to add context to your research group.

An interview template will keep your notes organized during conversations with customers. It will also help you guide the flow of the interview and note any takeaways or action items to proceed with after the session ends. Feel free to customize the discussion questions to match your objective.

Customer research survey template

Customer surveys allow you to gather insights from more people in less time — with the added benefit of built-in reporting via online survey tools. This template will help you learn how to design an effective customer research survey and plan the demographic, use case, and customer satisfaction questions that you want to ask. It includes a blend of question types for both fixed and open-ended responses.

Polls offer a simple way to incorporate a quantitative component into your qualitative research. For example, you can quickly gauge the group's opinion on an idea by inserting a poll in an online focus group or empathy session . This template will help you jot down ideas for future polls.

Similar to the customer interview template, this focus group template will help you structure your session. It emphasizes a well-planned agenda over note-taking — encouraging you to be present in the discussion when you are facilitating a focus group. You can always record the focus group session to revisit later and take detailed notes.

After you have conducted your research, showcase your findings. Sharing results with your team makes customer research even more impactful — customer opinions matter at every level of the business and every stage of the product development process . This template will help you convey your top takeaways in a presentation.

Customer research has long been a core tenet of product management — and will continue to be. Templates like these will help you streamline your research process so you can focus on interacting with your audience and distilling insights from what they share.

When you are ready for a more comprehensive solution beyond simple templates, give idea management software like Aha! Ideas a try. With Aha! Ideas, you can crowdsource feedback via ideas portals, engage your community with empathy sessions, and analyze trends at the individual, organization, and segment levels. This helps you prioritize customer feedback with ease and promote the ideas that support your business goals directly to your product roadmap. (Note that you can use Aha! Ideas as a standalone tool, but many of its features are also available on Aha! Roadmaps . This makes it a great choice for teams seeking an all-encompassing product development solution.)

Discover exactly what your customers want. Start a free Aha! Ideas trial today.

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Customer Research: The Most Underappreciated Strategy In Your Toolkit

Customer research has far-reaching positive implications for businesses. This is a step-by-step guide for how to leverage the tool.

These ecommerce scenarios all have something in common:

• Glossier names its cult-hit cleanser “Milky Jelly” 
• Harry’s launches a new deodorant and shifts from a shave brand to a personal care   
• Katelyn Bourgoin positions Charboyz meat kits as a social solution for suburban dads
• A maternity brand figures out how to present its proprietary sizing, which improves conversions and decreases returns 

The answer: good customer research. 

Each of those bullets came about because the brand or founder listened closely to stories their customers and prospective customers told. 

These brands know something too few ecommerce companies have taken to heart: customer research has far-reaching implications for businesses. With the right resources and process, it’s possible to collect meaningful insights that help you improve many areas of your business, from marketing to customer support to product development. 

And although it may seem intimidating first, the time and financial investment customer research requires is manageable for most teams — especially in light of its ROI. 

This article is a step-by-step guide to formulating a research plan, interviewing customers, and turning the qualitative data you collect into meaningful improvements for your brand. 

The rest of this articles outlines how to:

• Think about the benefits of customer research
• Put together a research plan
• Run effective customer interviews
• Gather indirect customer research
• Put your research data to good use

What is customer research?

Customer research is a structured way to find out why customers do and don’t buy. It’s an effective way to step out of your head and into the buyer’s journey, so you can provide better products and experiences. 

Why is it especially important for ecommerce? 

For ecommerce leaders, the biggest benefits of customer research include: 

• Getting outside the jar 
• Knowing what to improve (instead of guessing)
• Providing better customer-centric experiences

Customer research gets you outside the jar

Imagine sitting inside a jar (an empty one) and trying to read the label. Even if you could make out a letter or two, or perhaps a fine print medical warning, it’d be impossible to piece together what the whole label looks like from the outside.

That’s a bit like trying to imagine a new customer’s experience from inside your brand. You know your site inside and out, and that’s a strength in many contexts. But it’s also a weakness because your proximity to the brand makes it impossible to know what it’s like for new customers to hit your homepage or try to purchase something.

You’re stuck inside the jar, and one of the best ways to get out is customer research. 

But that’s not the only benefit. 

Customer research helps you identify data-backed improvements

There’s a marketing approach Katelyn Bourgoin calls “ liquor and guessing .” It’s the old formula of gathering smart, creative people in the same room, giving them a cool product to work with, and letting them guess their way (occasionally with liquor) to more sales. 

While that occasionally works, it’s a bit like throwing a dart with your eyes closed — you could hit the board, but it’s not likely. Customer research provides a more guaranteed path. 

Some of the most common benefits folks cite is clarity around their messaging strategy — who to speak to, how to speak with them, and when to do so. 

Just wrapped up my 1st customer interview. 🕺Walked away with an entirely new approach, at least 10 content ideas, and a plethora of vocabulary I hadn't used before. Future copy has written itself. @KateBour never stop pushing this narrative. This changed my marketing world. 🙏 — Kristen LaFrance (@kdlafrance) May 2, 2019

But depending on what you set out to discover, customer research can do way more than that. 

Harry’s for example, crowdsourced some of their newest products from current shoppers. Jaime Crespo, GM at Harry’s, told Retail Brew the brand had 1,600 customers call in or send emails requesting deodorant. And 120,000 customers said in a survey they wanted to see deodorant or antiperspirant. Harry’s leaned into this.  

Crespo says, “We have a very strong, close connection with the customers. So we start talking with the customers and asking them, okay, why do you want a new product in deodorant? What’s wrong with the products that you’re currently using? And that’s how we develop our proposition.”  

This ties into the third major benefit for ecommerce brands.

Customer research shows you how to build better customer experiences

One of the biggest strengths of ecommerce, and especially DTC, is the unique opportunity brands have to influence or control every aspect of the customer experience . 

And better experiences pay off:

• PwC surveyed 15,000 consumers and found 65% of them said they were more strongly influenced by a positive experience than a great ad campaign
• Coschedule found marketers who do audience research at least once per year are 303% more likely to hit marketing goal
• McKinsey says brands that improve the customer journey see revenue increases as much as 10-15% — while lowering service costs by 15-20%

When you start dialing in the customer experience , metrics like conversion rate, lifetime value, average order value, return on ad spending, and others improve as well. 

Customer research shows you, with astonishing clarity, how visitors are experiencing your brand. Meaning, it also shows you where to improve, where to double down, and where missed opportunities are, too. 

Here’s how to get started. 

How to build a foundation with a one-page research plan 

If you’re doing DIY research for your brand (DIY as in not hiring outside) help, start with a plan. This doesn’t have to be complex, either. 

To put together a one-page customer research plan, you’ll want to define:

• Your goals for researching
• Who will “own” the research
• Who you’ll talk with 
• What success looks like 

Below are each of those pieces in more detail.

What are your goals for customer research? 

While it’s admirable to simply want to know your customers better, your research will be far more effective (read: impactful for a specific area of business) if you start with some goals.

I say “goals” because Hannah Shamji, Customer Researcher , emphasizes every customer research project should have two goals:

• A research goal
• A business goal

Your research goal is typically in the form of a question. Be careful of going too broad here though. Shamji says a question like “why are customers buying?’ is too vague to be useful. It’s not something you can actually measure and answer. Instead, try something like, “why are customers in the past 6 months buy or not buying?” This is more specific, measurable, and directive. 

Once you have your research goal, your business goal outlines how you’ll use the research — what decision it’ll drive internally or what it will inform. Hannah explains this as, “stepping away and peeling back the future state of where this data is going to live and be used.” For example, if you want to know why customers have and haven’t bought in the last six months, perhaps you’re looking to improve new customer conversion rates.  

Who is going to be doing the research?

Ideally, you want to appoint one person to lead the research efforts. This person “owns” the research project. 

They can be an internal team member or an external expert, like Shamji or an agency. The point is, you identify one person who’s responsible for running the research and organizing the findings. This, among other things, ensures the research actually happens. 

How will you find customers or prospects to talk to?

Once you have your goals and your project owner, you now need someone to research. 

Figuring out who that “someone” is involves two steps: 

• Identifying which type(s) of customer you need to talk with
• Outlining how you’ll engage them 

1. Identifying who to talk with 

You’re no doubt aware you have different types of customers. These different types include distinct personas with distinct needs. Your different customer types also include action-based segments — customers who just purchased, signed up for the email list, or canceled a subscription. 

Each type of customer provides a different type of insight. For example:

• Prospective visitors can help you understand why folks come to your site, what they’re looking for, and where they get tripped up.
• Customers who just purchased can give insight into what triggers and contexts motivate other new customers to buy. 
• Repeat customers can help you see what’s both delightful and frustrating about the experience you’re providing.
• Higher average order value customers can provide insight into what drives brand fanatics.  

And that’s just to name a few. 

Ultimately, who you focus on depends on your research question. Let’s say you’re a DTC drink subscription company, and you want to understand why subscribers canceled their recurring soda subscription last month. Your goal is to reduce churn. To do this research, you’ll want to speak with subscribers who canceled last month and dig into why they moved on. 

The general rule is, speak with the customer segment or prospective customer segment that’s best equipped to answer your research questions. 

2. Outlining how you’ll engage them

Once you know who you’d like to talk with, you can identify how you’ll reach out to them.

If you’re speaking with existing customers, this may be as simple as an email. 

If you’re speaking with prospective customers, you’ll also want to consider where to find folks and how to qualify them as well.

Note: I’ll get into the logistics of both of those below. For now, simply write how you plan to reach out to folks. 

What types of research make the most sense?

The next planning decision you’ll want to make is, “What type or types of research will give us the best data for our question?” There are quite a few types of research, and they all have strengths and weaknesses. 

Here’s one helpful framework:

• Direct vs. indirect : Direct research involves actively reaching out to customers. Think interviews, online surveys, questionnaires, user testing, and similar primary research methods. Indirect research is more passive. These are methods like social listening (gleaning data from social media) or buying market research. 
• Qualitative vs. quantitative: Qualitative research methods focus on substance and answering “why is this the case?” Quantitative research methods focus on numbers and answering “how often is this happening?” Most research methods excel in one area or the other. But some methods, such as surveys, can help you answer both. 

You can plot most research methods (interviews, surveys, polls) along those two axes: 

Keep in mind combining multiple types of research is often an effective way to gain clarity around your research question.

For example, if you want to know why website visitors aren’t converting on the homepage you rolled out last month, interviewing prospective visitors will help. But so will looking at heatmaps and path analytics in Google docs. 

Non-interview research options 

The rest of this article will focus on interviewing customers because this is one of the most impactful research methods , as Katelyn Bourgoin illustrated: 

That being said, you may sometimes want to start with research options that aren’t interviews. For example, when you’re:

• Not sure what questions you need to ask or who could answer them 
• Needing to gather a large volume of data points quickly around a specific question 

In those scenarios, non-interview options include: 

• Customer surveys: Via email or form add-ons 
• Live chat transcripts : 29% of consumers use or plan to use chatbots to shop online. If you’re using chatbots, there’s a wealth of qualitative data sitting in those conversations. 
• Customer support: The people answering emails, calls, and chats from potential customers or customers every day are a rich source of insight . Don’t neglect what they know. 
• Forums/communities : Listen in wherever your potential customers hang out — Quora, Slack groups, Facebook communities, LinkedIn groups, local meetups, etc. This is a helpful way to find common pain points and desires. 
• Social Media: Twitter, Instagram, Pinterest, TikTok, Clubhouse, Facebook…if your potential customers are chatting there, there’s something you can learn from lurking. 
• Product reviews: Mining competitor reviews, similar products on amazon, or browsing aggregate review sites can indicate where customers are most fed up and what they may be looking for instead. 
• Audience research tools. Several tools, such as SparkToro , UserInput , and Hotjar , are specially built for figuring out who your audience is and what they’re interested in. 

Again, we don’t go deeper on each of those types of research here because that could be a book in itself. But keep in mind these can be a good starting point in certain scenarios, and they’re often useful to layer on top of interviews for additional context. 

For example, Natalie Thomas, Director of Strategy at The Good, explains we always start with the journey: the path the visitor takes, where they’re coming from, and what their mindset is. 

If we were working with a glasses company, we might ask, “what keywords are people searching for? Are they landing on your site because they’re looking for cute glasses? Are they looking for blue light glasses, or are they looking for acetate glasses, or are they not looking for glasses at all?” This kind of journey analysis diagnoses any problems, which helps us form specific research questions and business goals. With this method, we can ensure we’re asking the right question and focusing research on points of highest return.  

How to Conduct Customer Research to Improve Customer Experience

How do you define “enough” and wrap up the project?

The last piece of your plan is defining “enough.” Or, what success looks like. This is identifying, “we know we’re done with this phase of research when…” 

There are a few ways to benchmark this:

• After x amount of weeks
• After talking with y customers
• After identifying z trends 

While customer research ideally becomes an ongoing effort at your brand, it’s useful to know when each piece of research wraps up. So, make sure and set a finish line. 

How to conduct effective 1:1 customer interviews

Once you have a plan, you can start executing your research. This part is a lot of logistics — and a lot of fun. It involves:

• Reaching out to potential interviewees
• Formulating interview questions 
• Running interviews 

Those steps sound simple enough, but many folks get tripped up here. Do you pay people to participate? What do you say in the emails? And, for the love, what do you say in the interview??

Here are some answers based on our experience and the experts we talked with. 

First, reach out to your target audience and get them to engage

The plan you built above identified which customer segment you’ll interview. Here’s where you start engaging that segment. Some questions you might run into here include:

• How many people do I contact?
• Do I pay or incentivize them to participate?  
• How do I qualify them?
• What do I say when I email people?
• How do I not lose my mind scheduling it all? 

They’re all good questions! Let’s take them one-by-one. 

How many people do I reach out to? 

It’s unlikely every customer will accept, so email 1.5 to 2x the number of customers you’d like to wind up talking to. 

If you’re doing customer interviews, aim to speak with at least 5-10 people. Jess Nichols, User Research Leader and Experience Strategist, recommends , “For exploratory research, like interviews, I aim for eight to 10 participants per segment. This number ensures you can identify patterns, similarities, or differences in your participants’ responses and allow you to dive deeper into nuances you may discover during research.”

So, if you’d like to speak with 10 customers, email 15 to 20 with an interview request. 

Do I use incentives? 

This depends on your budget, the segment you’re trying to reach, and whether you have time to try a no-incentive approach first (if you hear crickets, you can always add in an incentive later).

If you’re interviewing existing customers, particularly brand enthusiasts or loyalists, you may not need to sweeten the ask. But if you’re trying to connect with prospective customers, an incentive will generally speed up your timeline and up your response rate.  

If you opt for incentives, Hannah recommends you use between $20 and $50 per person . This “encourages sign ups and avoids no shows without biasing customers to only give positive insight.”

How do I qualify research participants? 

If you’re pulling from your existing customer base, you may be able to use analytics you already have to qualify participants. For example, the date they purchased or canceled (if they’re subscribers), average order value, types of products they’ve bought, and so on. 

If you’re rounding up prospective customers who have never seen the site before, you’ll want to qualify them in some sort of a screening survey. For example, we once worked with a paint company. This paint was five times the price of normal paint because it was low VOC, environmentally friendly, made in the US, and had many other benefits. 

Natalie explains that, when she qualified prospective paint customers for research, one of the things her team asked about was pricing sensitivity. She notes, “if you get the wrong person in the door, they’re going to say, ‘I would never even consider this,’ and the rest of your research is null with that individual.”

Most researchers opt to qualify participants in a screening survey (e.g. using Google forms or Typeform ). The important thing is you do qualify your participants by some means. Remember, the folks you speak with should be the ones who are best equipped to answer your research goals. If you cast a wide net with no qualifiers, your findings will be far more muddied and conflicting — if they’re useful at all. 

What do I say when I email people? 

Think of the emails you like to receive and read. They’re probably clear, concise, and have a bit of personality to them. That’s the kind of email you want to send here, too. A good interview request email will:

• Have a clear subject line. If you’re offering an incentive, feel free to lead with that. For example, “Laura, $25 Amazon gift card for your thoughts…” If you’re not incentivizing, aim for a subject line that’s both interesting and accurate. Perhaps, “How you can help us improve [x]” since folks like opportunities to help. 
• Explain why you’re emailing. Clearly explain what you are doing (research) and what you’re not doing (pitching a sale or some other hidden agenda). 
• Explain why you’re researching. Briefly say why you’re doing research and how their participation will help.
• Set expectations for an interview. Define how long the interview will take, what the person needs to do to prepare (usually nothing), and whether it’s face-to-face, video, or voice-only. You may want to mention that any data you collect won’t be sold or shared outside the company as well. 
• Equip the reader to take action. A good way to do this is to include a link for the respondent to book an interview slot, e.g. via Calendly . 

For a good starting point, check out Hannah’s email template: 

How do I schedule it all? 

Whoever is leading this research probably has other to-dos on their plate. To ensure interviewing customers won’t completely wreck their (or your) schedule, it’s best to:

• Batch interviews on certain days
• Schedule batches back-to-back
• Use a tool like Calendly to prevent calendar conflicts

This approach doesn’t just help you schedule, it helps you interview well. Hannah explains , “When you stack interviews like this, it triggers the compound effect and helps you immerse in the world of the customer. By the third interview you’ll be asking sharper questions, spotting more nuances and drawing richer customer insight.”

One other tip: batch interviews but leave about 15 minutes between each one. This will give you time to transition (read: take a snack break). It’ll also ensure it’s no big deal if you need to run five minutes over to let an interviewee finish a specific thought. 

Interview customers to collect the data (using the Jobs To Be Done Framework) 

When it comes to running each interview, it’s helpful to think of it in two parts: 

• Pre-interview prep
• During interview guidelines 

Pre-interview prep: formulating questions  

The biggest task here is coming up with a list of potential questions you can ask. 

One popular method is formulating questions around the Jobs To Be Done (JTBD) framework. There are several books on this topic, and I’ll spare you all the nuances of it here. But the basic premise is customers “hire” your products or services to fulfill needs in their life. For example, I recently “hired” a Ruggable rug to reduce my mental load — I don’t want to worry about rug fuzzies or stains for the next half-decade. Other folks “hire” certain meal kits to take meal planning off their plate or to feel more confident (e.g. by losing 15 lbs). 

Understanding what job customers hire your product to do, what else they considered to fill that job, and what drove them to try and hire it out in the first place can yield rich qualitative insights. 

To find those insights, many interviewers ask questions about: 

• Triggers: Triggers are what make potential customers go, “Hey I have a need here.” For example, a trigger for needing a new mattress may be getting married or adopting a dog who sleeps in the bed. 
• Deciding: Making a decision usually involves many desires, anxieties, and hesitations. For example, price, social perception, durability, and so on. 
• Looking: Before purchasing, customers consider alternatives to your product. These may be the competitors you have in mind — or they may not. If I need new cookware, I may consider Caraway, whatever is on the kitchen aisle of TJMaxx, or asking my grandma if she has extra cast iron. 
• Purchased : Those who chose your brand have a reason for doing so. Oftentimes, that reason isn’t particularly rational or logical either. 
• Using: Identifying friction points, moments of delight, and what customers expect next can all help you craft better experiences. 

Keep in mind, you won’t get through all of your template questions in each interview. In fact, you shouldn’t necessarily aim to. Remember to tailor your conversations around the specific research and business goals you have in mind. 

During the interview: listening for emotions, taking notes, and what not to do 

When you first hop on the phone or video, you want to do a few things right off the bat:

• Set expectations around length; reiterate what time you’ll wrap things up
• Reassure the interviewee there are no right or wrong answers (it’s about collecting their story and experience)
• Let the interviewee know if they don’t want to answer a question, they can decline
• ASK TO RECORD

Seriously, don’t forget that last one. There are few things more disheartening than wrapping up an interview and realizing you didn’t hit the record button (facepalm). Zoom is a great option for storing and recording interviews if you don’t already have one. 

Once you’ve done a quick intro, your goal is to listen way more than you talk. Here are a few things, in particular, you’re listening or watching for: 

• Emotional language:  Katelyn Bourgoin, CEO of Customer Camp, explains , “The interesting thing about how people buy is that 95% of the purchases that we make are actually driven by unconscious emotional triggers.” One of your goals in the interview is to identify these triggers. Listen for words like “angry” or “frustrated.” 
• Shifts in tone or volume: Pay attention to how someone says something, not just what they say. Shifts in tone can indicate excitement or disappointment. And emphases on certain words underscore their importance. 
• Shifts in body language: Changes in facial expression or body posture can all indicate strong underlying emotions. Keep an eye out for these, too. 
• Stories: Our buying decisions are highly contextual. They’re embedded in our emotions, daily lives, and goals. Stories help illuminate these factors. 
• End goals: How did they hope buying a product or service would make them or their lives more awesome? 
• Underlying motives: As Katelyn pointed out, we’re not always aware of why we buy. Listen for underlying motives in the stories the customer tells. Don’t take every statement at face value. 

Ultimately, when you identify these clues, you’re pinpointing insights you’ll use later on when you apply your research. “The secret to identifying insights lies in understanding the human brain works on two levels and that most of our behavior is influenced by subconscious motivations in the brain. We’re simply not consciously aware of why we do what we do,” Daryl Travis, CEO at BrandTrust told me. To draw out unconscious behaviors, he recommends asking for stories. “…ask them to share in story form their experiences aligned with what you’re trying to understand. Inevitably, they will share the experiences that are emotionally intense and therefore most relevant.”  

Also, a quick note on taking notes: 

Ideally, you’re taking minimal notes during the interview (because you’re recording), and this will help you tune in to the other person. Bob Moesta, President and CEO of Re-Wired Group (and pioneer of Jobs-To-Be-Done), only writes down the words he wants to follow up on and unpack, for example. 

The final result looks like a treasure map. 

Like Bob, you’ll want to dig deeper into certain words and cues throughout the interview. Here are some follow-up questions that are particularly helpful for drawing out richer insights: 

• Why is that? 
• Can you tell me more about that? 
• What led you to that decision?
• Could you walk me through your thought process there?
• What else was going on that made that the right choice?
• Sounds like that [need/want] was important to you. Why is that? 
• That seems to bug you. I bet there’s a story there. 
• You seem pretty excited about that. Why was it a big deal?  

Lastly, when you’re running the interview, you want to check yourself for these common mistakes:

• Forgetting to record (seriously, it’s the worst) 
• Talking more than you listen 
• Asking leading questions
• Asking either/or yes/no questions
• Formulating statements as questions
• Accepting an answer at face value (use those follow-ups!)
• Quickly filling the silences (let these prompt the interviewee to speak)

The leading questions thing is important, and it’s one of the more difficult to keep in mind during your first interviews. For example, I once asked, “what made this product enjoyable?” That question is leading because I assumed the person found the product enjoyable. Turns out, she didn’t! Two better questions would’ve been, “Tell me how you used this product” or “what was your experience like using this?” 

Likewise, either/or questions are leading because they assume only two possible outcomes. So are double-barreled questions because they trap the interviewee. Natalie explains, “Sometimes a double-barreled question is, ‘How much do you love our product and our emails?’ And, well, they might hate your product and really love your emails. So now they can’t even answer that appropriately.” Avoid these, too.

These mistakes may take some practice to spot, and you’ll get better with practice. For your first interviews, do your best to stick to open-ended questions that keep your assumptions out of the picture and give the interviewee plenty of room to tell their story. 

How to map research data to real brand opportunities 

All too often, great research winds up on dusty digital shelves. It’s not because brands plan on wasting the effort they’ve gone through. It’s often because of sheer overwhelm.

“The most overwhelming aspect of research can be the sheer amount of reading that’s required to understand the material,” writes Lucy Denton, Senior Product Designer at customer research app Dovetail . “The average one-hour interview transcript might contain 10,000 words and you’re looking at half a dozen of these, and that’s before the workshop output, diaries / journals, visual documentation, or observation notes.” 

The good news is, there are a few steps you can take to help your future self use the data you collect. These steps include:

• Consolidating your research into one central location
• Organizing your research with tags 
• Socializing your research with various teams 

Then, once you do those things, you’ll be in a good position to analyze your findings and: 

• Identify big picture trends
• Highlight rich customer personas
• Map observations to improvements
• Prioritize improvements

Let’s look at the help-your-future-self logistics first. 

Consolidate, organize, and socialize 

The first steps of putting data to use include creating a home for it, organizing insights, and sharing them with others. 

Consolidate: create a home for the research

Pull stuff in one visible, accessible place. This could include:

• A shared Google Drive
• A dedicated customer research Slack Channel
• An Airtable or Notion Base
• A research tool such as Dovetail

Whatever you choose, it needs to be something that (a) keeps your research in mostly one place and (b) is accessible to the appropriate team members. 

Erik Goyette, Senior UX Researcher, Shopify: “To catalog our research, we’ve built a research library. Anyone across the company can go there to find our reports, slide decks, and recordings of our presentations.” (They use Dovetail.)

Keep in mind, you’ll want to take your recorded interviews and generate transcripts of those. This will make reviewing and organizing the research much, much easier. Useful transcript tools include Rev and Descript . Both the original recording and the transcript should live in whatever home you create for research. 

Organize: make the research easier to consume

Once your research has a home, you’ll want to use some system to keep any observations you pull out of transcripts segmented as well. One easy way to do this is to use tags. 

These tags should highlight key insights and relate to the business goal in your original research plan. Hannah explains, “You already know what the data is going to inform…based on that you’re going to start to get ideas of types of insights you need.” Insights could be top objections, new features, search motivations, pain points, customer journey points, and so on. 

How else do you know if you’re looking at an insight? Here are some indicators you’ve found one:

• It’s grounded in data . You can point to the sentiment in the research/transcript and not just your memory.
• It occurs often . Multiple interviewees mention it.
• It’s embedded in high emotion . The point has some strong emotion or sentiment attached to it.
• Useful to the business . The point maps to an opportunity — usually, to improve some aspect of the customer’s experience or journey with the brand. 

Use some sort of system to highlight, grab, or tag parts of your transcripts that fit these bullets. 

And for the perfectionists out there, keep in mind there’s no one right or wrong way to tag your research. A minimal approach may work well for a lean team just starting research whereas something more extensive may be ideal for a larger team with thousands of inputs. 

Some pointers for developing your approach:

• Start minimal : You can always add more process later. For now, pick something that’s intuitive and has a low learning curve for other team members. 
• Functional : Any tagging system you choose should help you use the data. Relate tag names to business goals or end uses. 
• Visual: Colors help team members quickly sort and bucket insights. Don’t go overboard (12 colors is a bit too much, yeah?) but do use visual cues. 

Socialize: share what you find with others

While it’s good for you to be knee-deep in the research, it’s even better for your teammates to jump in there with you, too. Silo-ed data is crippled data, so make sure various team leads can access it. (Note: if the research contains any sensitive customer data, be thoughtful about how you secure and distribute this.) 

Three reasons it’s important to distribute, or socialize, what you find: 

• Each team will see something different. A customer service team member will spot a different opportunity or use case than a marketer. That’s a good thing.
• You’ll prevent redundancies. Socializing data also prevents various teams from running similar surveys (and frustrating customers in the process). 
• You’ll enable customer-centric decisions . Executives and team leads can’t make customer-centered decisions if they don’t have access to the customer’s experience. 

Remember, customer experience spans every team and aspect of your brand. So, give every team access to what the customer is experiencing so they can contribute ideas for improving the holistic journey. 

Identifying real insights 

Once you’ve organized, tagged, and distributed your research, you’re in a good position to step back and analyze. Researchers sometimes call this finding the “arc of the data” — the overall trends that move like a current through what you’ve collected. 

You likely have some gut ideas based on the research you’ve done. But you mustn’t immediately run with these. For one, that’s a good way to introduce bias. “Attempts to merely rely on human memories and impressions from interviews are likely to introduce bias. And even if we did keep notes, when we consume raw data directly, we’re in danger of unconsciously giving weight to certain points,” writes Lucy Denton . “From there we’ll likely form misleading opinions that lead to impulsive decision-making, and eventually, take the whole team down a path that focuses on the entirely wrong outcome.”

Relying on gut alone in research (much like in testing) leads teams on wild goose chases. Instead, take a step back and look for overarching trends like customer segments and potential brand improvements. 

Look for customer segments or personas

One of the great things about qualitative research is it helps you build rich and useful customer personas. 

Quantitative data like Google Analytics reports can tell you whether customers are primarily on mobile, what region of the country they come from, and other data or demographic points. But if your customer personas stop there, they’re not going to be particularly useful. 

“The first way to create a buyer persona that doesn’t suck, is to actually talk to your customers,” Adrienne Barners, founder of Best Buyer Persona told me. “Data Analytics and survey data is a wonderful way to validate what your customers are saying, but starting with audience research and qualitative data makes for a richer and more accurate persona.” 

What does a richer persona look like? It takes motivations and behavior into account. “Segmenting people according to job title, age, or gender, doesn’t tell you why they bought your product. Think of segments as ‘jobs’ or the reason they purchased your product and how they use your product,” Adrienne explained. “Segmenting in this way means you’re able to broaden your segmentation while keeping it focused on buying behavior.”

Two related perks of building rich ideal customer segments: 

• They’ll improve your journey map. The best journey maps highlight what personas think, feel, and experience at every point . This is exactly what you can pull from rich customer segments and interview data. 
• They’ll help you make sense of conflicting data . It’s not uncommon for one person to say they bought for x reason while another person explains they bought for y reason . Rich segments help resolve that tension. 

Remember to keep an open mind as well! When Katelyn Bourgoin and her husband started researching potential customers for Charboyz , they assumed their main persona was a farmers market shopper. Turns out, it’s what they wound up calling Suburban Jock Dads. This persona, Katelyn explained on the DTC Voice of the Customer podcast , “probably used to be somebody who would go out every weekend prior to having kids, and now was looking to rebuild that social community through his now suburban life.” 

And so, when the Bourgoins launched their first box, they didn’t position it as a food box. “We positioned it as a virtual barbecue,” Katelyn said because that fit their ideal persona much better. 

This leads into the next thing you’ll want to do with your insights and personas: map those observations to areas of your business. 

Map observations to areas of the business

The conversations you have will rarely tell you exactly what to do with your business. As in, a customer isn’t going to say, “You know, if you had advertised your fitness gear to me as suiting up for ‘me time,’ I totally would’ve bought it.”

Nope. It’s part of your job to identify insights and then map those insights to potential improvements in your brand. 

This involves:

• Hypothesizing potential improvements
• Prioritizing and testing those improvements

Hypothesizing improvements

Because you’re talking with customers about their experience and journey, insights you collect can apply to any area of your business.

Some common applications include:

• Ads: When you know what context and motivation brings potential customers to you, you can do a better job engaging them — especially if you know the words and phrases (“voice of customer”) they relate to. 
• Email sequences: If Ruggable had interviewed me after I purchased one of their rugs, they’d know prompting me to upgrade to a 9×12 cushioned rug pad (+$130) before the product shipped would’ve been a more effective post-purchase email CTA than asking me to purchase another rug…before I’d even received the first one.  
• Content: The pain points your potential customers wrestle with, the hesitations they faced when purchasing, the questions they had about using it…these are all content opportunities. Adrienne Barnes writes , “The first thing I look for when turning audience research into a content strategy is customer questions. Customers often need help learning how to use the product or the benefits of a feature.”
• Social media: Likewise, the same sentiments that inform your articles can inform your social posts. What contexts can you show your products in? What rave reviews will resonate most with your target personas and what you know about them? 
• Product images: Knowing how customers use the product in their everyday lives can inspire you to produce more relevant and contextual imagery for your site and product galleries. 
• Customer support: It may be you discover new common pain points and how to head them off, which reduces your customer support load. Or maybe you identify a channel where customers feel particularly helped and decide to lean into it. 
• Product design or development: If customers regularly express a need you don’t address or a frustration with your product/service, there may be a good reason to prioritize the improvement. 
• Wayfinding/ Improving poor UX : Understanding what brings customers to your site and what needs they’re looking to fill once they’re there can inform how you structure navigation, what filters you provide to sort products, product category names, and so on.

For example, Bob Moesta and Katelyn Bourgoin did a live customer interview with Amanda Natividad who recently purchased a Peloton. Moesta and Bourgoin wanted to understand why and how Amanda decided to buy the premier stationary bike. Some insights and hypothesized improvements they uncovered were:

• It was too hot to walk outside . This is one reason Amanda became interested in a bike. Could this insight inform advertising strategy in geographic areas where it’s often too hot or too cold to exercise outdoors?
• Amanda didn’t read reviews; she trusted word-of-mouth from friends . Could incentivizing referrals and word-of-mouth drive higher conversion rates for Peloton? 
• Mental health was a huge purchase motivator . Perhaps one of Peloton’s biggest competitors isn’t other exercise bikes or gyms, it’s counseling and therapy.
• She didn’t consider herself a “workout fanatic.” Yet most of Peloton’s ads feature chiseled, thin models. Could more diverse product imagery help prospective buyers identify with the product more readily?

And these are all hypotheses from one interview! Imagine what you could find in a whole set.

Prioritize and test potential improvements 

Once you have a handful of hypotheses, you can start crafting experiments and testing improvements. 

This is an important step. “[Interview] Data is never going to tell you exactly where to go because it shouldn’t be the only spoke in the decision wheel,” Hannah Shamji cautions. “It’s going to help you improve and inform and drive…but it shouldn’t be the only deciding factor.” 

Put another way, research gives you evidence for what to test and which directions to test in — but you still need to test.  

But how, out of all your hypotheses, do you decide where to start? Two tips on picking which tests to prioritize: 

Start with what customers prioritize

According to research by PwC, 80% of American consumers point to speed, convenience, knowledgeable help, and friendly service as the most important elements of customer experience .

If your research indicates any major holes in those areas, consider starting there. 

Work on your Peak-End Moments

Another option to improve the critical moments of your customers’ experiences. 

It’s tempting to think each part of a customer’s experience is equally weighted — as if the ad that brought them to your site is 1 point and the header they see once they get there is another one point. 

But psychology indicates this isn’t how we recall interactions. Rather, we pay extra attention to the intense highs/lows and final moments of any experience. This is called the “peak-end” rule .

“Recognize the brain doesn’t remember everything. It only stores the experiences it deems—via emotional intensity—that are worthwhile to store for future reference,” Daryl Travis advised me. “Once you identify those experiences—Behavioral Economics refers to as Peak-End moments—then you know what are the real opportunities for brands.” 

Figure out the common peaks and ends from your interview data. Then, prioritize improving those pieces. 

Go ahead, kick off your research project

Start with a plan, find your participants, and create a home for the data you collect. From there, analyze your body of research and map your findings to areas for improvement. 

Then, tell us the most interesting thing you learned! 

Remember, the time and effort are worth it — customer research is one of the most effective ways to understand what your customers experience, identify ways to improve that experience, and boost all kinds of related metrics from conversion rates to lifetime value, and more.

If you still aren’t sure where to start with your research, we can help identify areas on your website that aren’t converting. Or try building a research plan based on the identified pain points in a custom 5-Factors Scorecard™ .

Find out what stands between your company and digital excellence with a custom 5-Factors Scorecard™ .

About the author, laura bosco.

Laura Bosco is a former Content Marketer at The Good and freelance writer. She helps translate thoughts, opinions, and client experiences into written products that are both entertaining and educational.

Customer research: What it is and how to get started

• Startup Business-tips

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When you are starting a business, one of the biggest questions will be around who your customers are and how your product solves their problems. Even if you have a great idea, startups can’t succeed without a valid understanding of who to market to and what their pain points are. Customer research should be one of the first steps when concepting and developing your business–even for founders who are deeply engrained in the space they will be working in, conducting research can provide valuable feedback which can inform the direction of your business.

Customer research helps businesses understand who their potential customers are, what they care about, how they want to be marketed to, and much more. There is an assumption that research takes too much time or effort, but there are easy ways to get research done quickly. Even founders and startups with no research experience, a little time, and little to no budget can conduct some research. As you grow, you can scale your research operations with your customer base, so you never get out of touch with your core customer needs.

What is customer research?

Customer research allows businesses to better understand the needs and motivations of their customers (or potential customers) and can be conducted through a variety of methods, including in-depth interviews, surveys, observations, and focus groups. Customer research is a broad category, and startups and businesses can tailor their research to ensure it’s answering the most important questions for their teams. For example, an early-stage startup may be most interested in learning if their product fits a need and who within a company would be their target customer. A more established company that has already developed a product and has customers may use research to find out how their product is being used or identify missing features.

Some key questions that customer research often answers include:

Who are my target customers?

What’s my product-market fit?

Is the end-user the same as the decision maker?

What are my customer’s pain points?

What products are they currently using?

What is missing from the products they are currently using?

How do my target customers like being marketed to?

What are the key benefits of my product?

What features would customers most like to see in my product?

How much are customers willing to pay for my product?

By asking these questions, customer research can inform not only marketing and sales efforts but can also help businesses prioritize product features, make pricing decisions, and more.

Easy customer research methods

Research can be split broadly into two categories: Qualitative and quantitative research. Qualitative research answers “why” or “how” questions, and produces data that cannot be easily measured, such as opinions or long-form thoughts on why a customer finds your product useful. Quantitative research answers “how many” questions, and produces measurable, directionable data, such as the percentage of survey respondents who answered ‘yes’ to a question. Generally, surveys and some types of observation are quantitative, while unstructured interviews gather more qualitative data.

While there are several other methods for conducting research that more advanced researchers may use, such as focus groups, below are some easy methods to get your research journey started.

Surveys are an extremely useful tool as they can gather quantitative data, such as how often your customers interact with your product, or which future potential features are most important. Surveys can range from simple to very complex, but we recommend that businesses just starting in research create a simple survey with the most important questions to your business.

There are many free survey software tools available that produce survey links that can be sent out to your customers or prospects via email or social media. Alternatively, if you want to reach respondents outside of your own contacts, you can utilize sample providers who will charge a fee for each respondent who completes your survey. This option is more expensive but can provide insights from those not already familiar with your product.

Interviews conducted in person, over the phone, or on a video call are another easy, low-cost way to conduct customer research. Interviews allow the researcher to interact directly with one customer or potential customer at a time, and they can be unstructured or semi-structured, which allows the conversation to flow based on the respondent’s answers rather than by following a set list of questions. Because interview answers are generally open-ended, respondents may bring up topics or responses that you wouldn’t have thought to ask about.

Interviews shouldbe conducted one at a time, and all they require is a customer to agree to speak with you. Interviews can also provide feedback that informs a larger quantitative survey–for example, if you find that customer support is brought up frequently in interviews, you can include multiple questions on support in a survey to a wider group.

Observational and product usage data

Observation may include watching how users interact with your product, what steps they take to complete an action, and where they go to look for an answer to a problem. For a tech startup, observation can be as simple as a video call with a customer who walks you through their regular actions in your product following a series of prompts.

In addition to one-off observations, web analytics, product usage or engagement data or clickmaps, which aggregate usage patterns of many customers, can also give you insight into how people navigate your website, use your product and what features they may use in different ways than you expected.

How to get started with customer research

Choosing a research method is only one factor in starting your customer research process. Other items you will want to consider include your research question–what is the core question you are trying to answer? Keeping research targeted and focused on one or two research questions ensures that those most critical questions are answered. You may have a hypothesis or idea about the answer to your research question, but try to avoid writing questions or designing experiments in a way that will only confirm your existing hypothesis.

The research question can also help inform the research method and target audience–for example, if you’re looking to assess product-market fit, interviews or a survey with potential or target customers would be helpful. If you are starting to develop your product or expand its features, the “Jobs to be Done” methodology can help assess why users would choose or “hire” your product over a competitor.

No matter where you start with customer research, having some directional data with which to develop your product and business plan is better than going off of anecdotal evidence or no information at all. Although having a dedicated researcher or research team usually comes when a company is at a later stage, sending out surveys or conducting regular interviews with customers can be relatively simple and cost-effective if you leverage free tools.

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Customer Research 101: Definition, Types, and Methods

Pragadeesh Natarajan

Last Updated: 30 May 2024

12 min read

Table Of Contents

What is Customer Research?

Why is customer research important, types of customer research.

• 6 Customer Research Methods
• How SurveySparrow Can Help

Do you want to improve your marketing or product? Then, customer research can help.

Your customer is at the heart of all your business decisions. In fact, everything revolves around a customer. A business is about having a paying customer, and it wouldn’t exist without one.

The effectiveness of your product or marketing depends on how well you know your customers. When you know your customers better, you can make better product or marketing decisions.

In this article, we break down:

• What customer research is
• Why it’s valuable for your business
• Different types of customer research
• Six customer research methods you can use to refine and grow your business

Customer research (or consumer research ) is a set of techniques used to identify the needs, preferences, behaviors, and motivations of your current or potential customers.

Simply put, the consumer research process is a way for businesses to collect information and learn from their customers so they can serve them better.

Businesses typically conduct customer research to uncover new insights on their customers. They then use these newly uncovered insights to improve their product, craft an effective marketing strategy, and more.

Here are 2 key questions customer research helps you answer:

• Who are my ideal customers? Who is the best fit (or worst fit) for our product?
• What channels can I use to find and communicate with my ideal customers?

Online survey tools like SurveySparrow can help you answer these questions. With omnichannel survey distribution, snazzy data visualization, and 1,500+ integrations with your favorite tools, SurveySparrow simplifies customer research for your GTM and product teams.

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A. How well do you know your customers? Not knowing enough about your customers can cost you time and money.

For example, a recent survey revealed that 46% of customers broke up with a brand because they received irrelevant content pushes.

Successful marketers realize that research is necessary to understand and cater to the ever-changing needs of today’s customers. According to a study by Coschedule:

• Successful marketers are 242% more likely to conduct audience research at least once every quarter.
• 56% of the study’s most elite marketers research at least once a month.

B. You shouldn’t make assumptions about your customers’ preferences or needs. You have to go out there and get opinions from real customers.

C. You need to go beyond your general idea about your customers. The more you understand your customers, the better you’ll be able to serve them with your product or service.

D. If you want to make your product the best in the market, you need to identify any unmet needs and learn how well your product serves the needs of your current customers.

E. Customer research helps you learn more about your customers, both the potential and existing ones. Serving your customers better than the alternatives starts with understanding them better and more deeply.

F. Here are other key reasons why you should research customers:

• Know the Why : Your analytics dashboard merely tells you what your customers do. Only research can help you understand why they do that.
• Validate Assumptions and Best Practices : In most cases, guesswork leads to terrible decisions. Your customers might not need what you think they need. And what works for most businesses might not work for you. The only real way to know is to talk to your customers.

Customer research can be done in two distinct ways: primary and secondary.

Primary research

Primary research is research you conduct yourself. In other words, in primary research, you collect the data yourself. Some examples of primary research are face-to-face interviews, surveys, and social media interactions.

Secondary research

Secondary research (or desk research ) is done by someone else. In secondary research, you make use of data that’s been collected by other people. A few examples of secondary research are forums or communities, industry reports, and online databases.

Primary and secondary research can be further broken down into two kinds of data: qualitative and quantitative.

Qualitative data

Qualitative data is descriptive and conceptual. And the nature of the data makes it subjective and interpretive. Examples of qualitative data include descriptions of certain attributes, such as blue eyes or chocolate-flavored ice cream .

Quantitative data

Quantitative data can be expressed using numbers, which means it can be counted or measured. As opposed to qualitative data, it’s objective and conclusive. Examples of quantitative data include numerical values such as measurements , length , cost , or weight .

Customer Research Methods that Work in 2024 (and Beyond)

Now that you know what customer research is and why it’s important, read on to learn the different consumer research methods you can use to make the most of it.

In a survey, you ask a series of questions to your customers regarding a subject or concept.

You can conduct a survey in person, over the phone, through emails, or online forms.

Here are some advantages of conducting customer research through surveys:

• Quickly collect a ton of insightful data without the high costs.
• The data you collect using surveys is simple to analyze.
• You can ask various questions since you get a wide range of question formats.

When it comes to surveys, it’s all about how you ask. Clear and concise questions can help you get reliable information.

An online survey tool is your best bet for quickly gathering customer information. All you need to do is create a survey with a ready-to-use template and send your customers a link to take it.

If you’re in need of a cost-free and easy-to-use solution for conducting customer research surveys and beyond, consider exploring SurveySparrow . This tool aids in gathering essential data by enabling you to conduct thorough data analysis via its user-friendly and conversational survey format.

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In an interview, you speak directly to your customers and ask them open-ended questions.

• Interviews allow you to have deep, one-on-one conversations with your customers and explore a topic in-depth.
• You can go into the details, obtain data beyond surface-level information, and gather deeper insights.

While interviews allow you to probe deeper into a subject, success depends on the expertise and skills of the researcher (or interviewer) conducting the interviews.

Conducting interviews isn’t easy. It’s time-consuming and costly. However, the information you collect can be invaluable for your company’s growth.

You can meet your customers in person to conduct your interviews. Or you can use video conferencing tools such as Google Meet or Zoom to converse with your customers online.

Your analytics dashboard lets you in on your customers’ actions within your product.

Just a glance at it and you’ll know what your customers do and how they engage with your product.

The irony is that customers don’t know what they want or why. They might think they need something but that might not be the case.

What they say they need doesn’t equate to what they do.

The point is that customer-reported behavior is different from actual behavior. That’s why it pays to track and observe your customers’ behavior.

You can use heatmaps, click tracking, scroll mapping, and user-recorded sessions to gain insights into your users’ actions and behavior.

Focus Groups

In this method, you combine a small group based on certain criteria such as demographic, firmographic, or behavioral attributes.

And you ask this group about whatever topic or concept. It could be about your product, marketing message, or something else that’s related to your customers or business.

The idea is to get them to talk to each other and have meaningful conversations.

A moderator helps facilitate the conversations between the individuals in this group. The moderator will try to draw meaningful insights from these conversations and discussions.

You mainly use this technique to understand a certain topic or subject better.

Competitive Analysis

Studying your competitors’ strategies and tactics is a great way to learn more about the target market and the existing solutions.

You can analyze both your direct and indirect competitors depending on the needs you address and the customers you cater to.

You can conduct a competitive analysis from a marketing or product perspective.

If you conduct your analysis from a marketing perspective, you study your competition’s SEO strategy , landing page copy, blog content, PR coverage, social media presence, etc.

You can also conduct your competitive analysis from a product perspective and analyze your competitors’ user experience, features, pricing structure, etc.

Review Mining

The reviews of you and your competitors are another great way to get inside your customer’s head. This method can be especially valuable if you are a SAAS company.

It helps you better understand your competitor’s strengths and weaknesses as well as your own. This understanding helps you improve your own products and better address the needs of your ideal customers.

This kind of data is easy to acquire as it’s publicly available, and you can get them on:

• Review sites such as G2Crowd and Capterra.
• Forums and niche communities such as ProductHunt, Reddit, Quora, etc.

Why SurveySparrow is the Best Customer Research Tool

SurveySparrow facilitates comprehensive customer research by enabling businesses to efficiently collect, analyze, and act on customer feedback, leading to better informed and customer-centric decisions.

• Collect Feedback Easily : Create simple surveys to find out what customers think about your products or services.
• Understand Satisfaction : Use surveys to figure out how happy customers are with what you offer.
• Learn Buying Habits : Find out why customers buy certain products, which helps in planning what to sell.
• Get Product Opinions : Ask customers what they like or don’t like about your products to make improvements.
• See How People View Your Brand : Understand how customers see your brand, which is important for your marketing.
• Keep Up with Trends : Regular surveys help you stay updated on what your customers want or need.
• Group Customers : Identify different types of customers to target them more effectively with your marketing.
• Improve Customer Experience : Learn where you can make the buying process better for your customers.
• Test New Ideas : Before launching new products, check if your customers would be interested.
• Check Customer Loyalty : Find out if customers would keep using your products or recommend them to others.

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Final thoughts.

Businesses that deeply understand their customers have a huge advantage over the ones that don’t. Period.

Whatever you’re looking to learn or achieve, it becomes a lot clearer with a little research.

When done right, customer research can be your competitive advantage.

Be sure to pick a method that’s right for your situation. What are you looking to learn and achieve? Think through each research method carefully and pick the one that works best for you.

Have you conducted customer research? What did you learn? And how did it go? Tell us about that in the comment section below.

And if you’re looking to conduct customer research through surveys, feel free to check out SurveySparrow .

I'm a developer turned marketer, working as a Product Marketer at SurveySparrow — A survey tool that lets anyone create beautiful, conversational surveys people love to answer.

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Customer Research

What is customer research.

Customer research is conducted so as to identify customer segments, needs, and behaviors. It can be carried out as part of market research, user research, or design research. Even so, it always focuses on researching current or potential customers of a specific brand or product in order to identify unmet customer needs and/or opportunities for business growth.

Customer research can focus on simple demographics of an existing or potential customer group (such as age, gender, and income level). Indeed, these considerations are vital determinants of a product’s target audience. However, such research also often seeks to understand various behaviors and motivators —factors which place a product’s use and potential on a higher level of study. Thus, the goal of such research is to expose clear details about who is—or will be—using a product as well as the reasons behind their doing so and how they go about using it (including the contextual areas of “where” and “when”). Customer research may be conducted via a variety of quantitative and qualitative methods such as interviews, surveys, focus groups, and ethnographic field studies. It also commonly involves doing desk research of online reviews, forums, and social media to explore what customers are saying about a product.

While customer research is usually conducted as part of a design project, it is also often conducted in other departments of an organization. In some cases, customer research is part of marketing—for instance, to ensure that marketing campaigns have the right focus. In other cases, it can be carried out as part of concept development or ideation so as to identify opportunities for future products, services, or features. In any case, such research is an essential ingredient in keeping the end users in clear sight long before the end of any design phase.

Literature on Customer Research

Here’s the entire UX literature on Customer Research by the Interaction Design Foundation, collated in one place:

Learn more about Customer Research

Take a deep dive into Customer Research with our course User Research – Methods and Best Practices .

How do you plan to design a product or service that your users will love , if you don't know what they want in the first place? As a user experience designer, you shouldn't leave it to chance to design something outstanding; you should make the effort to understand your users and build on that knowledge from the outset. User research is the way to do this, and it can therefore be thought of as the largest part of user experience design .

In fact, user research is often the first step of a UX design process—after all, you cannot begin to design a product or service without first understanding what your users want! As you gain the skills required, and learn about the best practices in user research, you’ll get first-hand knowledge of your users and be able to design the optimal product—one that’s truly relevant for your users and, subsequently, outperforms your competitors’ .

This course will give you insights into the most essential qualitative research methods around and will teach you how to put them into practice in your design work. You’ll also have the opportunity to embark on three practical projects where you can apply what you’ve learned to carry out user research in the real world . You’ll learn details about how to plan user research projects and fit them into your own work processes in a way that maximizes the impact your research can have on your designs. On top of that, you’ll gain practice with different methods that will help you analyze the results of your research and communicate your findings to your clients and stakeholders—workshops, user journeys and personas, just to name a few!

By the end of the course, you’ll have not only a Course Certificate but also three case studies to add to your portfolio. And remember, a portfolio with engaging case studies is invaluable if you are looking to break into a career in UX design or user research!

We believe you should learn from the best, so we’ve gathered a team of experts to help teach this course alongside our own course instructors. That means you’ll meet a new instructor in each of the lessons on research methods who is an expert in their field—we hope you enjoy what they have in store for you!

All open-source articles on Customer Research

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Fairy-Tale Data: The Comforting Fiction That Undercuts Your CX Efforts

Rick Parrish , VP, Research Director

Chances are that your organization is lying to itself about the quality of the customer experience (CX) it provides. But this lie is so pleasant, so comforting, that organizations continue to tell it even as the problems it creates pile up.

The lie is based on fairy-tale data — data that tells a charming fiction about the org’s CX. Fairy-tale data comes from two sources:

• Inflated customer feedback scores. Customer feedback data often tells a story that’s more pleasant than accurate, either because organizations consciously manipulate scores or because they don’t follow customer feedback best practices. Scores are manipulated at nearly every one of the 58% of orgs that provide bonuses or other incentives based on feedback numbers. Scores are also fictitious at orgs that ignore best practices, like the 71% that fail to pre-test customer surveys.
• Operational metrics that fail to reflect the CX.  These customer-incorrect metrics are self-serving, inaccurate, and inadequate (Forrester client access only) . For example, an e-commerce company may mark an order as complete when it prints the shipping label. If fulfillment delays occur after that, the customer will receive their item late — while the company congratulates itself for an on-time order. Or a billing department may report 99% billing accuracy while customers complain of inaccurate bills. The problem? Although bills are technically accurate, they’re confusing to customers.

Hopefully, it’s obvious why this is a problem. Organizations that make decisions based on fairy tales make mistakes. They make the wrong decisions about which customer pain points to fix and about how to fix them. What’s worse, organizations often fail to act at all because they don’t realize that there’s a pain point to fix.

So put away the fairy tale and tell an accurate story about your organization’s CX:

• Stop incentivizing fiction. Wean your organization off score-based incentives (Forrester client access only) and instead coach employees on the behaviors that you can prove will create better experiences.
• Create customer-correct operational metrics. Highlighting the most obvious discrepancies between current ops metrics and customer perceptions may be enough to prompt change. If collaborative approaches fail, go it alone to develop new operational metrics (Forrester client access only) alongside existing ones.
• Adopt a metrics framework. Ensure an accurate, balanced picture of your organization’s CX by building a framework (Forrester client access only) that measures interaction, perception, and outcome metrics at the relationship, journey, and touchpoint levels.
• Evolve your VoC program. Turn your stagnant voice-of-the-customer (VoC) program into a feedback management practice (Forrester client access only) that’s more proactive, effective at monitoring impact, and integrated across the organization.
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Men report more pressure and threats to share location and accounts with partners, research shows

Men report facing more pressure than women—and more threats of retaliation—to grant access to their locations and online accounts when in a committed relationship, according to a new analysis of data released this summer by Malwarebytes.

The same analysis also revealed that, while men report more regret in sharing their locations, women report less awareness in how their locations can be accessed, particularly through food delivery apps, ride-hailing services, vacation rental platforms, and other location-based tools.

The data from Malwarebytes paints a nuanced portrait of the struggles that men and women face when deciding how much of their digital lives to share with spouses, boyfriends, girlfriends, and partners. Often, the struggles intersect with parts of modern dating that people have little control over, including how companies track, collect, and share their data, and how easy it is for other people to access that data.

In looking more closely at the research released earlier this year in the report, “ What’s mine is yours: How couples share an all-access pass to their digital lives ,” Malwarebytes hopes to once again spread awareness and education about secure dating practices in the internet age.

Access our full “Modern Love in the Digital Age” guidance hub below.

MODERN LOVE

Men: More regret, pressure, and threats

Men are going through a loneliness epidemic in America right now.

But even for men in romantic relationships, where companionship should be a salve, other problems emerge. In particular, as Malwarebytes found, these problems include disparate feelings of pressure and regret in sharing their devices, account passwords, and locations.

For example, of partners who shared their location with one another, 36% of men said they’d “felt pressure” to do so, compared with 20% of women who said the same. And a shocking 9% of men who share their account access clarified that such access may be imbalanced, as they agreed: “My partner has threatened me over sharing account access,” compared to 4% of women—a more than two-fold increase. The threats included things like being broken up with, being harmed physically or emotionally, or being shut out and ignored.  

Men were also more likely to report a one-sided consent model for how their partners accessed their devices, accounts, and locations (a model that we’re not entirely ready to call “sharing” because of the clearly communicated lack of consent).

When asked about the way in which they “shared” any type of digital and device access, which included smartphones, tablets, computers, online accounts for multiple apps, and location data, 23% of men said “Yes [my partner] has access but I wish they didn’t.” That rate was 12% for women.

Similar disparities arose when men and women answered the same way regarding device access (14% of men compared to 7% of women), social media access (9% of men compared to 4% of women), and access to apps that can share your location (16% of men compared to 9% of women).

But not all location apps are the same, and when asked specifically about apps that are designed to share locations between individuals—such as FindMy on iOS, Find My Device for Google, or third-party tools like Life360—the data revealed the largest discrepancy.

A shocking 400% as many men said they only share their locations through those apps “because my partner insists” (8% of men compared with 2% of women).

In the research, men openly shared their feelings on all this, as 14% (compared to 8% of women) agreed: “If I could do it all over again, I wouldn’t share as much personal account information with my partner.”  

Women: Less awareness of shared location access

In safe and consensual arrangements between couples, a shared location can show up as a little blue dot on a devoted smartphone app.

But for apps that rely on location data to function—like ride-hailing apps, food delivery services, and vacation rental platforms—location “sharing” can feel a lot more like location “leaking.” A shared Airbnb account, for example, could reveal a spouse’s active vacation rental address to another partner logged into the same account. A shared Uber account could reveal ride history, and potentially even a new address, to an ex-boyfriend who never logged out after a breakup. And DoorDash orders could expose when a domestic abuse survivor is at home, so long as their abuser is monitoring the app from the same account.

But these examples, research shows, are not common knowledge, with women showing less awareness than men for every type of account.

Women were less likely to be aware of how their locations could be exposed to another user logged into the same account for vacation rental platforms (68% of women were unaware compared to 49% of men), health and fitness tracking apps like FitBit and Strava (57% of women compared to 43% of men), ride-hailing apps (50% of women compared to 37% of men), and food and grocery delivery apps (49% of women compared to 39% of men).

Women were also more likely to say they were unaware of how the companion apps for many modern vehicles—which can be used to find a car in a large parking lot or to help locate a stolen sedan—can also reveal their location on a shared account (60% of women compared to 41% of men).

This relatively new location-tracking method has caused serious problems for spouses being followed by their exes , and the blame cannot fall on users who are tasked with, as usual, managing even more parts of their lives online.

Shifting perspectives

Data alone never presents a full story, and data that compares men and women can be vulnerable to misinterpretation.

The varying issues facing men and women should not be interpreted as problems of their own making—men cannot be said to regret sharing account access because they have “something to hide,” and women cannot be said to be poorer users of technology because of lower reported awareness in location sharing mechanisms.

If anything, the overlap in responses shows the work to be done.

When 68% of women and 49% of men are unaware of how their locations can be accessed through shared accounts on vacation rental platforms, perhaps this isn’t a problem of user awareness. Perhaps it is a problem of unclear communication and lacking transparency from the largest and most popular apps today.

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ChatGPT 4o-mini: Next-level AI technology to boost business

Want to harness the power of ai in your business explore the new chatgpt 4o mini by learning about its standout features and business use cases..

Saturday August 17, 2024 , 3 min Read

Are you curious about the latest ChatGPT 4o-mini? This new AI model is making headlines with its incredible capabilities and cutting-edge features at an affordable cost (and of course it has a free version as well!)

In today's article, we will explore all you need to know about ChatGPT 4o-mini, from its functionality to its applications in various industries. So let's review this hottest new AI model!

What is ChatGPT 4o-mini?

ChatGPT 4o-mini is the latest iteration of OpenAI's popular language model, GPT-4. This new version has been optimised for faster processing speeds and improved performance, making it ideal for a wide range of applications. Whether you're a developer looking for coding assistance or a business owner seeking to improve customer service, ChatGPT 4o-mini has something to offer.

Here's what sets GPT 4o-mini apart

One of the key features that sets ChatGPT 4o-mini apart from its predecessors is its enhanced ability to understand context and generate accurate responses. This model has been trained to give a streamlined performance at low computational requirements and development costs.

As a result, ChatGPT 4o-mini has replaced OpenAI's GPT-3.5 Turbo as the smallest AI model. And let's not forget that the GPT-4o mini has outperformed competitors like Gemini Flash and Claude Haiku on benchmarks like reasoning and coding tasks, textual intelligence, etc.

How can ChatGPT 4o-mini benefit businesses?

The ChatGPT 4o-mini provides numerous benefits for businesses in different industries. It helps enhance customer service, streamlining internal communications, and aiding companies in achieving their goals more efficiently. Let's look at these use cases in detail.

1. Personalised customer support

One of the main advantages of using ChatGPT 4o-mini is its ability to provide personalised customer support in real time. This AI model can hold more natural and engaging conversations with users, making it a valuable tool for businesses looking to enhance their customer interactions .

By training the model on your company's specific data and requirements, you can create a chatbot that can address customer inquiries 24/7, resolve issues, and provide relevant information with minimal human intervention.

2. Conduct in-depth market research

Stay on top of market trends, customer feedback, and competitor data to uncover valuable insights for strategic planning by using GPT-4o mini. Firms can also automate survey creation, distribution, and analysis to gather key customer insights efficiently.

3. Enhance product development

Get assistance in brainstorming sessions, generating innovative ideas, and analysing constructive feedback on product concepts and features. This AI model can highlight areas of product improvement by interpreting vast amounts of data and contributing to the development of new features or prototypes.

4. Automate routine tasks

Another key benefit of ChatGPT 4o-mini is its ability to automate a variety of tasks, including scheduling appointments and generating reports. By using AI, businesses can improve their operations, minimise errors, and boost productivity . With ChatGPT 4o-mini taking care of routine tasks, employees can concentrate on strategic activities that promote growth and innovation.

The bottom line

ChatGPT 4o-mini is a game-changer in the world of artificial intelligence, with its advanced capabilities and potential for transforming businesses across various industries. By leveraging this powerful model, you can enhance customer interactions, automate tasks, and drive innovation in your organisation and products.

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More From Forbes

The power of diversity and inclusion: driving innovation and success.

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Jason Miller helps influential brands and celebrities create generational wealth with their businesses | CEO, Strategic Advisor Board .

Diversity and inclusion is a strategic advantage that promotes innovation in organizations, better decision making and stronger workplace cultures. See the strategies for building a diverse and inclusive organization to achieve long-term business success.

The value of diversity and inclusion has become increasingly recognized in society and in business. Organizations that promote diversity and cultivate inclusive environments are reaping huge rewards in terms of innovation, better decision making and better performance overall. The positive impact of diversity and inclusion extends beyond social responsibility; it is a strategic imperative that drives success and positions companies for long-term sustainability.

The Business Case For Diversity And Inclusion

Diversity can stimulate innovation by challenging conventional thinking, encouraging fresh ideas and promoting creative problem-solving. In research studies, diverse groups with people who have different backgrounds, genders, experiences and perspectives consistently generate more innovative solutions than homogeneous groups. Embracing diversity unlocks the potential for innovative products, services and approaches.

Enhanced Decision Making And Problem-Solving

Organizations can make better decisions by leveraging their workforce's diverse expertise and knowledge. Individuals are empowered to share their opinions and unique insights in inclusive environments. Organizations can benefit from well-rounded discussions and comprehensive evaluations by valuing and incorporating diverse perspectives. As a result of considering a wider range of possibilities and challenging groupthink, diverse teams are more effective at solving complex problems.

Benefits Of Diversity And Inclusion For Organizations

The financial performance of companies prioritizing diversity and inclusion consistently outperforms their peers. Financial returns are strongly correlated with diverse executive boards. Although, it’s important to note that diversity and inclusion should come from a place of increasing better work environments and employee satisfaction, and not firstly from a financially charged approach.

Increasing market share and customer loyalty is easier for companies that focus on diversity since they are better equipped to understand and connect with a broader customer base. Diversity can also foster a competitive advantage for companies attracting and retaining rockstar employees.

Enhanced Employee Engagement And Productivity

An inclusive culture cultivates a sense of belonging, respect and psychological safety, which increases employee engagement and productivity . This is because employees are more likely to feel valued for their unique contributions when they are celebrated and recognized. This type of environment encourages collaboration and innovation, as individuals from a variety of backgrounds bring with them different skills, perspectives and life experiences.

Strengthened Employer Brand And Reputation

Companies prioritizing diversity and inclusion are considered employers of choice by top talent. In today's socially conscious world, committed and dedicated employees are more likely to feel valued for their unique contributions if they are committed and dedicated to achieving organizational culture and promoting diversity in their workforce. This positive perception attracts diverse talent and strengthens relationships with customers, partners and the community.

Benefits Of Diversity And Inclusion For Employees

Creating a diversified workforce provides equal opportunities for all employees to grow and advance in their careers. Employees can then be inspired to push harder if they are celebrated for achieving organizational goals and given the ability to continue developing as staff members and individuals.

To strive towards an inclusive workspace, promote employees' sense of belonging, acceptance and well-being. In addition, you can promote improved mental health by creating supportive environments that encourage open communication, empathy and work-life balance. If employees associate good feelings with their workplaces, they can perform better.

Expanded Cultural Competence And Global Perspective

Diversity and inclusion can expose employees to various cultures, traditions and perspectives. This exposure can foster cultural competence. In my opinion, employees must be motivated, committed and dedicated to achieving organizational goals to feel valued for their unique contributions. Employees can learn and benefit from one another, better navigate diverse markets and build relationships based on cultural understanding and empathy. This cultural competence goes far beyond the workplace and creates stronger communities and a better world.

Strategies For Embracing Diversity And Fostering Inclusion

Creating a diverse and inclusive organization begins with leadership commitment and accountability. Senior leaders must champion diversity and inclusion as strategic priorities and set the tone for the organization. By leading by example, they can inspire others and strive to ensure diversity and inclusion initiatives are integrated into business strategies and practices.

Inclusive Recruitment And Hiring Practices

Organizations can promote diversity by adopting inclusive recruitment and hiring practices. This includes widening the candidate pool, leveraging diverse sourcing channels and hiring individuals from underrepresented communities. Establishing clear diversity goals and promoting diverse representation in all levels of the organization, including leadership positions, is essential and demonstrates the organization's commitment to inclusive practices.

Building Inclusive Work Cultures

Organizational culture can take some time to cultivate, but the effort is worth it. Organizations can achieve this by encouraging collaboration on projects across departments, honest communication and teamwork, and providing opportunities and resources. Training programs and workshops on unconscious bias, cultural competence and inclusive leadership can also help cultivate understanding and awareness.

Continuous Evaluation And Improvement

Building a diverse and inclusive organization is an ongoing journey. It is essential to continuously evaluate diversity and inclusion efforts through metrics, surveys and feedback mechanisms. By gathering data and insights, organizations can identify areas for improvement and develop targeted strategies. Your employees are one of your greatest resources as a business owner. Ask for feedback regularly and work to incorporate new ideas and suggestions generated by employees from all levels of the organization.

Inclusivity is not only the right thing to do, but it is a strategic advantage for organizations aiming to thrive in today's evolving workplace. By building diverse workforces, organizations can propel innovation, improve company decision-making and create an engaging and supportive work environment. Through leadership commitment, inclusive recruitment practices and cultural development, organizations can unlock the full potential of their teams and position themselves for long-term success. Let us embrace diversity and foster inclusion, not just for the benefit of our organizations but society at large.

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SureCritic provides services to collect a large volume of ratings and reviews from verified customers, then publishes these reviews to a search engine optimized SureCritic website specifically for your business. At the same time the SureCritic ReviewReach platform enhances your reputation across multiple review sites, while monitoring your entire online reputation all in one portal.

• Manage Your Online Reputation – Search engine optimized Business Review Pages gives you more visibility into customers searching for your business. • Respond To Reviews In Real-Time – Respond to reviews immediately and represent the entire customer experience. Includes negative response email alerts. • Easy Integration With Social Media – Allows you to post reviews to Facebook and Twitter. • Independent Review Site – Since SureCritic is an independent review source, we are a more believable source of information. • ReScore – Patent pending feature that allows you to ask for a follow up review once you’ve responded to a customer’s low score rating. It’s an industry first! • Social Engage – We provide opportunities for social engagement throughout the experience for you and your customers and prospects. • Call Center Assist – An optional feature in cases where you want a fast start or more reviews.

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The hard stuff: Navigating the physical realities of the energy transition

At a glance

• The energy transition is in its early stages, with about 10 percent of required deployment of low-emissions technologies by 2050 achieved in most areas. Optimized over centuries, today’s energy system has many advantages, but the production and consumption of energy accounts for more than 85 percent of global carbon dioxide (CO 2 ) emissions. Creating a low-emissions system, even while expanding energy access globally, would require deploying millions of new assets. Progress has occurred in some areas, but thus far has largely been in less difficult use cases.
• Twenty-five interlinked physical challenges would need to be tackled to advance the transition. They involve developing and deploying new low-emissions technologies and entirely new supply chains and infrastructure to support them.
• About half of energy-related CO 2 emissions reduction depends on addressing the most demanding physical challenges. Examples are managing power systems with a large share of variable renewables, addressing range and payload challenges in electric trucks, finding alternative heat sources and feedstocks for producing industrial materials, and deploying hydrogen and carbon capture in these and other use cases.
• The most demanding challenges share three features. First, some use cases lack established low-emissions technologies that can deliver the same performance as high-emissions ones. Second, the most demanding challenges depend on addressing other difficult ones, calling for a systemic approach. Finally, the sheer scale of the deployment required is tough, given constraints and the lack of a track record.
• Understanding these physical challenges can enable CEOs and policy makers to navigate a successful transition. They can determine where to play offense to capture viable opportunities today, where to anticipate and address bottlenecks, and how best to tackle the most demanding challenges through a blend of innovation and system reconfiguration.

Today’s energy system, encompassing both the production and consumption of energy resources, is massive and complex. 1 This research considers both the use of energy resources like oil, gas, and coal to provide energy, as well as their nonenergy uses in materials production, namely as inputs or feedstocks (for example, the use of oil as a feedstock for the production of plastics). For comprehensive definitions relating to the energy system, see “Glossary” in Climate change 2014: Mitigation of climate change , Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPPC), Cambridge University Press, 2014. The system has been optimized over centuries, is deeply embedded in the global economy, and serves billions of people, if not yet all of humanity. 2 Number of people lacking access to reliable electricity services , United Nations Development Programme, 2022. And it is high-performing. Energy can be dispatched relatively easily where and when it is needed because current fuels are energy-dense and easily transportable. Supply can be ramped up and down quickly.

Acknowledgments

The research was led by Mekala Krishnan, an MGI partner in Boston; Chris Bradley, a McKinsey senior partner and a director of MGI in Sydney; Humayun Tai, a senior partner in the New York office; Tiago Devesa, an MGI senior fellow in Lisbon; Sven Smit, McKinsey senior partner in Amsterdam and chairman of MGI; and Daniel Pacthod, a senior partner in the New York office. We give particular thanks to Lola Woetzel (alumna), a former McKinsey senior partner and director of MGI, who helped us drive the research that led to this report.

A group of McKinsey colleagues coauthored  chapters dedicated to the seven domains of the energy system: for power, Jesse Noffsinger, a McKinsey partner in Seattle, and Diego Hernandez Diaz, a McKinsey partner in Geneva; for mobility, Timo Möller, a McKinsey partner in Cologne and coleader of the McKinsey Center for Future Mobility; for industry, Michel Van Hoey, a McKinsey senior partner in Luxembourg; Christian Hoffmann, a McKinsey partner in Düsseldorf; Ken Somers, a McKinsey partner in Brussels; and Adam Youngman, a McKinsey senior asset leader in Los Angeles; for buildings, Daniel Cramer, a senior McKinsey asset leader in New York; for raw materials, Michel Foucart, a McKinsey associate partner in Brussels; Michel Van Hoey; and Patricia Bingoto, a McKinsey senior expert in Zurich; for hydrogen and other energy carriers, Rory Clune, a senior partner in Boston; and for carbon and energy reductions, Clint Wood, a McKinsey partner in Houston, and Santhosh Shankar, a US-based McKinsey expert. For their considered contributions to the research, we also thank Olivia White, McKinsey senior partner and a director of MGI in San Francisco, and Jan Mischke, MGI partner in Zurich.

The project team was led by Masud Ally, Francisco Galtieri, Kasmet Niyongabo, and Luc Oster-Pecqueur, and comprised Kemi Ajala, Sanjana Are, Maya Berlinger, Andrea Boza Zanatta, Susan Cheboror, Patrick Chen, Thibault Courqueux, Anurag Dash, John Grabda, Muriel Jacques, Myer Johnson-Potter,  Pauline Leeuwenburg, Pierre Salvador, Girish Selvaraj, Anna Schneider, Casey Timmons, Tse Uwejamomere, Marnix Verhoeven, and David Wu. We are grateful to Janet Bush, MGI executive editor, who helped write and edit the report, and Juan M. Velasco, who helped with data visualization.

For kindly sharing their insights, we thank advisors Simon Dietz, professor, Grantham Research Institute on Climate Change and the Environment; Marion Dumas, professor, Grantham Research Institute; and John Ward, founder, Pengwern Associates, and visiting senior fellow, Grantham Research Institute.

We are also grateful to the following for taking the time to discuss the findings of this research and sharing their views with us: Jesse Jenkins, assistant professor of mechanical and aerospace engineering at the Andlinger Center for Energy and the Environment at Princeton University; Ted Nordhaus, founder and executive director of the Breakthrough Institute; Vijay Modi, a professor of mechanical engineering at Columbia University and faculty member of the Earth Institute; and Gregory F. Nemet, Vilas Distinguished Achievement Professor, La Follette School of Public Affairs, University of Wisconsin-Madison; and Daniel Schrag, the Sturgis Hooper Professor of Geology, Professor of Environmental Science and Engineering at Harvard University, and Co-Director of the Science, Technology, and Public Policy Program at Harvard’s Kennedy School.

Many McKinsey colleagues gave us input and guidance. We want to thank Enric Auladell Bernat, Deston Barger, Henrik Becker, Christian Begon, Michele Benoit, Krysta Biniek, Milo Boers, Brodie Boland, Janice Bolen, Michaela Brandl, Greg Callaway, Julian Conzade, Peter Cooper, Andreas Cornet, Matteo Cutrera, Thomas Czigler, Danny Van Dooren, Treina Fabre, Javier Ferrer, Lauritz Fischer, Wenting Gao, Godart van Gendt, Nicolas Goffaux, Jose Luis Gonzalez, Anna Granskog, Darya Guettler,  Rajat Gupta, Marcin Hajlasz, Bernd Heid, Tom Hellstern, Russell Hensley, Anna Herlt, Ruth Heuss, Ann Hewitt, Autumn Hong, Blake Houghton, Thomas Hundertmark, Lionel Johnnes, Adam Kendall, Arjen Kersing, Per Klevnäs, Anna (Orthofer) Kortis, Kevin Laczkowski, Joh Hann Lee, Mateusz Lesniak, Christopher Martens, Eduardo Mencarini, Takashi Nakachi, Tomas Nauclér, Geoff Olynyk, Alex Panas, Jan Paulitschek, Sebastian Reiter, Gustavo Ribeiro, Daniel Riefer, Alexandre Van de Rijt, Moritz Rittstieg, Giulio Scopacasa, Suvojoy Sengupta, Bram Smeets, Hady Soliman, Brandon Stackhouse, Stephanie Stefanski, Michelle Stitz, Carlo Tanghetti, Tom Thys, Felix Tigges, Joaquin Ubogui, José Urgel, Steven Vercammen, Tom Voet, Maurits Waardenburg, Jeremy Wallach, Markus Wilthaner, Marita Winslade,  and Nicola Zanardi.

For all its advantages, today’s system also has critical flaws. About two-thirds of energy is currently wasted. 3 Clemens Forman et al., “Estimating the global waste heat potential,” Renewable and Sustainable Energy Reviews, volume 57, May 2016; Energy flow charts , Flowcharts, Lawrence Livermore National Laboratory and Department of Energy, accessed July 2024; and Paul Martin, The primary energy fallacy – or, committest thou NOT the 2nd sin of thermodynamics! , June 25, 2024. And the system generates more than 85 percent of global emissions of carbon dioxide (CO 2 ). 4 Global CO 2 emissions from energy combustion and industrial processes total about 37 gigatons, with about five gigatons in agriculture, forestry, and other land use. In the case of methane, more than approximately 35 percent of global emissions arise from the energy system, from combustion and industrial processes, with the remaining 65 percent divided between agriculture, at about 40 percent, and waste and other sectors at about 25 percent (data for 2021); McKinsey EMIT database, 2023.

Companies and countries are now engaged in an effort to transition the energy system and reduce those emissions—and to do so in just a few decades. That is a big ask. In the digital age, we have become accustomed to lightning-fast transformations. TikTok took nine months and ChatGPT only two months to gain 100 million users. 5 “ChatGPT witnesses massive rise, Chatbot gains 100 million users in two months,” Economic Times , March 2023. But an energy system is a physical entity, and historical energy transitions have taken many decades or even centuries. Complicating the task of building a new low-emissions energy system is that it coincides with the need for it to continue to grow to expand access to energy for billions of people who still do not have it, thereby economically empowering them.

Real progress has been made, but the transition remains in its early stages. Thus far, deployment of low-emissions technologies is only at about 10 percent of the levels required by 2050 in most areas, and that has been in comparatively easy use cases. More demanding challenges are bound to emerge as the world confronts more difficult use cases across geographies.

Low-emissions technologies such as solar and wind power and electric vehicles (EVs) have advantageous properties and can be brought together to deliver high performance. But deploying them well and progressing the transition further requires understanding the physical realities of the energy transition—the “hard stuff.” Recognizing that the energy transition is first and foremost a physical transformation is a truth that can get lost in the abstraction of net-zero scenarios. But it is vital if the new energy system is to retain, or even improve on, the performance of the current one and secure an affordable, reliable, competitive path to net zero. 6 An affordable, reliable, competitive path to net zero , McKinsey Sustainability, November 2023. It is also important to take a holistic view of the socioeconomic impacts of different transition pathways and to use this perspective to help inform decision making. See Climate Transition Impact Framework: Essential elements for an equitable and inclusive transition , McKinsey Sustainability, December 2023; and “Solving the net-zero equation: Nine requirements for a more orderly transition,” McKinsey Sustainability, October 2021.

The observation has widely been attributed to Albert Einstein that, given an hour to solve a problem, he would spend 55 minutes defining the problem and five thinking about solutions. 7 Nell Derick Debevoise, “The third critical step in problem solving that Einstein missed,” Forbes , January 26, 2021. It is in that spirit that this research builds on the vast body of literature on the energy transition and pathways to net zero. Across seven domains, it identifies 25 significant physical challenges that must be overcome if the transition is to succeed. Three aspects stand out across these challenges: the maturity and performance of low-emissions technologies; the degree of scaling these technologies and their support infrastructure and supply chains would need as this massive energy system is transformed; and interdependencies across the different parts of the system.

Click on the tiles for summaries of 25 challenges across 7 domains

Download the full report  for an in-depth review of each domain and associated physical challenges.

Seven domains of the energy system would need to be transformed, and this effort is in its early stages

The energy transition involves the physical transformation of seven deeply interlinked domains. The first is the power domain, which needs to reduce its own emissions and to scale dramatically to provide low-emissions energy to the three large consuming domains: mobility , industry , and buildings . The final three domains are enablers of the energy transition: raw materials , especially critical minerals; new fuels, such as hydrogen and other energy carriers ; and carbon and energy reduction (see sidebar, “Why understanding the physical realities of the transition matters”).

Why understanding the physical realities of the transition matters

Understanding the physical realities of the energy transition—namely the physical properties of low-emissions solutions and the nature of the physical transformation—is critical to many aspects of designing a successful transition.

First, understanding the physical properties of low-emissions solutions can help design a new system that delivers performance on a par with the current system and does so reliably. This matters because the energy system is vital for driving economic growth and progress. As discussed later, this is not a trivial task and it requires a careful understanding of the performance and advantages of low-emissions technologies, innovation needs, and how such technologies can effectively be brought together in an interconnected system to deliver performance.

Second, looking at the nature and scale of the underlying physical transformation helps design a feasible transition. In an energy system made up of thousands or millions, and in some cases billions, of individual assets, the transformation that would be needed is monumental. With such a massive scale-up, bottlenecks in the build-out of supply chains could lead to shortages of critical minerals and manufactured goods. Installing or building new low-emissions assets at the scale and pace needed may be similarly difficult if not planned for well.

Third, and relatedly, applying a physical lens to different components of the energy system can highlight critical interdependencies, which similarly need to be factored into the design of a reliable and feasible energy transition.

Fourth, understanding the physical properties and maturity of different technologies, and the nature of the physical transformation, also helps to shed light on their costs and therefore on the affordability of the transition. 1 It is also important to take a holistic view of the socioeconomic impacts of different transition pathways, and to use this to help inform decision making. See Climate Transition Impact Framework: Essential elements for an equitable and inclusive transition , McKinsey Sustainability, December 2023; and “ Solving the net-zero equation: Nine requirements for a more orderly transition , McKinsey Sustainability, October 27, 2021. Prior McKinsey research has highlighted the large scale-up needed in low-emissions capital spending and various challenges associated with the affordability of the transition. 2 See, for example, The net-zero transition: What it would cost, what it could bring , McKinsey Global Institute, January 2022; An affordable, reliable, competitive path to net zero , McKinsey Sustainability, November 30, 2023; and From poverty to empowerment: Raising the bar for sustainable and inclusive growth , McKinsey Global Institute, September 2023. While costs associated with the transition are not the core focus of this research, appreciating the physical realities of the transition is crucial to better understand cost challenges. For example, in the case of carbon capture technologies, expanding their use to new use cases would require deploying them in processes where CO 2 makes up a small portion of the gases that are emitted (that is, is present in lower concentration in flue gases) and is therefore harder to capture. This could be about three times more expensive than the cost of capture of higher-concentration use cases deployed today. 3 See chapter 7, Challenge 24. The massive physical scale-up of the assets needed for a new system could also lead to shortages of raw materials and, as a result, contribute to price increases and create volatility. In 2022, prices of cobalt, lithium, and nickel surged, leading to an increase in the price of batteries of nearly 10 percent globally. 4 Energy technology perspectives 2023 , IEA, January 2023; IEA clean energy equipment price index, 2014–2023 , IEA, September 7, 2023; and Trends in electric vehicle batteries , IEA, April 2023. A sharp drop in prices quickly followed. This volatility generated uncertainty that contributed to the postponement of new mining projects. 5 Thomas Biesheuvel, “Battery metal price plunge is closing mines and killing deals,” Bloomberg Law, January 9, 2024; and Aya Dufour, “Some minerals are ‘critical’ to the digital economy, but current prices don’t reflect that,” CBC News, March 4, 2024.

Thus, a physical lens brings focus on not just how to achieve emissions reduction feasibly but also to do so while ensuring affordability, maintaining the reliability of the energy system, and thus also securing the competitiveness of companies and economies—three other objectives that McKinsey research has identified as vital for a successful transition. 6 An affordable, reliable, competitive path to net zero , McKinsey Sustainability, November 2023.

This research primarily uses the 2023 McKinsey Achieved Commitments scenario, not as a forecast, but to understand the physical challenges to overcome. 8 This scenario assumes that countries that have committed to net zero (some by 2050, some later) meet those commitments and that warming reaches 1.6ºC relative to preindustrial levels by 2100. See Global energy perspective 2023 , McKinsey, October 2023. Other net-zero scenarios may contain slightly different combinations of technologies and rates of deployment, but the broad trends and themes described in this research would still apply. This report is based on analysis as of September 2023. Subsequent developments in the energy system may lead to different outcomes, which will be covered in forthcoming McKinsey research. Under this scenario, billions of low-emissions assets—for instance, about one billion EVs, over 1.5 billion heat pumps, and about 35 terawatts of low-emissions power generation capacity—would need to be deployed by 2050 alongside scaling supporting infrastructure such as the grid, EV charging stations, and supply chains (Exhibit 1).

Image description:

A stacked area chart shows that primary energy consumption grew steadily from 1990 to 2022. Fossil fuels accounted for about 80 percent of the total in 2022. Other non-fossil fuels accounted for most of the rest, and variable renewable energy (VRE) had a very small but growing presence. On the right side, two line charts show energy system emissions have not started to decline, with a six percent increase from 2012 to 2022. But emissions intensity, measured in million tonnes of CO2 per exajoule of primary energy consumption, decreased by 7 percent over the same period.At the bottom, a Gantt chart shows the 2022 deployment of low-emissions technologies as a share of their needed 2050 deployment in each of 7 domains, or sectors. The 2050 deployment needs are based on the McKinsey 2023 Achieved Commitment Scenario, in which most countries reach their net-zero commitments by or before 2050. In the power sector, low-emissions installed capacity is at 8–12 percent of its needed 2050 deployment. In the mobility sector, deployment has reached three percent of its needed deployment for electric vehicles (EV) stock and 15 percent of its needed deployment for EV sales. The industry sector has reached 0–10% of its needed deployment for low-emissions production of steel and cement. The buildings sector has reached 5–7 percent of its needed deployment for heat pump stock and 9–12 percent of its needed deployment for heat pump sales. The raw materials sector has reached 10–35 percent of its needed deployment for the supply of critical minerals. The hydrogen and energy carriers sector has reached less than one percent of its needed deployment for the production of low-emissions hydrogen. Finally, the carbon and energy reduction sector has reached less than one percent of its needed deployment for CO 2 capture by point-source facilities.Overall, the charts show that the energy transition is at an early stage.

End of image description.

Recent years have seen momentum on many—but not all—fronts. For instance, about 90 percent of all battery EV sales and almost 60 percent of solar and wind power capacity added was in the past five years. 9 Global EV Data Explorer , IEA, April 23, 2024; Renewable capacity statistics 2023 , International Renewable Energy Agency, 2023. But overall, the transition is in its early stages. Deployment of low-emissions technologies is currently only about 10 percent of the levels required by 2050 in most domains—and largely in comparatively easy use cases.

While some areas like solar have grown rapidly, others have not. In cases such as low-emissions hydrogen, carbon capture, and low-emissions primary production (excluding recycling) of large industrial materials, less than 1 percent of required deployment by 2050 has been achieved thus far.

Abating about half of energy-related emissions depends on addressing the hardest of 25 physical challenges

To progress the transition further, 25 physical challenges—defined as barriers to switching from high-emissions physical assets and processes to low-emissions ones—across the seven domains would need to be addressed (Exhibit 2).

An hexagon chart presents 25 physical challenges that must be addressed for a successful energy transition, categorized by domain. The challenges are grouped into three levels, according to the level of difficulty of addressing them. Level one challenges require deploying established technologies that face the least physical hurdles. Level two challenges require deploying known technologies to accelerate and scale them. Level three challenges occur when technological performance gaps meet demanding use cases and the transformation is just beginning. The challenges are arranged in a honeycomb pattern. The first domain is the power sector, with six challenges: managing renewables' variability (level 3); scaling emerging power systems (level 3); flexing power demand (level 2); securing land for renewables (level 2); connecting through grid expansion (level 2); and navigating nuclear and other clean energy (level 2). End-Use Sectors include three domains: mobility, industry, and buildings. Mobility challenges include driving battery electric vehicles (BEVs) beyond breakeven (level 1); going the distance on BEV range (level 1); loading up electric trucks (level 3); charging up EVs (level 2); and refueling aviation and shipping (level 3). The challenges in the industry domain are furnacing low-emissions steel (level 3); cementing change for construction (level 3); heating other industries (level 3); synthesizing low-emissions ammonia (level 3); cracking the challenge of plastics (level 3); synthesizing low-emissions ammonia (level 3); and heating other industries (level 2). Challenges in the buildings domain include facing the cold with heat pumps (level 1); and bracing for winter peaks (level 2). The last three domains are categorized as enablers. They are: raw materials, H2 and other energy carriers, and carbon & energy reduction. Raw materials include one challenge: unearthing critical minerals (level 2). H2 and other energy carriers include harnessing hydrogen (level 3); scaling hydrogen infrastructure (level 3); and managing biofuels footprint (level 2). Carbon and energy reduction challenges are expanding energy efficiency (level 2); capturing point-source carbon (level 3); and capturing atmospheric carbon (level 3).

Some challenges are harder to address than others, and they have been categorized into three levels of difficulty based on technological performance, interdependencies across different challenges, and scaling needs:

Three Level 1 challenges require progress in deploying established technologies and face the least physical hurdles.

Ten level 2 challenges require the deployment of known technologies to accelerate, and associated infrastructure and inputs to be scaled., twelve level 3 challenges have technological performance gaps and interdependencies, and are early in their transformation..

Eliminating between 40 and 60 percent of the energy system’s CO 2 emissions depends on addressing Level 3 challenges (Exhibit 3).

A donut chart shows the share of direct and indirect emissions in 2022 that are associated with Level 3 challenges, which are defined as the most challenging physical aspects of the energy transition. The chart shows that Level three challenges account for 40–60 percent of total emissions from the energy system. The chart further shows that the power domain is responsible for about 40 percent of the emissions associated with Level three challenges, while mobility and industry contribute about 20 percent and 40 percent, respectively. The challenge levels are based on the McKinsey 2023 Achieved Commitment Scenario, in which most countries reach their net-zero commitments by or before 2050.

Each domain faces physical challenges

The research looks at physical challenges in seven domains (see sidebar, “Scope and methodology”). Click on each domain name to go to the chapter in the full report.

Scope and methodology

This research focuses on understanding the physical challenges of the energy transition. Important methodological choices were made to do this.

The focus is the energy system, encompassing both production and use (including the current use of fossil fuels as feedstock for industrial processes). The system accounts for more than 85 percent of current CO 2 emissions. 1 Global CO 2 emissions from energy combustion and industrial processes total about 37 gigatonnes, with about five gigatonnes in agriculture, forestry, and other land use. In the case of methane, more than 35 percent of global emissions arise from the energy system, from combustion and industrial processes, with the remainder split between agriculture at about 40 percent and waste and other sectors at about 25 percent; McKinsey EMIT database, 2023. Sources of emissions outside the energy system, including in agriculture, forestry, and other land use, are not included. Other important sustainability topics, including the preservation of natural capital and the impact of pollution beyond greenhouse gas emissions, are also not within scope. In each domain of the energy system, the analysis explores what physical asset and process transformations would be required when switching from high-emissions assets to low-emissions alternatives. Examples include switches from fossil-fuel-based power generation, such as coal power plants, to low-emissions sources like variable renewable energy in the form of solar and wind, and clean firm power like nuclear or hydropower in the power domain; from ICE vehicles to EVs in the mobility domain; and from gas boilers to low-emissions heat sources in industry or buildings. The associated infrastructure and supply chains that would need to be built to support these switches are also analyzed.

Based on these transformations, the research then identifies 25 physical challenges that must be addressed for CO 2 emissions of the energy system to be reduced while replicating the performance of the existing energy system. These challenges were identified in consultation with more than 50 industry experts and academics within and outside McKinsey alongside an extensive literature review of analysis of the energy system. 2 This includes reviews of the level of progress in clean technologies and associated challenges by McKinsey and others. Among other research, see, for instance, Hauke Engel, Mekala Krishnan, Hamid Samandari, Humayun Tai, Daniel Pacthod, Simran Khural, and Mackenzie Murphy, A sector progress tracker for the net-zero transition , McKinsey Sustainability, November 2023; Energy technology perspectives 2023 , IEA, January 2023; Tracking clean energy progress 2023 , IEA, July 2023; Net zero roadmap: A global pathway to keep the 1.5ºC goal in reach , IEA, September 2023; World energy transitions outlook 2023 , International Renewable Energy Agency, 2023; Systems Change Lab data dashboard, accessed May 2024; Climate change 2022: Impacts, adaptation, and vulnerability , Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge University Press, 2022; ETP Clean energy technology guide , IEA, updated September 14, 2023; The state of clean technology manufacturing , IEA, May 2023; New energy outlook 2023 , BloombergNEF, 2023; Global critical minerals outlook 2024 , IEA, May 2024; The state of clean technology manufacturing , IEA, May 2023; Material and resource requirements for the energy transition , Energy Transitions Commission, July 2023; and Better, faster, cleaner: Securing clean energy technology supply chains , Energy Transitions Commission, June 2023.

The 25 challenges are prioritized based on the potential of new, low-emissions technologies to abate emissions. Some exclusions help bound the scope of the work.

First, challenges that are expected to affect only a small portion of total emissions are not included. Second, incremental improvements to existing assets that do not involve major switches in technologies are not directly discussed as individual challenges; two examples are improved ICE fuel efficiency and insulation in buildings. Nevertheless, their collective impact is recognized in Challenge 23. Third, as noted, the challenges focus only on the energy system; those related to the transition of agriculture and other land use are not discussed directly, although the role of land as a physical challenge is discussed as part of the power domain challenges. Fourth, the focus is on challenges of a physical nature; any challenges that are purely related to market adoption or policies are excluded. Fifth, this research does not explicitly cover challenges related to labor. Finally, since this work focuses on analyzing the physical realities of the transition, costs are not the main focus, although, as noted, physical realities can help shed light on cost challenges.

The choice and precise boundaries of the 25 challenges is subjective to a degree, and some challenges are broader in scope than others. Different taxonomies, granularity, or segmentation of some challenges would certainly be possible. For example, circularity and recycling are important cross-cutting challenges that are discussed in the context of individual materials, such as plastics and critical minerals, but they could be deemed challenges in themselves. The list of 25 is neither collectively exhaustive (as noted, a prioritization lens has been used) nor mutually exclusive (many challenges share interdependencies).

The challenges are categorized into three levels, reflecting both the progress made to date in addressing them and the nature of the hurdles to overcome. Three features of difficulty, discussed further in chapter 3, are considered to do this: technological performance; gnarly interdependencies with other challenges; and degree of, and constraints on, scaling.

In examining the 25 challenges, this research builds on existing analyses of the transition in three ways. First, the examination of the performance of individual technologies is done in the context of specific use cases rather than their technological maturity in general. Second, this analysis goes beyond assessing technological maturity to consider other physical challenges, such as the required scale-up of supply of critical minerals. Finally, it considers how the system as a whole interacts—including how a particular individual technology relies on others—and the implications of that interaction.

Of course, the precise boundaries between the levels of challenges can be debated, and the classification into levels can vary by region. Parts of a Level 3 challenge could be categorized as Level 1 or 2. For instance, overall, decarbonizing cement is a Level 3 challenge that requires substantial technological innovation, but some decarbonization approaches, such as using biomass for heating or deploying clinker substitutes, are already widespread in some markets.

A global view of challenges is taken, but deployment of different technologies varies among regions. Some challenges may be more or less important—and difficult—depending on the region.

Across challenges, the research looks at the required deployment of low-emissions assets in 2050, comparing it with today’s levels using McKinsey’s 2023 Achieved Commitments scenario. 3 This research uses the 2023 McKinsey Achieved Commitments scenario because it provides detail across different economies and types of assets about the deployment levels that would be required for those economies to meet the climate commitments they have made. The scenario assumes that countries that have committed to net zero (some by 2050, some later) meet those commitments, and that warming reaches 1.6ºC relative to preindustrial levels by 2100. See Global energy perspective 2023 , McKinsey, October 2023. Other net-zero scenarios may have slightly different combinations of technologies and rates of deployment, but the broad trends and themes described in this research would still apply. In some instances, this research also uses insights from other external scenarios for reasons of data availability.

Among the external sources of data used in this report are publicly available data from the International Energy Agency (IEA) in Paris, namely Energy technology perspectives 2023 , IEA, January 2023; and Net zero roadmap: A global pathway to keep the 1.5ºC goal in reach 2023 update , IEA, September 2023. All are license CC BY 4.0. We note that some analysis in this research was derived from IEA material, and MGI is solely liable and responsible for it; it is not endorsed by the IEA in any manner. This holds true for all providers of the data that went into our analysis. We gratefully acknowledge their input, but the conclusions and any errors are our own.

• Power . Overall, low-emissions power generation capacity would have to increase about ten times by 2050. There are two Level 3 challenges: managing variability in the power system as solar and wind generate a greater share of power, and doing so in emerging power systems that need to grow particularly rapidly. The flexible capacity that would be required to manage this variability, including backup generation, storage, and interconnections of grids in different regions, would need to grow two to seven times faster than power demand, but all face barriers. 10 Simulations are based on the McKinsey Power Model using the McKinsey 2023 Achieved Commitments scenario. Four other Level 2 challenges relate to securing enough land for renewables, investing in current transmission and distribution infrastructure and even expanding the grid, accelerating deployment of nuclear and other clean firm energy power, and increasing flexibility in power demand .
• Mobility . The number of EVs would need to surge from about 30 million on the road today to about one billion by 2050. Two challenges are Level 1: ensuring lifetime emissions savings from passenger battery EVs relative to ICEs, and ensuring that EVs have sufficient range for all needs. 11 A range of nonphysical factors, notably cost and consumer preferences, could also be important in determining EV adoption, but these are not the focus of this research. For the latter, battery EVs already do so for roughly 70 percent of households. Scaling EV charging infrastructure and supply chains has further to go and is Level 2. Trucking, aviation, and shipping are harder to decarbonize, given that they require travelling long distances with heavy payloads, and are Level 3 challenges.
• Industry . Decarbonization of the “big four” industrial material pillars of modern civilization—steel, cement, plastics, and ammonia—are all Level 3 challenges, where the transformation is just beginning. All rely heavily on fossil fuels as inputs and/or fuel for high-temperature heat. 12 Vaclav Smil, “The modern world can’t exist without these four ingredients. They all require fossil fuels,” Time , May 12, 2022; and Global energy perspective 2023 , McKinsey, October 2023. A combination of more energy efficiency; different feedstock s, including hydrogen and recycled inputs; use of alternative materials; electrification; alternative fuels like biomass; and carbon capture would be needed. Other industries, such as general manufacturing, generally do not need high-temperature heat and tend not to use fossil fuels as feedstocks, but low-emissions processes to deliver heat would still need to be scaled and this constitutes a Level 2 challenge.
• Buildings . Heating accounts for the largest share of buildings-related emissions. Heat pumps are already established technologies and perform well, but still face two physical challenges. 13 Other operational challenges related to the scale-up of heat pumps are not discussed in this research. They include the need to scale up manufacturing capacity for heat pumps, whether sufficient skilled labor is available to install them, whether consumers adopt them given their associated costs, and the large turnover and retrofits that the installation of heat pumps would entail so that they can perform effectively. Ensuring that they are efficient at cold temperatures is a Level 1 challenge, reflecting the fact that more than 95 percent of people live in places where existing heat-pump technologies do the job. More demanding, and therefore Level 2, is managing a potential doubling or tripling in peak power demand in some regions if heat pump use expands. 14 Under a scenario in which all heating of buildings is electrified. See Michael Waite and Vijay Modi, “Electricity load implications of space heating decarbonization pathways,” Joule , volume 4, issue 2, February 2020. Other McKinsey and external research found similar increases of two to three times for colder states. The role of natural gas in the move to cleaner, more reliable power , McKinsey, September 2023; and 2050 transition study , ISO New England Inc. Transmission Planning, February 2024.
• Raw materials . Demand for critical minerals, like lithium, cobalt, and rare earths, is expected to surge, but current supply is only about 10 to 35 percent of what would be needed by 2050. 15 This depends on the specific critical mineral. McKinsey MineSpans. This is a Level 2 challenge, where supply would need to be scaled, alongside managing demand for such minerals.
• Hydrogen and other energy carriers . New energy carriers would be needed to serve as alternative fuels and feedstocks for industrial processes. One option is hydrogen, which faces two Level 3 challenges. First, the hydrogen molecule goes through many steps and, therefore, energy losses before it can be used; these would need to be minimized and considered against its advantageous properties to identify appropriate use cases for hydrogen. Second, hydrogen production and infrastructure would need to expand hugely. Few large-scale low-emissions hydrogen projects are currently operational. 16 Hydrogen insights 2023 , Hydrogen Council and McKinsey, May 2023, updated December 2023. Managing the growing land footprint of biofuels is Level 2.
• Carbon and energy reduction . Alongside measures to substitute high-emissions technologies for low-emissions ones, reducing the amount of energy consumed and the emissions of current technologies would also be needed. Expanding energy efficiency through established approaches—for example, improving building insulation—is a Level 2 challenge. Carbon capture from new “point sources” such as cement could be three times harder—and costlier—than for less demanding current use cases, and removing carbon from the atmosphere through direct air capture could be even more costly. Both are Level 3 challenges.

Understanding the physical challenges can help CEOs and policy makers navigate the transition

Making progress on the transition requires understanding physical challenges. If the most demanding challenges are to be addressed, performance gaps would need to be confronted. Innovation of technologies, such as improving the energy density of batteries and developing more efficient hydrogen electrolyzers, would need to continue and be scaled. Broader system-level changes would also be needed—shifting the way technologies mesh together. For instance, the potential increased variability of low-emissions power supplies could be balanced by making demand for power more flexible and using gas peaker plants as backup power. Even the way energy and materials are consumed could be adapted. For instance, alternative materials could replace industrial materials that are difficult to decarbonize.

It would be important to consider how to ramp down the old system and ramp up the new one smoothly, and what investments could both support today’s energy system and lay the groundwork for tackling future emissions and physical challenges. Examples include investing in energy efficiency, transmission and distribution infrastructure, and considering the role of “hybrid” technologies, such as hybrid passenger cars to address vehicle range issues.

CEOs and policy makers both have a role to play in tackling physical challenges. Their plans for the way forward could be calibrated by carefully considering challenges across the three levels:

For Level 1 challenges, how can near-term opportunities from the deployment of fast-maturing technologies be captured?

For level 2 challenges, what bottlenecks need to be addressed today to unlock the next tranche of opportunities, for level 3 challenges, where and how can these hardest challenges be addressed.

The physical transformation of the energy system is complex and difficult, and the path forward uncertain. What lies ahead is a new energy transition on a monumental scale that would require setting a bold aspiration and proceeding with commitment and action. Above all, understanding the physical realities can help navigate the way forward to success.

Want to know more about the physical realities of the energy transition?

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Mekala Krishnan is an MGI partner in Boston. Chris Bradley is a McKinsey senior partner and an MGI director in Sydney. Humayun Tai is a McKinsey senior partner and coleader of McKinsey’s Global Energy & Materials practice in New York. Tiago Devesa  is an MGI senior fellow in Lisbon.  Sven Smit  is a McKinsey senior partner and MGI chairman in Amsterdam.  Daniel Pacthod is a McKinsey senior partner in New York. 

This article was edited by MGI executive editor Janet Bush with data visualizations by Juan M. Velasco and visuals by Nathan R. White.

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