The term "Big Data" seems to be on every executive's lips right now and organizations are spending huge amounts of money to gather, analyze, and make sense of huge amounts of customer information in the hope that these insights will help them beat their competition and improve their bottom line.

In fact, there's so much money being spent on Big Data that according to Gartner, Big Data is expected to drive $32 billion in IT spending this year, and a staggering $232 billion through 2016. The International Data Corporation (IDC) last year predicted that the Big Data technology and services market is expected to grow from $3.2 billion in 2010 to $16.9 billion in 2015.

Despite the benefits of quantitative research, organizations need to make sure they don't put all their eggs into one basket and spend all their money on number-crunching, and instead also embark on qualitative research. As Kerry Bodine, vice president and principal analyst at Forrester Research, points out says in a recent blog post, "To create a complete picture of your customers and what they really need, you need a combination of quantitative and qualitative research methods." Waqar Hasan, CEO of InsightsOne, notes that qualitative data can be a great complement to other types of research that organizations are already conducting to get a good view of their customers.

Gaurav Vohra, co-founder of the Jigsaw Academy, agrees and warns business leaders not to underestimate the importance of qualitative research. "Many people believe, erroneously, that qualitative research is not obsolete, and that quantitative analysis can do everything qualitative research can do, and it can do it better." However, Vohra argues, while quantitative analysis is a powerful concept that has widespread applicability in a business environment, it isn't the answer to every problem.

In fact, Ellie Hutton, vice president at Vision Critical, argues that organizations cannot reach their goal of becoming customer centric solely by looking at numbers, but also need to integrate qualitative research. She says qualitative research can give the real reason behind what numbers are saying, the why behind the what. "Qualitative research brings the customers' voices to life," she says. Further, it's a misconception that qualitative research is prohibitively expensive since organizations can leverage communities, social media, and sentiment analytics to gain insights directly from their consumers.

Fast-food chain Wendy's uses customer communities as a source of qualitative data. Jan Trent, Wendy's manager for customer insights, says the communities were set up specifically because the organization felt the need to leverage both qualitative and quantitative research, and is asking customers to engage in dialogue and take part in qualitative surveys. "They help us make business decisions," Trent says. "Qualitative data adds more depth of insight and tells us more than numbers," she notes. Trent adds that customer comments are also used to better explain to executives the need for certain decisions, allowing them to hear the information in customers' own words. Trent adds that the panels are also helping Wendy's make the most out of its research budget since it can increase the number of studies.

Wilson Raj, global customer intelligence director at SAS, notes that qualitative research has always been very central to a company's inside efforts. "It all starts with surveys and focus groups," he says, adding that the transformation that has been taking place in recent years revolves around the popularity and use of social media which has made information straight from customers' mouths available to business leaders. "Companies are looking at social not just as an engagement channel but also a research channel," he says.


Qualitative research answers vague questions/unchartered territory

In fact, qualitative research can be instrumental in uncovering problems and point out issues that the organization's business leaders are not yet aware of. "Qualitative research is an undirected research/analysis activity and is used when we aren't sure what to expect, or to define the problem or develop an approach to the problem. It's also used in cases where we don't have historical data," Vohra explains. He says when Amazon wanted to launch its new "search inside the book feature," the company couldn't rely on quantitative research since this was a novel idea. "In such a case, even a strongly analytics-focused organization like Amazon has to rely on qualitative research in the form of focus groups, feedback sessions, etc to make the right decision."

Some organizations are also using qualitative research to determine the questions they need to ask in quantitative analysis, explains Zubin Dowlaty, Mu Sigma's head of innovation and development. Dowlaty notes that one of the main strengths of qualitative research is its open-ended form, which allows audiences to share insights in their own words without restrictions. "It gives organizations a better understanding of their audiences," he notes. Further, because qualitative research is less restrictive, it allows organizations to get access to insights which they weren't even looking for.

Vohra says U.S. convenience store chain 7-eleven has managed to effectively combine qualitative and quantitative research. He says the huge volumes of transaction data gives information, for example about which products to sell and which promotions are working effectively, but offers little information about why customers shop with the chain and who its customers are. The company fills this gap through qualitative studies that conduct interviews with people who have just made a purchase. "This enables them to get additional insights like the fact that a big chunk of its customers are office-goers who come into a 7-eleven in the morning to pick up coffee and a bagel or sandwich," Vohra explains.

While transactional data can give some important insights, Holger Haedrich, Ph.D., solution architect and consultant at GMC Software Technology, agrees that this is limited. "Because individuals often differ from the average, rule-based assumptions aren't always precise," he says.

Haedrich says one of the advantages of qualitative research, which he refers to as "1to1 feedback process," is that it allows businesses to collect more in-depth information in addition to the data generated by their CRM systems that can reveal more detailed individual preferences and motivations.

Leverage social chatter for greater contextual information

Social media has opened the doors for organizations to get feedback directly from their customers who are many times willing to speak about their experiences with different companies. "Social makes everyone available—customers, competitors customers, channel partners, and detractors," notes SAS' Raj. James Kobielus, Big Data evangelist at IBM, adds that organizations need to determine which social media insights can be most beneficial to them. "Even within social media, some of the sources might be golden, but you need to figure out which ones to mine and which ones you can safely ignore," he says.

Finally, the biggest strength of qualitative research—complexity—can also be one of its main drawbacks. "Using data gathered from observations and interviews provides all sorts of contextual and emotional background to an issue, but that is precisely what can make it unreliable or unwieldy," Raj says. This makes it more important to merge qualitative and qualitative research for the best view of customers.