The future success of your business depends on your ability to perform meaningful market research. Does this come as a surprise? It shouldnâ€™t. Market research allows you to:
- Measure customer satisfaction
- Make your marketing more efficient
- Find new customers
- Develop a customer-centric product development cycle
Assuming that you are selling a useful good or service, knowing any or all of the bullet points above would be considered useful by most business people.
A study done by an Australian research group discovered that firms that had strong market research capabilities had greater sales growth, profitability, customer satisfaction, and new product success rates were firms that had significantly greater market research abilities (Vorhies, Harker, Rao 1999).
The data show a correlation between a firmâ€™s ability to do market research and success. Can one operate a successful business without strong market research abilities? Sure. Lots of people are fine owning and operating companies that succeed; meaning that they do not go out of business and turn a modest profit. However, the most successful companies have strong market research abilities.
The data from the above study yield the conclusion that companies performing in the 95th percentile in terms of pertinent growth metrics are those with way better than normal market research abilities.
Would you like your key growth metrics to be in the 95th percentile within your vertical?
Market research is a complicated thing. This is because the research revolves around people. However, here are some things you might want to know when trying to improve you market research abilities:
- Be brave â€“ When you start digging for information, sometimes you find stuff that will shock you. Think of Dominoâ€™s Pizza and their new advertising campaign.
- Use statistical analysis â€“ In the book Meaningful Marketing, Doug Hall says, â€œStatistics are required if you are to make decisions that are reliable and reproducible. Research without statistics is about as reliable as your horoscope.â€ Statistics are not fun to do, but an understanding of what data are saying is imperative to improving your marketing research ability.
- Use many research methods â€“ From the Dominoâ€™s video above, it appears that they are making a very wide set of assumptions based on some focus groups. Iâ€™m sure that Dominoâ€™s would not try to overhaul their pizza operations based on a few focus groups. Iâ€™m sure they had more data, but regression analysis outputs are not very exciting to look at in commercials. When trying to improve your market research abilities it is important to become familiar with many research techniques and each techniqueâ€™s strengths and weaknesses. For example, focus groups provide a lot of depth to your research, however, focus groups are small and should not stand alone as representative of your target market or customer base.
- Think like a scientist â€“ Back in school I took a lot of science classes. These classes taught me, through example and practice, that nearly all major scientific discoveries have come about via the use of the scientific method. This means that a scientist made an observation, asked a question, proposed a hypothesis, designed an experiment, collected data, analysed the data, made a conclusion, and in many cases asked another question based on the conclusion â€“ which started the process all over again.
I am not suggesting you set up a lab and hire an assistant named Igor. I am suggesting that you have a curiosity as to why things happen the way they do with your business, your market, and your customers. Then use data to draw conclusions not hunches. People used to have a hunch that the world was flat. They also used to have the hunch that our veins were filled with air. Donâ€™t make a hunch that could cost you money and lost opportunity.
Another option is to hire someone that can either teach you how to research, coach you through it, or do it for you. We, Serfwerks offer all of these options through our training, consulting, and marketing services. A shameless plug? Perhaps, but it is important that you know that there are people out there that can help you.