Reveal Consulting - Integrated Marketing Strategy, Development, Implementation

Market Research: Now More Than Ever

Good companies never stop learning. They use market research to stay on top, even during tough economic times.

Whether your goal is to engage key stakeholders more, gather new insights and innovative ideas, or simply to validate the business direction, well planned market research creates a competitive advantage.

Common uses for market research include:
• Identifying and targeting prospective clients
• Seeking ways to expand relationships with existing clients
• Targeting prospective employees for hires
• Finding targets for mergers or acquisitions and then analyzing the opportunities
• Researching targeted industries and providing data help account managers and new business development teams
• Making decisions about geographic and/or target industry expansion
• Launching new service or product offerings

Measuring Return on Investment for Market Research
Is it possible to measure the impact of market research on the bottom line? Sure. But, it’s important to also remember the objective of that research. Some research is not intended to drive sales. For that research which should increase sales or boost profits through efficiency, consider these steps in your ROI calculation:
1. The primary objective of the study
2. Analysis of study findings, specifically those that relate to your primary objective
3. After action has been taken on the important findings, calculate the incremental effect on your sales (or expense management)
4. Quantify the effective monetary difference between the pre- and post-research terms
5. Divide that cost difference by the cost of the market research

Increasing ROI for Market Research in a Recession
Budgets are tight now but that doesn’t mean you need to forgo market research. Good research can be affordable and deliver meaningful results. Remember to focus on a clear business outcome for each market research study (e.g. higher market share, lower cost of customer acquisition). Additionally, use revenue-focused questions in virtually every survey, especially since revenue is key during a recession. Finally, you can often save money by reducing sample sizes when lower levels of confidence are needed, using secondary or syndicated research as a preliminary tool, and consider taking your research panels and surveys online.

Still not convinced market research is important? Ask yourself these questions:
• Can you afford to lose money on ill-conceived programs?
• Are you sure your new program won’t negatively impact your brand or other products/services?
• Have you asked for input from current or prospective customers that can be completely objective about your brand and/or services?
• Do you truly know what customers need and want from your business to keep them loyal and buying more?
• Are you sure your prospects know all the benefits of working with your company?

Now more than ever, it’s time to get the answers that lead to a solid understanding of your audience and market. Then, you can be sure strategies match need and can yield the best possible outcomes.

Market Research:
A Tale of Two Companies

Consider the case of the venerable grocery store chains A&P and Kroger, notably chronicled in Jim Collins best selling book, “Good to Great.” Collins and his research team sought to find out why one company, A&P, failed to keep up with the competition while the other, Kroger, saw supersonic growth rates. Both firms were about the same size and had both independently conducted market research in the 1960s which showed consumer tastes were evolving. Customers wanted larger stores with more food choices and additional convenience offerings such as drug stores.

Kroger took the findings to heart and revamped their stores. A&P dismissed them as a fad. The winner? Kroger in a landslide. A one dollar investment in Kroger in 1973 would have netted $198 in 1998, nearly ten times the growth of the general market and more than 80 times that of the nearly bankrupt A&P.