Here we go. You have convinced the powers that be within your organization that you need to do some market research. You were even allocated a reasonable budget… (Not quite what you asked for but one step at a time here!) Now, you need to demonstrate to your organization that this was the right move. Simply conducting market research is one thing; doing it properly so that it yields actionable insights is another thing altogether. Here, we share some guidelines on how to do market research that will yield actionable insights.
The ABC’s of Market Research
Let’s begin with a definition. Entrepreneur magazine defines “market research” as follows:
The process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business’s target market, the industry as a whole, and the particular competitors you face.
Hubspot, a global leader in customer relationship management software solutions, was a little more succinct in their definition. Simply stated, “Do we know what the demand is for this product? Who’s even looking for [it]?” Which definition you follow, or even if you prefer your own, one common theme that emerges after every client call on the subject is the question of “How do I do market research?” And, even more importantly, “How do I do market research that will yield actionable results?”
Here, “actionable results” can mean different things to different people and companies. Distilled down to basics, actionable results can be a direct measurement of whatever it is you are trying to impact or change. For example, revenue, call volume, profits, number of customers, number of repeat customers, etc. The actionable results can be more indirect and focused on the delivery of what you are changing. Specifically, marketing campaign metrics, pricing, delivery time, number of returns, etc. One additional option is a hybrid of the two where the impact of how to do market research is discernable upstream in the new product development process where customer feedback is influencing what you will make, how you will make it, market it and sell it. All this happens even before you make a single thing.
At KL Communications, we have some good examples of market research and how to do market research in such a manner that it yields actionable results for our clients. One particularly notable example was with our client, Bacardi®, who observed lower than expected revenues with its premium spirits line. The client had surveyed, polled and interviewed customers in the market to buy liquors and spirits to determine why they were not buying the premium brands offered. In an example of how to do market research to yield actionable results, our team took a creative approach. We hosted an online activity that tasked customers to design the ideal retail experience in a liquor store. The surprise finding was that customers were afraid to touch the expensive bottles which were not only on top shelves (sometimes above their heads) but they were packed in so densely that there was no way to safely grab them. Bacardi conducted a pilot in a few retail stores where the premium bottles were placed on lower shelves with more space between them. The huge success of the pilot led Bacardi to instruct its retail outlets nationwide to make the necessary adjustments and revenues for their premium brands skyrocketed.
What Doesn’t Work in Market Research
On the topic of how to do conduct market research, the biggest “No-No” is, collecting data then doing nothing with it! Market research falls within the “use it or lose it” category. An equally perplexing error is conducting market research with, for example, one focus group of eight people, and calling it “done”. Doing so puts your entire strategy at risk: you simply don’t have sufficient data to make a critical decision.
Other errors are more subtle. Perhaps the best illustration of the “repetition error” is conducting the same survey, repeatedly, asking the same customers the same questions. Because of this reductive approach, customers will become desensitized to the questions and either flip through them mechanically on auto-pilot answering them the same way they did last time and the time before that. They may answer randomly just to get it done so that they get the incentive that was offered. Or they may choose to not answer them at all. The direct result is not only unactionable and suspect data, but a tainted brand, disinterested customers with reduced loyalty and a compromised market research program that management will soon be questioning the effectiveness of.
When you’re contemplating how to conduct market research and are in the process of designing your study, don’t be shy – reach out for help. Perhaps you search online forums or you consult an agency. Either way, what is critical is that you define a clearly articulated set of objectives for your study with corresponding questions that have been deliberately designed to address those objectives. Haphazardly approaching a group of eager participants can be detrimental on multiple levels. One, you can personally and professionally lose respect engaging in an effort for which you are poorly prepared. Two, those participants will leave your study confused and questioning your brand. Third, the data you collect will likely be limited and perhaps even unactionable.
How to do market research effectively requires careful planning. A phased approach with the opportunity for strategy refinement and study corrections between each phase to manage costs and ensure the study stays on track. What works? Essentially the opposite of everything mentioned above that doesn’t work.
How to Conduct Market Research
There are a few principles to follow if you or your team is considering how to do market research.
- Define the goal. What do you hope to accomplish by the end of the study?
- Set the objectives. What do you want to learn?
- Establish the go/no-go criteria. What marks a “pass” and advancement to the next phase vs. what marks a “fail”?
- Identify your stakeholders. Who’s in? Out? Who really needs to weigh in?
- Craft your questions carefully. Ask questions that will provide insights into the answers that you don’t Of course, to get the validation and re-affirmation that your answers are still relevant, sporadically insert some questions that you do know the answers to.
- Mix it up. Vary the methodology and take advantage of technology (e.g. Surveys, discussions, co-creation and social media). If you are going to ask the same people the same questions, keep the repeats to a minimum and consider an alternative format to verify that you get the same answer to the same questions, only asked in a different way.
- Be judicious. Don’t take the initial round of insights as gospel. Take your time, analyze it from different perspectives, let the data be seen by different experts to test it out.
- Generate a digestible report. Think about incorporating visual analytics to simplify the responses and to more easily showcase trends discovered in the data.
How to do market research well requires experience, as well as some experimentation. Done properly, there are numerous benefits. Customers will provide that validation that you’re seeking or that critical feedback that can spark a refinement in your product, business strategy or operations that will make all the difference in your revenues and brand ranking. Increased loyalty and potentially even brand evangelism can result if you know how to do market research that yields actionable insights.