The stakes are getting higher. Competition abounds. In the USA, there are more than 120,000 ad agencies and four times that number worldwide. According to the US Small Business Association, there are more than 32,000,000 small businesses in the USA (where nearly 80% have employees and hence, are not simply solopreneurs with a side gig). Chapter 11 bankruptcies are up 63% from last year and haven’t been anywhere close to these levels since April 2011. So, what does all this mean?
It means that marketing research is more important than ever before. Today’s marketing requires companies to be more innovative and creative to reach target audiences. Businesses need to employ marketing research techniques that give a voice to the customer through surveys, discussions and other methodologies to stay connected with the changing whims of an increasingly fickle consumer.
Here’s definitive proof of the importance of marketing research in 2019.
The Importance of Marketing Research
Marketing research is not new. The field has been around for decades, some would argue it’s been around for nearly a century. Sure, the names that it’s been known by and the tools and techniques involved have changed, but the primary principle has not changed. Businesses need to know what their customers are thinking. The more they know, the sooner they know, the more time and opportunity they must make whatever correction is needed to retain their customers.
The importance of marketing research goes beyond hearing what your customers are saying. Marketing research must include listening to what they are saying, understanding what they are thinking and then, of course, most importantly, using those insights to inform your strategy and course of action.
Adopting marketing research as a standard business practice provides several benefits.
- It allows your business to address a problem, what’s happening, why is it happening and how do we fix it? Tapping into the collective mindset of your existing and/or targeted audience helps you identify opportunities, either for improvement or innovative new ideas.
- It also creates a two-way communication channel so that your customers can share what they think and how they feel about your brand or new product idea, but it also allows you to communicate back. In this way, you can build rapport with both existing customers and prospects.
- There is an indirect benefit of getting a sense of what your competitors are doing (in a legal and ethical way) by hearing it from your prospective customers. You can dive into why they buy from Brand A or B but not C and identify new business opportunities.
Built-in “go/no-go” decisions are ready for the taking each time you tap into your targeted audience and ask them to test a product or a theory. Asking a few critical questions of a reasonably sized audience helps reduce your chances of that dreaded Chapter 11 filing – and, even more importantly, poises your business to grow.
When Marketing Research Gets It Wrong
Not surprisingly, even the best-made plans can go awry sometimes. That’s certainly been the case for at least a few companies who had the right intentions, and recognized the importance of marketing research but failed to execute. Here are a few examples:
McDonald’s has had its fair share of missteps along the way since Ray Kroc launched in 1955, as you would expect for any business given a multi-decade existence. These two examples of customer connection failures offer definitive proof on the importance of marketing research – but, more specifically – on the importance of doing marketing research right. The “burger with the grown-up taste”, the Arch Deluxe Burger, was launched in response to a survey conducted on adults who did not eat at McDonald’s. The result? An overpriced burger that children didn’t like and one that failed to attract a new audience.
Years later, somehow missing the lesson that the marketing research needs to be conducted on both the existing customer base (who is generally loyal to your brand) plus the prospective customer base, McDonald’s launched another overpriced burger failure, the McLean Deluxe. This burger was designed to entice health-conscious consumers to come in to dine. And they had to come in to dine versus grab’n’go since the burger required around ten minutes to prepare fresh. Once the word got out that the mysterious low-fat filler ingredient was seaweed, all bets were off.
Pepsi®, one of the biggest brands in the world, who really got it wrong in 2017. Their marketing research picked up on the customer sentiment that people wanted change (and hence, adopting a “woke” persona was important to their audience). They heard loud and clear that their audience supported the “Black Lives Matter Movement”. Pepsi’s intention was to spark conversation, but the execution was flawed. It was insensitive and inauthentic. The backlash, the memes and the reaction were swift. Within less than 48 hours of first airing the TV commercial, the ad was pulled and an apology was issued.
When Marketing Research Gets It Right
For every brand that gets it wrong, dozens get it right. The importance of marketing research is well understood by most people, hence the high number of brands that get it right. Customers can be useful as a source for innovation: companies that tap into what customers want – but don’t have – can harness those insights and transform them into new product ideas. For example, Tesla plucked an idea from Twitter. The idea was to keep the air conditioning or heat and ventilation systems operating in the car while the driver ran his or her errands, with some signage that said, “my pet is ok” so that bystanders wouldn’t feel compelled to bash the window in and “rescue” the fur baby. As such, Tesla is currently assessing the feasibility of a “dog mode” for all its vehicles.
Marketing research can help flesh out the feasibility of these seemingly random (or crazy) ideas through a variety of methods. For innovation generation specifically, co-creative tools such as CrowdWeaving® can offer a platform that encourages customers to ideate. The platform allows for multi-way communication where your customers can come up with creative solutions to a problem or create a new product concept while being able to communicate freely with each other, the moderators facilitating the interaction and with you, the client. This co-creative model is key for ensuring that your customers remain an important part of the process because they’re the ones who will be using the product or service and are most likely to give honest feedback about their wants and needs. ConEdison literally invites customer-driven interactions and regards marketing research as a critical investment.
When the importance of marketing research is recognized, when the research is properly executed and the resulting product or messaging hits the spot, that’s the trifecta. A noble goal, but not straightforward to achieve. Work with a reputable marketing research firm and you’ll hit the trifecta, too.