The naysayers of market research often give the process a bad rap. Some of the common negatives misconceptions include market research being too expensive or too time consuming. Many feel it's money is better spent elsewhere like advertising or marketing. For those who have never embarked on Voice of Customer (VoC) or market research in the past, there is a certain ambiguity around the value and ROI of the process.
Market research needs to be viewed as an investment. An investment which creates both short-term and long-term benefits for a business. Market research carries several core benefits for your business. The investment payoff comes from the knowledge, power, and confidence in the decisions you make to ensure they reflect what your customers want.
Market research is an investment.
Let's cover some of the most common types of market research needs and the benefits they can provide a business or organization.
1: To Understand Viability of a New Product or Service
Market research can be used to test the demand and appeal of a new product, new service, or new business venture. By conducting a feasibility study it reduces the risk of failure. This type of research uncovers what's most appealing and least appealing with the intended audience. Some of these studies even go as far as estimating demand, usage, and sales of a new product or service.
2: To Better Understand Customers and Improve the Customer Experience
Understanding the customer is the key to any good strategy. It's been said "those who understand the customer best win." Market research can help you profile and segment your customers based on key demographics such as gender, age, household income, presence of children, ZIP Code, and others. Research can identify target customers and segment them into specific profiles and classes.
In addition to understanding the customer, market research is also used to improve the customer experience (CX). Businesses collect data on what customers like best, what they like least, what are the drivers to loyalty, and other questions which can point to motivations behind buying a product or service. Improving the customer experience is the next frontier of differentiation among businesses.
3: To Improve Advertising and Marketing
Some common examples here are using focus groups or online surveys to test creative, advertisements, or videos. Before launching a major advertising campaign, many agencies use market research to gauge impact of their advertisements before they hit the market. These businesses want to understand what can be improved in the campaign, product packaging, logos, or branding.
4: To Set Up Your Business for Strategic Growth
All types of market research involve strategy development. Whether it is collecting data to better understand customers, improve advertising, improving the customer experience, or understanding the viability of a new concept, all projects impact strategy. The recommendations and action items developed from the market research is where the value lies in the process. In addition to the data and the feedback, it's also what can be suggested and improved based on the feedback.
Market research takes the "gut" out of decision-making and provides businesses with fact-based and evidence-based direction.
Organizations often turn a blind eye to market research because they do not see an immediate return. They fail to recognize that a few dollars up-front eliminate poor performing campaigns, strategy, and advertising. Spending and budgeting a little on market research early in the process eliminates risk of failure and improves the path to success.
Several other immediate short-term benefits have evolved of late in the industry. Specific to online surveys, we wrote about 3 ways to improve the ROI of your customer survey a while back. The immediate short-term benefits include asking customers if they would like a follow-up and flagging those cases and asking for testimonials as part of your survey process.
So is market research worth the cost? Call us biased, but in a word: "Yes". Voice of Customer (VoC) and other market research costs depend on the size and scope. Many projects can be completed for as little as $3,000 to $3,500.
Contact Drive Research
Drive Research is a market research firm in Syracuse, NY. Questions about how to get started with market research? Need to obtain feedback on your product concept, marketing or advertising, or customer experience?
Contact us at firstname.lastname@example.org or call us at 315-303-2040.