When Is Market Research Necessary?

When Is Market Research Necessary From Drive ResearchAlways.
While we are biased and really believe this, we also understand there are specific occasions or events which are more likely to warrant market research than others.

Each scenario below details a very specific business problem or challenge and how market research can help address the issue.

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Asking yourself, "When is market research necessary?" In short, the answer is always. This article will help clarify the most common occasions when a business uses market research.

Scenario 1: Declining Sales

No business wants to see a downward trend in sales or revenue. An organization may or may not know why they have seen a dip in sales over an extended period of time. If your company lost a major client in the past 6 months, it’s understandable your sales would decline.

However, your sales team may have no idea why sales have recently declined. This is where a customer survey would prove extremely helpful. There are several topics you can cover in a simple online survey. Ask about the usage of competitors, changes in satisfaction of the product or service over the past 6 months, why are customers buying less, etc. These answers will uncover a wealth of insights to help your team understand the decline in sales.

Don’t forget about non-customers either. This is an audience which will lead to growth so understanding their habits and needs is vital to your business. To learn from this audience work with a market research company to conduct a market survey where your questionnaire reaches a more random population of non-customers of your product or service.

Here you can ask about whether they are aware of your brand, their perceptions, factor(s) which impact usage, likelihood to consider the brand, and what it would take to use the brand.

Solution: Survey your customers (and non-customers).

Scenario 2: Prior to a New Marketing Campaign

Before you launch that pretty new advertising or marketing campaign, you should always create a baseline. Prior to launch, what does your awareness of your brand look like? What is your perception? What do target customers associate with your brand? How likely are they to consider buying? Why or why not?

These are critical metrics to obtain pre-launch of your advertising campaign. The survey will also uncover what messages resonate most with your target audience, sources your brand should advertise in which offers the best return, and identify potential problems with your advertising campaign before you get started.

A market survey can solve all of this for you and give you the answers you need. Work with a market research company to collect a sample of your target audience in your geographies. It is important to survey a broad population to understand these KPIs, not just your customer database. This would invoke sampling bias.

Solution: Conduct a market survey to collect brand metrics.

Scenario 3: Prior to a New Product or Service Launch

New product development research is one of the more sexy types of market research. This involves surveying or conducting qualitative market research with your target audience to better understand usability of the product or service.

  • What do people like?
  • What do people dislike?
  • What improvements would they suggest?
  • What are their barriers to usage?
  • What do people expect to pay?
  • Where would people expect to buy it.

In-home usage tests (HUTs) are popular for new product development. These types of projects involve recruiting a targeted audience, shipping or signing them up for a trial product or service, and then following up with them for feedback. Either during the testing phase, after the testing phase, or both.

IHUTs give you the insights you need to understand how potential customers interact and engage with the product or service before launch. It is critical because it allows your product team to identify and make key changes prior to launch.

Solution: Conduct in-home usage tests (IHUTs) with the product or service.

Scenario 4: A Rapidly Growing Organization

Your organization is growing quickly. First off, that’s a good thing. However, this does come with challenges. How is your company culture adapting? Is communication still strong? Are your employees loyal and do they want to stay long-term? What do they like best about your organization? What do they hate?

All of this can be tackled through a simple employee engagement survey. It is essential to use a third-party market research firm to manage this process to ensure confidentiality. Employees will be fearful of sharing criticism if they believe their feedback will be compromised.

A good employee survey company will offer recommended questions, manage the process for you, create a report, and provide you with benchmark data to see how your organization compares to peers. You’ll identify what needs to be changed to keep your organizational culture running full steam ahead.

Solution: Use an employee survey.

Scenario 5: To Measure Performance Over Time

Let’s say you hired a new staff to manage your call center. You learned through a past survey the prior representatives were not friendly, uncaring, and unhelpful.

Your organization instituted a new training program with incentives for highly satisfied clients and cases. This is something which needs to be tracked as part of an ongoing survey sent to those who have an experience with the call center.

Another example is measuring a metric like customer satisfaction on an ongoing basis. As a market research company, we would argue measuring Voice of Customer (VoC) or Customer Satisfaction (CSAT) once a year is not enough.

So much goes on with customer relationships in between those surveys you are doing yourself an injustice by not surveying more frequently. Surveying more frequently allows you to keep the pulse of your customers and manage those cases appropriately. The survey can identify bad experiences quickly by flagging them and sending those cases to a team for resolution.

Solution: Develop an ongoing survey program (transactional, daily, weekly, monthly, etc.)

Scenario 6: To Better Understand Your Customers

This is the essence of market research. Listening and learning from your customers. Far too many companies have a gut feeling or instinct on who their customers are but there is so much more which can be gained through a formal market research study.

Profiling or segmenting your customers is key. You’ll want to identify who:

  • Your largest spenders are
  • What audience is growing the most
  • What audiences you are losing your customers from
  • Geographies of your best customers

This helps your marketing team create pinpointed and customized messages which resonate with your target audience.

A customer insights analysis study simply takes the physical addresses from your customer database and appends third-party data to provide you with a wealth of insights. It can profile your entire customer database on age, gender, income, geography, children in the household, household size, and personas.

Solution: Conduct a customer insights analysis project or database analysis.

Scenario 7: To Uncover Competitive Intelligence (CI)

We’d all love to be that proverbial fly on the wall of a competitor. How do they treat their customers? What do they do better than us? Why are they growing and we are not? What is it about their service that customers love?

All of these can be answered through CI market research. One of the best ways to research your competitors is to hire a third-party market research to conduct mystery shops. Let’s say you are a bank trying to understand in-branch services at a credit union.

The market research firm can hire staged participants to visit the branch to open a loan, inquire on a checking account, acquire paperwork for a car loan, etc. all while they engage with the teller, loan officer, and branch manager. Following the experience, the participant evaluates the session and rates the staff and includes a lot of details and notes on the exchange.

Solution: Mystery shopping visits, calls, or emails.

Scenario 8: To Expand Into a New Market

Do your homework. Expanding into a new geography or new market is a large venture which requires a lot of resources, time, and know-how to get it right. The more you know about the new market the better.

  • Who are the players?
  • What are their weaknesses?
  • What are their rates?
  • What are some of the trends we are seeing?
  • How much market share can we realistically claim in year one, year five, year ten?

A feasibility study is a common type of market research project our company executes. It typically involves 3 components. These include:

(1) Stakeholder interviews with your core team members, executives, or experts

(2) Market analysis to collect demographics of the new market profile

(3) Market survey where you survey the target audience to understand behavior, usage, and opinions which would impact success.

All of this put together reduces the risk of your expansion into the new market setting your organization up for resounding success.

Solution: Feasibility study to the new market.

Contact Our Full-Service Market Research Company

Asking yourself, “When is market research necessary?” Hopefully, this article helped clarify the most common occasions when a business uses market research.

Market research is multi-faceted and can result in a lot of benefits for a company. Although we deem market research as always necessary for a successful business, there are times which call for it more often than others.

Need a proposal from our market research company? Contact us 1 of 4 ways below.

Message us on our website
Email us at info@driveresearch.com
Call us at 888-725-DATA
Text us at 315-303-2040

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