A market research program will help your business as long as you ask the correct questions. By Nicole Richards.
The famous maxim ‘knowledge is power’ is more than 400 years old; yet in today’s instant information age, the words ring truer than ever. Failing to stay abreast of changing consumer preferences and trends in highly competitive markets can be detrimental to market position and growth.
“Market research can help drive business,” Peter Harris, National President of the Australian Market and Social Research Society (AMSRS) says adamantly. “Even a small research investment can have a big impact by reducing risk and shaping better outcomes.”
Good research has the potential to give any business a competitive edge; the main challenge is how to get it right. Market researchers in Australia turn over $720 million each year and employ 12,000 people. The industry is heavily regulated and governed by strict privacy laws and the AMSRS administers a program of professional accreditation.
Getting the most from research
With hundreds of market research agencies to choose from, the initial challenge is finding the right one.
“The most important thing is to find a researcher that really knows and loves your business,” says Harris. “They need to understand the category you’re working in so they can ask the right questions to deliver the right findings.”
Getting the most from your research agency also demands a close partnership. “Honesty is so important,” says Imogen Randell, Managing Director of Quantum Market Research. “We need to be let into that inner circle otherwise research only goes so far.”
Research findings can have far-reaching consequences, particularly if they undermine the prevailing business strategy, and Randell recommends clients consider the strategic implications. “You must think through where the research will end up in the organisation and how it will be used,” she cautions.
Engaging key internal stakeholders is also a smart move. Not only are there benefits in getting high-level support, it can also be a revelation for senior management to hear feedback firsthand.
“Executives are sometimes quite removed from the average Australian lifestyle and income level; they can lose sight of their average consumer,” says Randell.
Getting to the heart of the matter
At its most fundamental level, market research is about getting answers from the right people, explains Penny Burke, Director of Essence Communications.
“At the heart of what you’re trying to do is find out what people really think. The trick is knowing who to ask. For example, if you’re working on a road safety campaign that’s targeting young male drivers, there’s no point asking nannas about their driving habits.”
The skill in market research is interpreting those findings and understanding their context.
“It is crucial to understand the difference between what people say and really mean,” says Burke.
“If you ask people if they think it’s important to buy Australian made, most people will say ‘yes’. But if you were to go home and check their cupboards to see what they really buy, the reality is much different. A good researcher is able to unravel the difference.”
There’s a vast difference between information and knowledge; the mere act of gathering data does not equal good market research. The tendency to collect unnecessary information is a common mistake. “Don’t waste money by overcomplicating things,” advises Harris, whose policy is to keep things simple.
There can also be a tendency when researching for businesses to confuse an observation with behaviour.
“Just because someone says a proposed pricepoint is too expensive in a focus group doesn’t necessarily mean that the product needs to be cheaper. You must understand broader marketing principles and know that a focus group is an important input but can’t determine what’s best for a brand,” Burke explains.
Making your budget go further
Though many research budgets go into the tens of thousands, conducting cost-effective research is possible. Good planning, clear research objectives, new technology and some lateral thinking all help.
“Make use of whatever technology is available. Look at different methods such as online; set up internal forums with a customer database; or set up multiple touch points with a customer,” offers Randell.
Harris suggests taking advantage of cost-sharing opportunities. “You could syndicate the research with other parties to split the cost,” he says.
Burke also expects that the tools will also evolve. “I believe that the important research skill in the future will not be just about what people think right now, but understanding what needs to be said to the people and customers of the future.”