Why Researching Your Market Can Pay Big Dividends

Over the years I have seen a lot of companies waste
a lot of money on market research. In many cases they
commissioned the research simply because they had
allocated a budget for it.

In some cases they didn't even know why they were
doing the research, but just wanted to know more
about the market. In other cases management could
have saved the company a lot of money by just
listening to the feedback from the frontline sales
reps.

In other instances the company initiating the
research failed to ask the right questions or the
research was done to postpone a decision rather
than to assist in decision-making.

Market research can be an extremely valuable
tool when used wisely and it doesn't always need
to cost the earth. For example, you could send out
a questionnaire to existing customers with your
monthly accounts. Telephone surveys can be
reasonably inexpensive and students are often
keen to do this kind of work.

Even an old-fashioned suggestion box can
sometimes yield some valuable information.

The important questions to ask yourself before
undertaking any research are:

1. What do I want to know?
2. Why do I need this information?
3. What decisions will I take once I've got it?

Answering these three vital questions will lead
to ACTIONABLE RESEARCH rather than research
that tells you lots of "fascinating" facts but doesn't
help you make any decisions.

If you decide to contract someone else to do
the research for you, then it is important to
brief them thoroughly.

Here are some briefing guidelines -

1. Clearly state the research objectives.
What is it that you want to know?

2. Supply background information.
What is the history of the market?
Define the problem to be solved or the
reason for the research.

3. Set action standards for the research.
What decision will you take once you have
the answers? For example - "We will use this
research to help us target our advertising
more effectively."

4. Decide who it is you are researching.
eg. Former customers, existing customers,
people living in a certain suburb, people
of a certain age group or whatever.
How would you define the group?

5. Decide what information you are seeking.
Considering the set objectives, what areas
need to be investigated?

6. How about timing?
Does anything need to be taken into
consideration regarding the timing of
the research? For example, the results
might differ before and after an
advertising campaign.

When are the research findings needed by?
Are there any information priorities?

7. Consider what research method would best
suit your needs and budget.
There is no point in using the cheapest
method of researching the market if it
fails give you accurate results. For example,
a written questionnaire sent out with your
accounts is likely to generate a different
response than might be expected from a
focus group.