Why Companies Large and Small Should Research their Market
You will no doubt at some stage or another, have been on the end of a market research survey. I’m not talking about those people trying to sell you something or get your email address or phone number for spamming and nuisance call purposes, but genuine market research. Serious marketing companies have long realised that the more they know about their customers, the better they can target them, with the right products and services, marketed through the right channels at the optimum price, and promoted through the right media at the right time with the right message. This leads to more, happier customers, more efficient use of marketing budgets, better customer retention, and happier employees and shareholders. So the question is not “Why do market research?”, but rather “Why not do market research?”
Some of the reasons given by businesses that do not do market research are typical. They include: “If our customers weren’t happy, they’d tell us.” Ask yourself how often you do that in real life. Mostly, unhappy customers will just go and buy from your competitor down the road, or more likely, just one click away on the web. The author once conducted a survey for a very large communications company with their biggest client. We discovered that our client was being excluded from tender invitations because of poor service, even though they only had one competitor. They didn’t know this. Fortunately we were able to start a conversation between our client and their client that saved the day
Another business thought it was losing customers because of economic problems. Aa quick survey of departing customers revealed this was a misinterpretation of their not appreciating the value for money they were getting. It was a simple matter to remind them and within three months the customer attrition rate dropped from 28% per annum to 10% – putting an additional 25% on the bottom line for no cost to the company whatsoever.
Another reason not to do market research is because it’s easier just to copy what your competitors are doing, but this means you will only ever be as good as they are. Being slightly better at what’s important to the customer might make all the difference.
There are a number of standard surveys that are easy and cheap to deploy, and easy to assess. The most obvious of these is a simple web site survey. With this, you can quickly find out whether people are finding your website easy to use, if they can find what they want (whether it’s buying your product, or merely looking for information), how they found it, whether they’ll come back and so on.
Some business owners have been heard to say that web surveys are what all the big companies do. It tends to be the owners of smaller businesses that say this. It doesn’t seem to occur to them that the big companies might just be on to something, and why not do the same thing and at least looklike a big company?
One of the most valuable customer (or potential customer) surveys any business can carry out is with people who have not bought. If you’ve spent a lot of time, effort and money pitching for a piece of business and failed to win it, it’s frustrating not knowing why, and failing to find out can lead you entirely down the wrong path. Another business with which the author has been closely connected was determined never to be beaten on price and set itself up to be very cost-effective. On the few occasions it did not win business, it made the effort to find out why, using a simple online survey. The temptation otherwise would have been to lower the price as far as possible, but it quickly became apparent that the reason that some of the opportunities were being lost was because at least some of the prospects did not believe the pricing to be credible and did not think they would receive good quality work for the price. Prices were put up, in certain circumstances, and business increased. Without this simple and easy research, the obvious conclusion would have been to continue to lower prices, leading to a vicious circle in which the business became less and less credible. And less and less profitable.
Another area where people simply often guess is in marketing. For many businesses, marketing spend, in the form of advertising, direct sales, networking, print and of course web site design and social media is decided purely on guesswork. Few businesses really measure the effectiveness of their marketing – although they think they do. Tracking how people reach your website or find your phone number is better than nothing, but you really need to do is go back through their purchase process to find out what sparked their initial impulse to find out about you (and your competitors) and what they did next, right up to what terms they put in the search engine to find you. A simple survey will give you the answers to this.
The good news is that all of the business improvements that can be achieved by understanding your customers better are now highly affordable. Online surveys can quickly be deployed that will provide the answers – and therefore pay for themselves – often within days.
So the choice comes down to running your business based on hearsay, anecdote and conjecture (otherwise known as guesswork) and hoping for the best, or being a little scientific and actually measuring what your customers, future customers and ex-customers really think, and actually giving yourself that simple but important advantage over your competitors.
If you’d like to find out how GSA Business Development can help Generate Growth for your Business or book one of our new business development and marketing strategy workshops, contact us now on 0845 658 8192 or send us an email.