Market research – shrink costs, maximise results!
For many senior managers, market research has a bad reputation. It is considered as ineffective, inaccurate or even a complete waste of time and money. In many cases they are right. But the reason behind is not the market research profession itself, it is rather how the topic is implemented within the organisation. If applied in a proper way, market research can be one of the most important drivers for business success. The good news: re-calibrating the set-up does not only mean increasing research effectiveness. In most cases it comes along with significant cost reductions.
Quantitative market research has become a lot cheaper over the course of the last years. The main reason behind is the strong shift to online interviews, which are way more cost efficient (and in most cases more effective, too).
However, this leads to the situation that companies start to measure anything that is measurable, no matter if that makes sense, or not. As a consequence, research departments are overloaded and blocked with administrative tasks instead of having enough time to fulfil their original task – distilling insight from information. Ultimately, data graveyards are produced and the outcome does not lead to any valuable action.
At the savvy company, we strongly believe that every Euro invested in proper research is a well invested one, unless the purpose of the research is of strategic relevance, research questions are precisely defined and the methodology is fitting to the task.
To get the most out of your research department, strategic direction as well as strong governance are required. The decision to change is an easy one as it is a win-win situation for market-/ customer-related units as for the finance department. The optimisation leads to a strong increase in capabilities (better strategic decisions, better marketing decisions and product development etc.) and it comes along with a significant reduction in spend for market research.
So, what are the required steps?
1) Assess all your existing market research plans and evaluate, if the research is beneficial for the organisation (e.g. it simply does not make any sense to measure your brand attributes on a monthly basis, if the business is not steered along them). The same applies when research is stating the obvious, which according to our experience is one of the most common problems. In our thinking, with a few exceptions, market research should be reduced to topics of strategic relevance. (Only) measure what matters!
2) Evaluate the governance of market research in your organisation, including processes and stakeholder roles. For instance, a typical problem is the ‘Silent Post Service’ phenomenon: somebody in the organisation has a research question. Then the person tells it to the researcher, who writes a briefing and submits it to the research institute. They carry out the research and the information is going the entire way back again. With that many interfaces in the process, the likelihood that the result answers the original question of the business is very limited. With a more direct governance model and revised roles and responsibilities, the quality of the output can be dramatically increased.
3) Last but not least, assess the methodologies applied. (Still) we often see, that the wrong methodologies are applied for specific questions (e.g. focus groups are used to develop propositions, expensive telephone interviews are performed where online interviews are more targeted, etc.). When assigned with the task to optimise a market research set-up, we achieve cost reductions of 30% and more. But more important than this is the increase of effectiveness which is priceless. Customer insights will eventually unfold their potential to drive corporate value.
If this sounds interesting to you, get in touch!
the savvy company is a strategy consultancy helping organisations to grow through increasing their customer centricity. We do this by combining strategic know-how with leading edge methodologies in research, experience design and innovation.