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.

Decide what methodology best suits your needs.

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About the Author

Noel Peebles
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