Market research produces a lot more than numbers and pie charts. It reveals market intelligence.
Plugging into your target market can uncover hidden opportunities or lurking competitive threats. It can tune into emerging trends and yield insight into how your customers view your products and your reputation.
Thoughtful, consistent and disciplined use of market research can improve decision-making, minimize risks and enhance branding, messaging and sales.
So with all those benefits, why do some organizations continue to skimp on research? Good question.
Some organizations say market research costs too much. Research does require an investment, but when spending money to position your product or service in the marketplace, why wouldn't you want to know what works — and what doesn't?
If you were investing in a mutual fund or buying a new house, you would do some legwork. How has the mutual fund performed over the last three years? Does the house have an old roof? That's market research.
The only difference is that good market research is more focused — it tests your target audience's responses; it probes to get true consumer perceptions; it is more than a one-off, finger in the wind assessment.
Another blow-off of market research comes from executives who think they already know the answers. In fact, some times they do, especially if they have their ear close to the ground where their consumers walk. But thinking you know the answers and having a high degree of confidence, based on actual research, are very different animals.
For one thing, the savvy executive who may have his firm's target market zeroed in may not be the firm's final decision-maker. Without research, the executive has to lead with his gut, instead of with credible market research findings. If the product flops, everybody in the organization is at risk. That risk could have been mitigated by obtaining reliable data on consumer attitudes, preferences and needs. Market research provides a basis for sound decisions.
Another argument to torpedo market research is that it doesn't really produce quality information. That can be true if market research sampling fails to represent your target audience or the questions aren't forthright and rigorous. However, many market research firms strive to deliver actionable data to inform brand positioning, features to include or exclude and communications outreach, including the most highly trafficked channels.
For product developers who fall in love with their bells and whistles, this can be unwelcomed intelligence. But it can prevent a company from over-designing and, consequently, overpricing a product.
Creative professionals who design advertising also can disdain this kind of research because it inhibits their freedom to produce ads that win awards, but can't sell the product.
Market research isn't an end in itself. Its purpose is to make you smarter about your target audience. That market intelligence can save you a lot of heartache and make you a lot of money.