Gaining insight into buying decisions and supplier selection can make all the difference between success and failure. Given the investment of critical resources in product development efforts and go-to-market strategy development, companies often need to explore market reactions, perceptions, and preferences.  Research provides insights into customer expectations and market trends to position your products and services, generate demand, and develop strategies and tactics to offset the competition and/or influence purchasing habits and loyalty. Good research is actionable and enables making more confident decisions.

The merits of market research are numerous. An effective research program increases your understanding of your customer needs, their purchasing process and buying criteria, their product and pricing requirements, what motives their behavior, and their perception of your company and your competitors. Customer loyalty and retention have significant financial implications for most organizations.

Smart organizations invest in and take a customer-centric approach. These organizations establish processes and tactics to tap customer data in order to help make better fact-based decisions about markets, customers, and products.

There are various market and customer research methods.  Some of the more popular research methods include voice of customers, focus groups, surveys, interviews, mystery shopping, along with the use of customer advisory boards.  Before we explore these methods let’s define market research.

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Market Research Defined

Market research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation the organization faces. Research for the sake of research is not a good investment. Research for the sake of gaining additional insight and making better fact-based decisions is money well spent.

Because we live in a dynamic market and customer expectations and needs evolve over time, market research is required on an ongoing basis. Market research helps you develop a base of reference. By conducting research on an ongoing basis you can identify changes, and patterns, and understand factors that are impacting customer behavior and decisions.

Market research is the mechanism for defining the relationship with the customer. It enables you to measure your ability to foster that relationship and the impact of your strategies and tactics on your organization’s brand equity (your brand’s ability to command preference in the market and generate loyalty).  A good market research program brings the company closer to its customers.

Primary vs. Secondary Research

There are essentially two types of research: primary and secondary. Let’s quickly examine each.

• Secondary research:  Secondary research is the result of data collected for any purpose other than the one at hand. While secondary data saves time, and money, there are two major drawbacks. The first is that there is a gap between the original purpose for which the secondary data was collected and the current problem you may be trying to address. Second, the quality of secondary data may come into question. Who gathered the data? Why was the research originally conducted? What was the methodology? and others may be important in determining the validity of the data.
• Primary research: Primary research is information collected for the first time. The main advantage of doing primary research is that the data collected will answer a specific research question. Gathering primary data can be expensive and there are a variety of primary research methodologies such as various survey techniques, observation research, and experiments.

Both types of research have merit. If you have a question that secondary data cannot answer then primary research is your best option.

Seven Steps to Conducting Research

Undertaking a research study involves seven distinct yet sequential steps:

1. Define the question to be answered
2. Design the research methodology
3. Write the research instrument
4. Draw the sample
5. Complete the study
6. Input and analyze data
7. Present the results

The first two are critical at the outset of any study.  Let’s explore these two further.

1. Define Your Question. The purpose of market research and the research agenda is to answer a business question. The question may have to do with characteristics of a market or customer set, buying criteria, purchasing preferences, etc. The question you want to answer serves as the foundation for your research agenda. The research agenda is a guide to action. It provides direction, clarifies options, and keeps things on track.  

The output of your market research needs to answer the question. This information you need to answer the question can come directly from customers, from the channel, or even from the competition. You want to leverage as many reliable and valid information sources as you can to answer the question at hand.

One of the biggest mistakes companies make when it comes to conducting market research is trying to make one study answer too many questions. Be clear about why you want to do the research and how you are going to use the results.

Keep each study focused and limit a study to answering no more than 3 questions and the results should be actionable. Answers to these questions will help you formulate your research question and agenda:

• Why are you doing the research?
• What do you hope to learn?
• What audiences have the answers?
• What decisions will you make as a result?
• How are you going to apply the results; what are you going to do with the data that policy and program changes do you anticipate making?

Once the question(s) is defined, the next most important decision is the methodology.

2. Select Your Methodology. It is important to select the most effective methodology for the information collection. Quantitative and qualitative approaches can work independently or together for the most comprehensive results. Market research is a continuum, blending various approaches and methodologies: Mail, telephone, intercept, Internet, focus groups, roundtable discussions, one-on-one interviews, central location clinics, event measurement, and many others can all be effective in the right climate and situation.

As you choose a method, weigh several factors:

• Audience size
• Audience importance or status
• Amount of money available for research
• Level of validity sought
• The time frame for completing the survey
• Geographic distribution of the audience
• Survey length
• Survey complexity
• Sensitivity of survey questions

Consider creating a Research Strategy Grid that links the important components of each study to serve as a guide. We recommend the following columns comprise your grid:  

1. Column 1 contains the “big question.”
2. Column 2 defines the target audience.
3. Column 3 indicates the chosen methodology. At this point, some judgment comes into play.

Once you complete these first two steps you will be ready to design the instrument and execute the research.

Minimum Sections of Your Research Report

From our perspective, a quality research report must meet the objectives established in the original proposal.  A quality research report should at least contain these components:

• a clear, concise statement of the research objectives
• an explanation of the research methodology
• a summary of findings and analysis
• the implications of the findings in regard to the question(s)
• key actionable insights that comprise the recommendations and conclusions

Actionable data is the name of the game. What’s the point of research if it can’t be made actionable? 

Make Your Market Research Actionable

Useful actionable research explains patterns and trends. For research to be actionable it must provide at least two things:

1. Explain why things are happening. Sampling error, poor response rates, and poor questionnaire design combine to provide results that may result in no understanding or explanation for why something is occurring. Without an explanation, a company is left to figure out the cause of the results. The results from these kinds of studies are generally taken with a grain of salt.
2. Provide focused results. Usually, the absence of robust processes before and after the research itself is the primary culprit for producing poorly focused results. The telltale sign is a massive “drag-net” questionnaire—that is, a questionnaire or study designed to dredge out any and all information that might be there.

Here are four tips to help ensure your research results are actionable:

1. Stay focused: Focus on what the research is meant to achieve. Good studies avoid catching two butterflies with one net. Senior management and the rest of the team need to be clear about what you want to learn. A strategically coherent questionnaire with fewer questions is less onerous on respondents who have to answer it and tells a much more focused and compelling story to the consumers of the research.
2. Continuity: Consider conducting one to two longitudinal studies where you re-contact the same respondents at intervals. This enables you to see whether the actions you took really produced change. 
3. Time Lags Studies: Consider recruiting a rolling panel for customer satisfaction loyalty studies. A rolling panel allows you to capture and compare answers over time and to measure and validate real changes in experience. This approach allows gives customers the opportunity to provide feedback, rather than being forced to respond to batteries of rating statements, many of which may be irrelevant to them.
4.  Work from a hypothesis: One good process prior to commissioning market research is to “write the report first.” This is a simple pre-survey process that encourages involved managers to imagine (and record) what they think the research is going to say and what they would do to respond to the most likely research outcome scenarios. This will also help avoid hearing “this confirms everything we already knew” when you present the research. If the audience is simply asked to second-guess the results beforehand, then it is very useful to see how the actual results map against what was expected. You will most likely find that the expectations of the group as a whole are wildly disparate and more people were wrong than right. This step also helps side-step the issue of nothing happening once the research is completed because the team has already begun to discuss and agree prior to implementation on how they would respond to the various research findings.

Affordable Customer Research Methods

As you can tell conducting research is an investment both in terms of hard dollars and soft dollars (time and people).  Advisory Boards (CABs and TABs) and Voice of Customer (VoC) are two affordable techniques any company, regardless of size or industry, can use customer research to facilitate their customer-centric journey.  We’d recommend every company consider these two approaches. Why?

1. Advisory boards improve your company’s probability for success by providing affordable access to people to better understand the issues that drive marketing decisions.
2. VoC helps a company positively affect the customer experience, and identify and prioritize customer wants and needs.

Regardless of how you approach your research, the key is to employ an approach that will you gain important customer insights related to: 

• Customer buying criteria and supplier preferences
• Customer buying journey
• Customer experience
• Opportunity development and win/loss analysis

When it comes to research, expertise and experience truly payoff.  Let us know how we can put our research skills to work for you.

FAQ:

• Secondary Research: Uses existing data collected for other purposes; cost-effective but may lack relevance or quality.
• Primary Research: Collects new data tailored to specific questions; more precise but often more expensive and time-consuming.

1. Define clear, focused research questions.
2. Select appropriate methodology (quantitative, qualitative, or mixed).
3. Design research instruments (surveys, interview guides).
4. Draw a representative sample.
5. Conduct the study.
6. Input and analyze data.
7. Present clear, actionable results.

• Focus studies on no more than three key questions to avoid dilution.
• Provide explanations for observed patterns and trends.
• Use longitudinal or rolling panel studies to track changes over time.
• Develop hypotheses and pre-define responses to likely outcomes to facilitate decision-making.

• Buying criteria and supplier preferences
• Customer buying journey and decision process
• Customer experience and satisfaction
• Opportunity development and win/loss analysis

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