Marketing research ideally informs your marketing mix decisions, leading to more appealing products, buyer-centric promotions, profitable pricing outcomes and channels that support strategies. But marketing research should not be undertaken when the answer to this basic business calculation is no:
Does Risk Outweigh Cost?
Does the risk of spending large amounts of money in ways that may or may not maximize profits exceed the cost of spending small amounts of money to conduct research to reduce that risk?
In my experience, however, a successful marketing research project costs a small fraction of the resulting, improved marketing tactic. Brand positioning research costs pale in comparison to the media buys used to communicate the message tested. New product testing leads to large pay-offs in resulting increased sales. Packaging focus group recommendations turn into smarter, more appealing retail purchasing outcomes.
But there are smart reasons not to conduct marketing research. In addition to the basic ROI question above, three signs research should wait are:
1. You can’t afford to do truly professional research.
Professional research might be done in-house or with a vendor.
- Poorly done research may be worse than none at all if it leads you toward incorrect assumptions.
- You may be forced to take large shortcuts, for example using tiny samples for quantitative research or an inexperienced moderator for qualitative, detracting from best practices and results.
- Price is always a factor in deciding on scope and methodology; a marketing research consultant can help you find the best fit between goals and budget, in addition to planning and conducting the actual research.
2. Decision makers won’t use the results.
You know the culture and politics of your organization, and if there is, honestly, little chance it will be used, it isn’t worth the money.
- Marketing research is only valuable if it guides action. Research that sits on the shelf means negative ROI.
- Executives may need to be educated on the best ways to view, understand and use recommendations. Some value the process and internalize the results best by being directly involved, like sitting in on in-home ethnographic interviews. Others prefer to wait for the executive summary: a five-minute video or bullet points. A one-hour conversational presentation on recommendations may be the best approach for many.
- Bringing in a neutral, knowledgeable voice can change the way decisions are made. But I often reassure clients that while good marketing research informs, it doesn’t replace their own business intuition.
3. Secondary research is enough.
Before you invest in primary research, you should figure out what already exists.
- You’ll want to inspect the methodology or sources used by the authors to make sure the research really applies to your case and that you can depend on their findings.
- Timeliness is important as well.
- There are excellent government resources: US Census, especially the America FactFinder and State & County Quick Facts are free places to start, as is this guide to using the US Census.
- Business articles from the New York Times, Forbes, Wall Street Journal and other periodicals are available online or through library databases and are usually free or very low cost.
- Syndicated services like scanner data, purchase panels or industry surveys allow you to pool your resources with others who use, and so are helping to pay for, the same data you need. Just be sure to get as much detail as you can prior to purchasing. And keep in mind that unlike professional primary research, you will have little to no control over the methodology, research process or, sometimes, the analysis of the data.
- You may have information in-house that can be analyzed to understand more.
Marketing research can be invaluable to help you make the best possible marketing decisions. Before you start the research planning process, make sure you are have the necessary budget, are prepared to use the findings once you have them, and exhaust appropriate secondary sources.
Photo by Flickr User: (mateoutah)
Consultant Jennifer Cooper heads BuyerSynthesis, the buywhys™ marketing research company. BuyerSynthesis helps clients clarify their goals, plan methodologies and use research recommendations to drive success. Contact: firstname.lastname@example.org.