Mustard Director, Richard Walker, challenges the perception that market research and customer insight is for ‘big business only’.
The business climate has changed significantly over the last 10 to 15 years. Consumers now demand much more from brands if they are to buy their products or engage with their services. With businesses often left wondering what they can do to succeed in this new era, the need for brands to forge stronger relationships with their customers is more relevant than ever before.
However, there is sometimes a misconception in the SME community that market research might not be relevant or a cost effective option for their business. Here, Richard Walker, Director at Mustard, debunks a few of the most prevalent myths surrounding the value of market research for small businesses and explains how customer insight can help to make and save money.
MYTH: Market research is a luxury smaller companies can’t afford.
It’s no secret that the current economic climate has increased pressure on businesses to tighten their belts. However, what is often forgotten is that, just as difficult market conditions have forced businesses to cut-back, they have also made the marketplace a much less forgiving place than ever before. As pressure increases, SMEs cannot afford to make mistakes when it comes to identifying and engaging with their audiences.
It’s important to know what your customers want, what they believe, what their needs are and, crucially, how your business can assist them in meeting those needs. Market research will pay dividends in this regard, because insights can be used to direct business strategy in such a way that resources are not wasted on low potential activities – saving both time and money.
Online techniques mean that the costs associated with testing products and services in new markets – in the UK, Europe or further afield – is a fraction of what it used to be, when surveying was done face-to-face or by telephone. And it’s not just surveys that are moving online; an increasing amount of qualitative research is now conducted over the internet, through online focus groups, social media and online communities.
MYTH: Market research is only useful for big brands.
Why market research should be considered less relevant for start-ups and smaller companies is a bit of a mystery. It is impossible to launch a successful business or produce a product without first identifying what opportunities exist in the marketplace.
Because SMEs are likely to face a lot of competition from bigger brands or more established businesses, it’s essential that they are able to differentiate themselves from their competitors. Managers at every stage of a business’ development must be aware of how market trends are likely to affect their company, how their target market makes buying decisions, how they can increase their share of the market, and what marketing strategies will work best.
MYTH: Market research is mainly used to assess the viability of short-term projects or product launches.
Market research is often used by SME owners and managers looking to gauge the potential consumer reaction to a new product or service. This being said, it’s most effective when conducted on a long-term basis. The key strength of an ongoing market research campaign is that it can help businesses stay aligned with the constantly shifting needs of the consumer, instead of being used as a means of responding to underperformance.
What we call ‘environmental scanning’ extends the scope of market research to cover all aspects of the business environment, audience analysis, in-market performance testing and so on. The value of this kind of research data is that it gives businesses a measure of often hard-to-quantify success indicators – things like trust, brand alignment and consumer buy-in.
MYTH: All market research can be done in-house
While some companies do choose to conduct market research in-house, it’s worth consulting with a specialist research agency if you are looking to get the best value out of your data. Qualified researchers have the advantage of being completely independent and objective – an important point when you consider how easy it is to inadvertently skew research results, for example by asking leading questions or selecting an unrepresentative sample.
Ensuring your research results are accurate is not the only concern. You also need to remember that, even flawless data is only useful if it can be correctly analysed and interpreted. Experienced researchers will be able to accurately benchmark your business, internally or against its competitors, allowing you to maintain and develop best practices. Their experience will also be crucial in determining what questions your research results should be answering, how to get the information you need and, most importantly, how your business can use that information to better inform its strategy moving forward.
Put simply, market research should be viewed as one of a number of great tools for helping your business maximise opportunities. Though not designed to replace the instincts of the entrepreneur at the helm of an SME operation, it can complement them. One of the great strengths of market research is that it can be used to inform business strategy and better equip managers to respond positively to changes in consumer behaviour.
For this reason, entrepreneurs and SME owners are often reassured to have expert research data available to help support and guide them in key decision making. When all is said and done, I’d say market research is about as close to an insurance policy as you can get in this day and age – and surely anything that reduces the risk of doing business is worth consideration!
For more information on how research can be used to help start-up businesses, please contact Colin Auton or Richard Walker on +44 (0)1625 628000