Can your business afford market research?
You will be relieved to hear that this post will not include that old cliché: “You can’t afford to NOT do market research!” Though, as you’ll see, it’s true.
So, can you afford market research? Let the following questions guide you:
How effective are your decisions without doing any research?
You get blips of insights about your customers all the time; from salespeople, customer service reps, social media, conferences, experts, and just the everyday grind of serving buyers.
These insights are helpful, but they’re not research.
If you treat research as just “active listening” instead of being purpose-driven, you will hear just about anything from just about anyone.
It’s like the difference between fishing with a net or fishing with a spear. The net drags up anything in your path – some fish you want, mostly fish you don’t want, lots of plastic bags and water bottles. When you’re actually net fishing it’s easy to know what to keep and what to toss. But when you’re a business it’s much harder to distinguish the signal from the noise.
In contrast, when you fish with a spear you catch only the fish you want. No waste. No confusion. No trash.
Good research is the spear. It’s targeted. You get a custom answer to your custom question. Hearsay and eavesdropping just can’t do the job because the feedback you hear can’t always line up with your most important questions.
What are the consequences of bad decisions?
Even without research, the decisions you make for branding, messaging, pricing, feature priorities, and other critical elements of your business may work somewhat. But you must accept that they will also be informed by large doses of bias, untrustworthy information, anecdotal data, and false perceptions.
When you are about to spend heavily on product development, go-to-market campaigns, advertising, SEO, customer support and fulfillment, it’s a gamble to begin with no research.
With enough cracks in your strategy’s foundation, your launch, your products, your brand or even your businesses can crumble once they make contact with the market. Bad decisions at best carry opportunity costs, and at worst lead to losses that jeopardize the entire company.
How much more effective could your decisions be with research?
Every product and case is different, but with well-executed surveys, you can expect to see an increase in the accuracy and predictiveness of your data. Accurate data leads to better decisions.
The most effective research methods employ statistical analysis models that give you clear instructions on what to do. While the phrase “statistical analysis models” sounds scary, fortunately a Ph.D. in statistics is no longer necessary to put these models to work.
Qualtrics has created a simple decision-accuracy calculator to help you estimate how much revenue can increase when you use research to improve your decisions on a project.
The calculations are simple, but the idea is powerful: Even small improvements to your decisions dramatically boost your sales and easily pay back the cost of your research.
So, can your business afford market research? That depends. Can your business afford to launch the wrong product with the wrong features and the wrong messaging? If not, research is the smart path. To learn how market research can improve business impact download our ebook.
5 practices to improve the business impact of research