It’s not uncommon to hear pushback from some business leaders about investing in market research studies.
Comments like "It will take too long," "We don't have the budget for that right now," or "I'm still going to do what I think is best" are common.
A skeptic told me recently that what we do is like "reading tea leaves."
My response? Market research is meant to complement your knowledge and experience—not replace them. Think of it as an additional tool to enhance your decision-making, not undermine it.
The reality is that companies invest millions into developing products and services. So why not spend a fraction of that, conduct market research, and gain invaluable insights to mitigate risks, stay ahead of the competition, and ultimately build offerings people really want?
Getting customer-centric
There is no denying that every business would love a clear view into their customers' minds. Imagine knowing what your target customer actually values, what frustrates them, and how they make decisions. You can't assume you know the answers.
Advanced quantitative techniques like MaxDiff and Conjoint Analysis can help businesses uncover customer preferences and priorities. These survey methods force consumers to make trade-offs between different product features, positioning statements, pricing levels, and more.
This lets us reliably identify what consumers truly value rather than allowing customers to tell us everything is important.
Data collected from MaxDiff and Conjoint experiments can also be leveraged for clustering analysis, allowing businesses to segment the market into distinct groups with their own unique drivers. This opens up possibilities for targeted messaging, experiences, and even different product SKU offerings.
Businesses can choose their ideal target segment based on their population size, buying potential, and affinity for your brand.
Managing risk and spotting opportunities
One main benefit of market research is risk mitigation. Market research is your safety net against expensive mistakes. Without it, you're essentially flying blind. Think about the cost of launching a product that misses the mark or rolling out a service nobody wants.
These missteps can drain your resources and damage your brand. Market research helps you test ideas before you fully commit. It lets you identify potential issues early when changes are still cheap and easy to make. A modest upfront investment can help businesses identify potential pitfalls or hazards before they occur, potentially saving thousands or even millions down the road.
This proactive approach can save you millions in the long run. By investing in research upfront, you're actually protecting your bottom line and setting yourself up for stronger, more sustainable success.
Fueling innovation and growth
Market research also illuminates opportunities others may be missing.
It reveals unmet needs and unexplored market gaps, sparking new product ideas and service improvements. Companies can shape markets rather than simply react to them. Solid research allows businesses to confidently pursue growth opportunities rooted in real customer demand.
If everyone takes a conventional approach, there may be an opening to zag where others zig.
This proactive approach keeps organizations dynamic and forward-thinking. It transforms data into actionable strategies, paving the way for sustainable growth and innovation. Investing in market research ensures continued relevance and competitiveness, setting the stage for long-term success.
Data-driven decisions
Think about all the types of data that likely inform decisions at your company:
Financial performance metrics like revenues, profits, COGS
Supply and distribution data like inventory levels, throughput, delivery times
People data on employee retention and engagement survey results
Customer data from market research should be just as important, especially for major strategic decisions around product roadmaps, growth priorities, marketing spending, and more.
Market research isn't just about understanding your customers – it's about making better business decisions across the board. It informs your pricing strategy, helping you find the sweet spot that maximizes both sales and profits. And it helps you stay ahead of market trends so you're not caught off guard by shifts in consumer behavior or new competitors.
Market research reduces guesswork and increases confidence in strategic choices. It's an invaluable tool for executives looking to minimize risks and maximize returns.
Delivering real results is why market research is important
The most significant benefit of market research may be deeply understanding your audience and building an organizational mindset of insatiable curiosity about their needs.
Market research enables companies to continually develop relevant, differentiated offerings that drive sustained growth rather than operating based on internal assumptions alone. It's not just about making better decisions today - it's about staying in tune with your audience and finding new ways to lead the market.
So, while it may require an investment, market research provides immense value that pays dividends over the long run. It allows companies to avoid costly mistakes, capitalize on hidden opportunities, and ultimately make better, smarter, audience-led decisions.
Start small with market research if you're new to it. As you see the value it provides, you can increasingly make it part of your decision-making process.
Is that really just reading tea leaves? We don’t think so.