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By Mitch Glasser, February 7, 2010 2:00 PM

Don’t have the time to research your market?  Let’s see, you’ve taken the time to write a business case, create a marketing plan, do the forecasts, plan the rollout, and you want to use your company’s money to develop a product that will take months to complete, but you don’t have time to see if your market will bite?  This is not how one builds an enduring business.

Sound primary research creates convergence on a common ‘sense of the market’ among management and builds confidence in its implications and indicated actions.  It gives a company greater assurance that its decisions are the right ones, and creates a greater willingness to back them up with the appropriate level of resources.

Investment in primary research can result in a significant ROI, and the size of the return is proportional to how far off you might otherwise be in your product, service or marketing assumptions.  Proper identification of target customers, crisp messages that accurately address customers’ pain or gain with a compelling reason to buy, surrounding your products or services with the proper customer support, and having the right response to competitive offerings can have a huge impact to the bottom line if discovered early in the process.

Primary research should be a line item on every marketing budget right along with collateral, trade shows, public relations, Web development and the like.

So if you don’t ask questions of your market, you won’t know what it needs.  But here’s the rub: If you ask the wrong questions, or don’t word your questions correctly, you still won’t really know.

Just as you would never hand your accounting to someone just because he is a self-proclaimed wiz with Quicken for his home finances, so too should you not entrust the gathering of critical market knowledge to someone not professionally trained in the field.

Poorly constructed questions produce invalid, often misleading information—a condition rarely evident by simply looking at the data.  You run the risk of drawing the wrong conclusions, sending you off in the wrong direction in your product designs, promoted benefits, or a host of other dead ends.  Don’t risk your investment in a professionally developed product or service to market intelligence that is not created likewise.  Given there are dozens of books and articles written about market research, writing questions, constructing questionnaires, etc., this activity shouldn’t be left to someone simply because they have a Zoomerang or SurveyMonkey account.

The key thing to remember is that, eventually, you will get direct input from your market.  It is simply your choice as to when it happens.

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By Mitch Glasser, February 6, 2010 6:00 PM

The use of primary market research is not nearly as wide spread as it should be.  Here’s my take on why that’s bad for business.

You’re spending a significant sum of money starting a new business, developing and launching new products, or introducing a new marketing campaign for an existing service.  What portion of your investment is earmarked for gathering market understanding to direct your efforts? How much will you spend to reduce your risk of failure and maximize the return on your investment?

As a means of determining market potential, most companies engage in some level of information gathering: studying published industry statistics and reports, probing competitive web sites, doing feature-by-feature comparisons, These are all examples of ‘secondary’ data—that is, they involve analysis of already-existing information.  Further, many seek the guidance of industry experts, advisors and consultants. Many businesses use this research as the basis for identifying potential markets, developing market messaging, securing additional investors and setting sales targets.

As useful as these sources can be, often they are only broadly related to the specific marketing and business issues you face.

These sources and individuals, you see, are not YOUR MARKET!

YOUR MARKET is…

the people who potentially will write you a check for what you sell…

and you need to ask them if your offer will be compelling enough to do so.

Because if it isn’t, you don’t have a product… or maybe even a business.

Truly listening to your market means doing primary market research—that is, getting information directly from existing or potential customers or sales channels about their reactions to your product or service.  Doing surveys, holding focus groups or conducting in-depth interviews are some of the tools used for soliciting input from these most fundamental sources of information.

Primary research is a formalized method for objectively listening to your market to determine who your potential customers are, how they make purchasing decisions and the reasons they use the products or services they do.   The key word here is objectively.  This type of information does not come from group-think sessions in which senior management ‘envisions’ what the customers’ collective needs are—they are too closely involved with your current products.  Nor does it come from your sales staff, who are hired to be proponents of and evangelists for your products.  They are trained to influence and convert prospects into buyers, not to listen objectively.

The market research industry is on the order of $10 Billion.  The majority of these sales were to large businesses—those who have long experience with research services and continue to place a high value on them.  Small and medium-sized businesses, which need to be no less successful in their marketing efforts, use primary research to a much lesser extent.  This is often due to lack of experience and understanding of the unique benefits it can deliver.

Beyond the marketing department, research benefits many core business functions:

• Sales—Selling is tough enough without trying to sell the wrong product to the wrong customers or with messaging that “misses-the-boat”.  Creating effective sales tools requires having a clear sense of your customers’ pain and how your offer helps to relieve it.
• Finance—Revenue forecasts tacitly assume you’re selling the right service to the right set of customers.  Assuring that this is the case will reduce your risk of missing your financial targets.
• Operations/Customer Satisfaction—Documenting customer needs for service and support assures better cost control and higher customer satisfaction and retention.
• Senior Management—Success in the market will increase market share, build company valuations, build business credibility and make it easier to raise additional capital to fund growth.

In Part 2 I’ll cover additional reasons why research is an invaluable business tool.

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By Mitch Glasser, February 6, 2010 3:20 PM

Welcome to my blog, Know Your Market.  Although my company’s name is Glasser Research, what really drives me is helping my clients do superior marketing.

Market research is the only input function of the marketing discipline—all else is focused on output.  In order for a company to get the most out of all their outbound activities, it needs to start with an objective, and often a ruthlessly objective understanding of its target customers.  This type of information does not come from group-think sessions in which company management ‘envisions’ what the customers’ collective needs are—they are too closely involved with their current products to do so.  Nor does it come from the sales staff who are hired to be proponents of and evangelists for products and services.  They are trained to influence and convert prospects into buyers, not to listen objectively.

That’s where market research comes in.

In my years of doing research I have seen and heard of numerous occasions where clients have gotten research-based input which completely changed what they thought were spot-on plans for a new service  or ‘improvements’ to an existing one.  These episodes continue to reinforce the need to test the assumptions underpinning a product to make sure what is introduced into the market has a compelling, profitable story to offer.

Doing superior marketing, then, requires having plans and strategies based on sound market knowledge.  To think otherwise is fraught with risk.

In subsequent posts I hope to provide content and examples which illustrate the value of a research-based approach to marketing (and the risks of not having one).  Being market-driven is no longer an option.  It is crucial to a firm’s long-term survival in today’s competitive markets.

Thanks.  See you next time.