Market research is an essential tool for businesses of all sizes, from start-up to Fortune 500. It provides critical landscape information about a market or industry so that companies can develop their road maps with the best available intelligence about trends, opportunities and pitfalls. The good news is that there is an enormous amount of published data available on almost any market a person might care to know about. The bad news is that it is easy to succumb to the “more is more” mentality, and spend precious time and budget dollars on information that doesn’t get you closer to your goals. So how can you choose the best market research for your business needs and be sure to get the most out of the reports that you do purchase?
Here are five common market research mistakes that you can avoid:
- Not having defined questions before you start. The biggest mistake that you can make when approaching market research is not having a clear idea of what you are hoping to learn! Paying for a research report and pouring over it looking for some big insight is the modern equivalent of reading tea leaves. You may see some interesting trends, but you most likely won’t know whether they’re telling you to go big, or go home. Before purchasing or conducting any market research, you need to gather information from all the intended users in your organization and determine the specific questions you are looking to answer. “What are our customers currently using or doing?” “How much would our customers be willing to spend on services?” Committing to answering these questions will keep you from spending money on research that doesn’t give you what your business really needs, forcing you to either spend more later, or go without that critical intelligence.
- Making assumptions based on the wrong group. The wrong data can be worse than no data at all. It is critical that any assumptions made from market research are actually applicable to your customer demographic or industry. Many major business blunders have been made by assuming that consumers will react the same between countries, continents and cultures. If your needs are specific, and not traditionally or frequently covered in published research reports, reach out to a trusted market research firm to ask if they can create a customized research report for your business and budget.
- Not researching your competition. All businesses have competitors, and understanding the nature of their competition is key to winning (or at least putting points on the board.) You can have a fantastic service or product, but if your customers are already buying something comparable in function from a company with a great brand message and an iron-clad loyalty program, you’ll have an uphill battle the whole way. Understanding how your competitors are attracting and retaining customers can help you develop strategies to take existing market share or even prevent your company from throwing money and time into fully saturated markets that will bear little return.
- Disregarding data that doesn’t match your expectations. Sometimes, we don’t get the answers that we hope to see in market research. We might have everything planned out to the nth degree: our business model, our location(s), even our logo colors. Everything is perfect… well, everything except for the customers. If the market research shows that your customers are not who you thought, or not where you thought they’d be, don’t throw out the data, and don’t abandon hope! Negative responses and disappointing trends can be tremendously valuable, as they show us where the weaknesses are and illuminate where they aren’t. Growth in a market or industry can often be attributed to the convergence and interaction of multiple factors and trends, which can make it difficult to make predictions about the future if one of those variables slips. It’s when fault lines start to show up that gives us a much better idea of where the ground is solid.
- Not playing devil’s advocate. Other times, market data can appear to tell us exactly what we want to hear, and line up neatly to what we might have predicted. Hooray! We’re geniuses, right? Well, hold off on the celebration for a minute and take a closer look. Data that appears to back up our expectations is the most easily misinterpreted. As we take in new information, our brilliant minds are working very quickly and quietly behind the scenes to fit that information into our existing framework of beliefs about the way the world works and what people like, want or need. In order to see past your own blinders, you will need to make it a priority to view the data objectively. Put on your devil’s advocate hat or enlist colleagues or other departments to provide their own independent analysis. Ask how the data can be interpreted to disprove your model. By actively searching for any areas of concern in what otherwise looks to be a rosy picture, you will have a better shot at shoring up any lurking weaknesses in your business strategy, and you may even uncover a previously unseen opportunity.
Navigating the landscape of a market or industry is a continuous journey for every business, and quality market research can provide key insights to creating successful road maps. However, even the broadest and most in-depth market research can be squandered if it is not deliberately selected and thoughtfully interpreted. Objective analysis and a willingness to see both positive and negative signs will ensure that you are getting the most out of your market research.