Can Market Research Increase Business?
Increased sales for less cost has increasingly become a business mantra. For any business there is nothing more important than knowing precisely why people buy your product or service. In this competitive marketplace research is often the first thing to be cut in an attempt to drive costs down. Yet some forms of research have the power to dramatically increase turnover.
Market research is the systematic gathering and interpretation of knowledge using analytical methods and techniques to gain insight or support decision making. Market Research is really any organized endeavor to gain knowledge about competitors, markets or customers and in the past has been an important element of business strategy.
However, the term is often, and wrongly, interchanged with the practice of Marketing Research or Research for Marketing however, there is an important and distinct difference between the two. Marketing research is the objective gathering and interpretation of knowledge using analytical methods and techniques to gain insight and information about audience purchase habits.
Can you see the distinction? – Market research gathers intelligence on potential markets, marketing research gathers intelligence on why they purchase and who from.
The main purpose of Marketing Research is to understand the buying strategies of the audience. In short it is the science of understanding how and why customers and potential customers respond, or not, to your advertising messages. Marketing Research, when done correctly will tell you exactly how to push the buttons that will compel more people respond to your message or proposition. And it should give you those advantages simply, quickly and cost effectively.
Perhaps that is why, an increasing number of companies are moving away from the ‘soft’ intelligence provided by market research and are moving towards the ‘hard’ knowledge provided by marketing research. In this context, intelligence is commonly defined as ‘hard’ when it provides specific, detailed and quantifiable guidance for future marketing campaigns. The fact that it is measurable and can directly influence bottom line profitability has caused this sort of research to be described as “research for a new business age” by marketing professionals and that “traditional methods may produce findings that are interesting – but who these days has the time and money unless there is a quantifiable purpose and return?”
Whilst some organisations claim to offer bespoke marketing research, in truth, some are simply variations of their usual research offering. These rarely provide intelligence that could be used to direct and evaluate marketing campaigns. Be cautious, if your research company recommend focus groups as part of a marketing research project as that is typically an indication that they have just adapted their usual offering to fit.
The latest marketing research techniques use research methodologies that are adapted from behavioural psychology to gain insights into your audience that are immediately useable, useful and designed to repay your need for improved results.
So which type of research would increase your sales?
If you feel you have an understanding of who your audience are; their demographics, how old they are, how much disposable income they have, their lifestyle, etc, then you probably don’t need to spend money on market research. If however you need your advertising and marketing to increase inquiries and sales then you are more likely to find marketing research more profitable.
Whichever direction you decide to take, ensure that you act upon the information you gather as, in these difficult times, it could make or break your business.
Jim Brackin is Director of Insight at EspConsultancy.co.uk the research for marketing specialists. A free report is available on how market research can dramatically improve profitability.
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