It is often difficult to establish a clear link between marketing research results and business outcomes, which frequently leads organizations to allocate smaller budget and staff to the market research function (if any) or just get rid of it. Among the reasons why this happens, we often find:

• Unclear research objectives.
• Misalignment of research objectives and business goals.
• Lack of a track system to monitor how investments in market research correlate with business results.
• Management’s little exposure to market research and lack of experience with how to use it.
• Poor execution of business and marketing strategies, despite accurate insights.
• Changes in the market driven by competitors’ actions that invalidate research results.

In order to understand market research’s ROI and connect it to the business impact it ought to have, we should:

• Establish a formal process that forces end-users of market research to think through what they want to achieve with the research. Steps in this process should include:
  

1. Ask the end-user to narrow down the scope of the study by filling out a form with questions such as:
   • What business problem triggered the need for the research?
   • How will the research impact the overall business strategies for customer acquisition and retention? What is the priority?
   • What decisions will be made based on the research?
   • What hypotheses, if any, need to be tested?
   • What type of information is expected to be gathered through the research?
   • What recommendations for action are expected?
2. Discuss with the research end-users how certain methodological issues such as sample source, sample size and analytical approach will impact the research outcome.
3. Get the end-user involved in the design of the data collection instrument (surveys, focus groups/IDI discussion guide, secondary data source, etc.) that will be used to answer these questions.
4. Lay out how the final report would look like, how the information will be presented and, once the data is in, provide a draft of the report to the end-user for review before final publication.

Although this step is designed for discussing specific research requests, the first point can also be used to identify the market research needs of different groups within an organization in order to craft an overall marketing research plan the organization should follow. This would help with project prioritization and resources allocation. Of course, the marketing research plan should be communicated to key stakeholders within the different groups in the organization, so they take ownership in the process and are open to use market research to advance the business.

• Create a distribution system to disseminate the research results. This could include:

1. An electronic library of research reports where users can find current and past research (which would avoid duplication of efforts).
2. Mini-workshops with key stakeholders of the research to discuss the research results and how they could be implemented.
3. A newsletter providing distilled insights and a summary of research available with links to reports. Use the newsletter to also give visibility to the groups that have commissioned research, which elevates the status of market research within the organization

• Establish a feedback system to monitor how the research results are being used and what impact they have on the business. This system could include:

1. Follow-up surveys, in-person or phone interviews with key stakeholders to track the decisions made based on the research.
2. Track the amount of money spent on research and compare it with the business outcomes (sales, savings, retention, etc.) based on decisions guided by the research.
3. Track key performance metrics using internal data (sales, operations, customer service, etc.) and analyze how they correlate with results from the research.

Connecting marketing research to business results is not easy, but it can done with the help of a systematic approach is adopted in order to get key stakeholders involved in the research process, share research insights and track their impact on the business.

To request consumer shopping behavior data and insights don’t hesitate to contact us.

by Michaela Mora

as published on April 30, 2010 by the Dallas Business Journal

Bad economic news has been a daily event for the last 24 months. We have heard about thousands of companies filing for bankruptcy and millions of people losing their jobs. Last year, most companies slashed marketing expenses and reduced market research budgets to almost nothing. It’s survival time, but I would argue many companies are going about it all wrong. Now, more than ever, market research can help companies to invest wisely the few resources they have. Ideally, this is the time to get creative and find cost-effective ways to conduct market research.

So, how can you do good market research on a small budget? Here are points to consider:

• CONTROL FOR RESEARCH SCOPE. Look long and hard at the business issues at hand and separate “nice-to-know” from “need-to-know” information. Focus on the most critical issues to reduce survey length and time needed for data processing and data analysis.

• REDUCE SAMPLE SIZE. Sample size requirements should be carefully considered, taking into account the impact on estimate accuracy. As samples get larger, estimate accuracy and sample costs increase, but there is a point where the gains in estimate accuracy don’t justify the increased cost. Recently, I had a client who wanted to conduct an online survey with a sample of 1,000 respondents, which would give a statistical accuracy of +/-3.1%, but it would cost $8,000. On the other hand, a sample of 400 respondents would give a statistical accuracy of +/-4.9% and cost $3,400. As you can see, a 135% increase in sample cost would only yield a 60% gain in statistical accuracy. The client opted for the smaller sample.

• USE CUSTOMER DATABASES. Customers’ feedback often provides invaluable insights given the relationship they already have with a company. What’s more, a customer database is the cheapest source of sample for research purposes, since it is already in-house. However, be aware of its potential limitations given the profile of your customers and the type of data you have gathered about them. Know how the database was sourced. For example, if most of your customers are small businesses or females younger than age 25 and you are interested in understanding how your products will perform in other market segments, then your customer database is not the right sample source for a market segmentation study.

• USE ONLINE DATA COLLECTION TOOLS. In the past few years an explosion of online survey tools has reduced the cost of data collection significantly and shortened the research process time line. However, there are a couple of caveats:

 Market research is the field in which the principle of “garbage in, garbage out” has the most application. Programming and deploying online surveys is easier and cheaper than ever, however the online tools that facilitate this don’t provide the content of the actual survey. You still need expertise in questionnaire design, research methodology, sampling and data analysis to be able to extract useful insights from the survey data.

Online surveys are not always the most appropriate methodology for the research objectives and target sample. For example, consumers in lower income brackets are less likely to have Internet access, therefore they would be underrepresented in an online-only sample. In this case, it would be more appropriate to reach them by phone or in person.

• HIRE SMALL MARKET RESEARCH AGENCIES. There are many small market research agencies with big agency capabilities and experienced market researchers, but low overhead cost. They are often very responsive and flexible and can do the job with the same — and sometimes better — quality than bigger research firms for a fraction of what larger firms would charge.

Market research doesn’t have to be expensive to be well done. Consider these points and find a research partner that is willing to invest in your success. This will allow you to do market research on the smallest budgets.

To learn more about our consumer data service visit Consumer Shopping Behavior Insights. To request consumer shopping behavior data and insights don’t hesitate to contact us.