By Damien Edmonds,
Jay Chiat always kept a note in his top pocket. It said, ‘Maybe they’re right.’ He should know – he featured at #10 on Advertising Age’s list of 100 industry people in the 20th century. His agency, Chiat Day, launched Apple’s 1984 campaign. Five, years later TBWA\Chiat\Day dreamed up the Energizer bunny campaign (1989).
After 50,000 years of humans communicating and innovating, we’ve still not evolved to be mind-readers – but effective market research (online and offline) can help you make better decisions regarding the growth of your organisation.
As a concept, market research was first practiced in the United States in the 1920s. It began as an offshoot of the advertising boom of the Golden Age of radio, when advertisers realised the impact of understanding customer demographics. Sponsorship of radio programs, in line with core demographics, helped radio innovate quickly.
Fast-forward 100 years to the present day: we’re now in the Golden Age of digital, with data the new oil. A perfect storm has put global ideas – and terabytes of information – into the hands of everyday people:
- Networking (social media, 2003);
- Changes to the Internet that transformed the Web into a social system (Web 2.0, 2004)
- The mobile revolution (iPhone, 2007).
It’s official – here in Australia:
We’re service-orientated – households now spend $2 on services for every $1 spent on products (Australian Bureau of Statistics). And services are intangible. Knowing when a service fails is much harder, thus we are far less trusting with services.
- Workplace diversity is now also on the rise (compared to 2006):
Diverse teams actually fortify service-orientated organisations by contributing diverse insights. Each person’s respective perceptions and expectations of your service offering will differ. This translates into a wonderful opportunity to better understand varying stakeholder cohorts and customer segments across Australia’s diverse households and communities.
In the Golden Age of Digital, you can never assume you’re completely across how a customer segment thinks.
What is market research?
Just to clarify, the most comprehensive definition of market research comes from London School of Marketing ‘the collection, analysis and communication of information, undertaken to assist with decision-making’ relating to your market. It aims to increase your understanding of your customers, and your competition.
Every research project sets out to prove a different theory.
Effective market research isn’t cheap, because it sweats the small-stuff. It doesn’t presume knowledge about your customer segment, nor your substitutes. Instead, it adds value by using a feedback loop to determine and analyse what customers think.
Topline market research involves:
Secondary research (i.e. research conducted with someone else’s objectives in mind):
- Data and information sourced within your organisation (e.g. sales)
- Market reports from newspaper or industry journals
- Reports from government and industry bodies.
Primary research (i.e. research conducted with your objectives specifically in mind):
- Qualitative – understanding the story
- Quantitative – measuring the story
- Observational – watching people interact within an environment (e.g. mystery shopping).
Consider developing your market research that helps you with decision-making that assesses your organisation’s valuable data, including:
- Descriptive roles – gathering and presenting statements of fact
- Diagnostic roles – clarifying data about or actions of a particular target market
- Predictive roles – to take advantage of opportunities as they arise in an ever-changing marketplace.
WHY is market research important?
Effective market research is important for three reasons:
- Customers today have more choice than any time before in human history – choice with their selection of services and products, as well as media channels.
- Rather than using lag indicators such as how profitable your organisation was last financial year, market research can be used as a forward E.g. Calculating your Net Promoter Score (NPS) satisfaction rating helps to determine whether your customers will continue to recommend you to their friends and colleagues.
- Effective market research can clarify your value, as it leads to better decision making for your organisation. Marketing research (and communications) make your services more tangible, and give prospects something firm to evaluate. It allows you to understand:
- The emotions that motivate your customers’ decisions
- The opinions and engagement levels of your staff, and whether messaging is consistent across your organisation
- How satisfied your customers are and how likely they are to continue using your services
- How to improve customer relationships and engage more deeply with customers, so they become advocates and refer you on.
Increase your use of market research to tap into the thoughts of your staff, competition, clients, consumers, and advocates. Market research will really help you read minds in the Golden Age of Digital.
- Watch out for our next blog, on ‘How market research guides your decision making’.