Market Research Strategies: Getting to Your Company to The Next Level
Quite often these days, especially evident in mid-market businesses, I come across CEOs, who have been very successful at building their company’s revenues but are now are challenged with reaching the next level. Sales may have slowed down; the low hanging fruit picked; or competitors are upping their game. They may also have been successful in using their technology and expertise in one market, but totally misread another. Whatever the issues are; in order to flourish, every company should consider integrating market research strategies into their growth plan to keep a pulse on their market and its dynamics and to capitalize on market opportunities.
Growing through market research strategies can include new products and services, new pricing plans, new positioning, new market segments, changes in business models, or new channels of distribution. Each of these should be evaluated, researched and integrated into your growth strategy and ultimately into your business, product development, and tactical go-to-market plans.
Use Market Research Strategies to Avoid Costly Mistakes
When used properly, a market research strategy will help you avoid costly mistakes. For example, a M2M (machine-to-machine) wireless communications client of mine had spent over two and a half years and over $2 million in engineering to develop a “smart” intelligent wireless solution for the commercial lighting market. After launching and experiencing dismal annual sales, they were considering exiting the market. The market research I conducted uncovered well over a half dozen sub-segments within the commercial lighting market, each with their own complex value chain of decision makers, key influencers, market/product requirements, acceptable pricing range, and distributors.
The solution they originally developed did not meet any one segment needs. However, a portion of their system met the needs of a very large and low penetrated, “low tech, non-intelligent” segment which was being fueled simply by the rush for energy savings and simple ROI for end purchasers, while other “intelligent” segments involving more complex “smart “ solutions required additional components, features, communication protocols, and enhanced cloud-based solutions the company had not yet developed or met fully as required for the market. Importantly, the market research served the basis for a two-prong turnaround strategy; a short-term growth strategy to attack the “low tech, non-intelligent” segment to drive them to a $7 million business within two years; and a longer-term, “smart” cloud-based strategy to attack the “intelligent” segment to drive to a $20 million business within four years.
Cost, Benefit and Risk Balance
A successful market research strategy consists of a variety of qualitative and quantitative techniques ranging from market segmentation and share analysis, secondary market data analysis, one-on-one interviews, product concept development, customer surveys, focus groups, and online surveys. Good market research design, architecture, and methodology is critical and must be balanced against cost, risk, return and time.
For example, if your company can develop a product internally very cheaply, test it inexpensively in your existing distribution channel at both an acceptable low cost and low risk, by all means do it - you are in effect, conducting your own in-house inexpensive market research. However, if the development time requires significant engineering, sales, marketing and or operations investment, strong market research strategies will assist you greatly in avoiding costly mistakes. Lastly, when used properly, market research should be utilized to drive your company’s growth strategy.