Your boss might think there are better things to invest in than market research. Things like advertising, social media specialists, e-mail campaigns, and such. Basically, any action with instant and clearly visible results.
Is that really the best approach, though?
Sure, it might seem like the data that research provides is just a bunch of numbers on an excel sheet that is left in that one forgotten file. But that doesn’t really sound right, does it? You might even recall that one time you overheard that Coca-Cola, which has arguably one of the most successful marketing campaigns, stays on top of the trends by uncovering the wants and needs of its customers through market research, year after year.
Maybe even that time Apple thought their customer’s opinions and feedback so important, they built their own in-house research panel, Apple Customer Pulse. Or when LEGO wasn’t sure how to appeal to girls more, so they conducted a survey to find out what kind of toys and builds girls prefer, making customized products and broadening their audience.
So, really, the question isn’t IF market research needs to be a part of your marketing budget, the question is how to explain to your boss that it DOES. Without further ado, here are a few easy-to-understand arguments!
The success of a marketing strategy depends on getting opinions that matter
Let’s say you are planning a marketing campaign for your new product. You hire a copywriter, you make the visuals pretty, you ask your colleagues what they think and your friends and family how they like it before finally running it.
And it’s a flop. Not only that, but people online made a meme out of it, and not in a good way. (Sometimes, saying that even bad marketing is successful marketing is just something we say to make ourselves feel better.)
Why did this happen? Probably because your colleagues, friends, and family are not your customers. At least not the kind that needs your product to solve their problems. They are more likely to give you positive feedback because they like you or you pay them, regardless of how they feel about the design or the new slogan.
When asking for opinions, you have to hunt the opinions that matter.
For example, your slogan is going to be more successful if it’s based on associations your customers have with your product. Your marketing campaign will catch more attention if you base it on current trends, needs, and wishes of the customers in your industry. Your designers, copywriters, and the rest of the team will be able to work their magic better if they have some guidelines from potential or existing customers.
In the end, doing market research before running a marketing campaign can not only save you money but make you some as well!
It’s a consumer’s market: recognizing the needs of your customers will boost your marketing and sales
Consumer preference is something that’s been rooted in the economic system since the beginning. It’s really no surprise, considering consumers are what make up the demand part of the equation.
Therefore, you simply need to know their preferences. Especially today, when most consumer products are not scarce, but abundant, and the success of your brand depends on whether or not the consumer will choose your product over everyone else’s. Your marketing strategy is the most promising tool you have to show consumers why they should choose your brand.
But how do you even stay on top of all the trends and preferences that seem to change with every season? Well, market research might have some answers for you. And the first one is agility.
Market research solutions that are here to help your marketing teams:
1. Agile research
Agile research is a great way of keeping track of the trends and preferences of your customers. Why? Because it lets you run numerous smaller surveys throughout the year, which keeps your data up-to-date, rich, and insightful.
Instead of running one big research a year with all the questions you can think of that don’t necessarily make sense as a whole and take too much time and effort from the side of your (potential) customers, you can break it into smaller parts.
Let’s say you have a whole new cereal brand you are trying to position on the market. Your product is 100% plant-based, without added sugars, and is in general healthier than most of the competition. Your target group is vegans, vegetarians, fitness lovers, and anyone who puts a bit more effort into eating healthy.
Selling really shouldn’t be hard when you have something these people use anyway, right? Well, not always.
Your brand is not the only one on the market offering breakfast alternatives. The question is: how to pull their attention toward your product when choices are almost unlimited? Being good at marketing is being able to capture the attention of consumers. And you can capture their attention only by understanding their needs and hearing their thoughts.
Agile research allows you to run smaller research in crucial moments. For instance, when some product does really well or really bad, you can run a short survey to find out what associations consumers have with that product, their reasons behind (not) liking it, etc. and you can use those insights to make your own strategy better.
You can also track your brand success by running short surveys a few times a year, to catch all the relevant feedback and address/fix issues before you lose your customers to the competition. This is actually very important because studies show that the probability of selling to an existing customer is between 60% and 70%. Whereas, the probability of selling to a new customer is only between 5% to 20%.
No matter what kind of topic your research is on, agile research makes catching trends easy and any change in needs and preferences is easily noticeable. If you know how to use insights from data, your brand is guaranteed to stay relevant and visible and the consumers will also appreciate the effort put into addressing their issues and will recognize your brand as friendly and trustworthy.
2. Concept testing
Your customers are your best feedback givers. Not your boss, not your colleagues, not your friends. Whenever in doubt, you can always count on them to help you make the right decision.
Let’s say your design team gave you two different solutions for packaging and they fit your brand image equally well. The only way to know which solution will be more successful is to ask your customers which one they prefer. Because, in the end, you are creating the solution for them. Not for your boss, but for your customers.
This approach works really well when there’s an emotional component involved, which can happen during rebranding, especially if your customers got used to the old design and already associate some memories with it. It becomes really important to get their opinions and thoughts because if they don’t like the new design, they might stop using the product.
There are really no excuses to avoid testing your solutions with how fast (3 days!) and easy (just send the visuals of your solutions to the Peekator team) it became in the past few years. And you can sleep easily knowing that your decision is supported by your customers, and the chance of messing it up is brought to a minimum which is if we are being honest, priceless.
Market research takes up a bigger % of budgets year after year
There has been a general rise in the amount of money that goes into market research, but what’s more interesting is how year after year, the percentage of the money that goes into market research is rising in comparison to the amount of money that goes into advertising.
For instance, in 2019., companies in the UK spent $1.56mil on market research and $17.52mil on advertising, which makes a ratio of 20:80. So basically, companies put about 20% of the advertising budget into market research.
In 2020. that number grew to 31%, which marks a year-to-year growth of 11%!
Besides the UK, some of the countries that have the biggest market research budgets are Nigeria (32%), India (31%), Lithuania (23%), the USA, and Romania (22%). It’s interesting to note that both the UK and USA, which make it into the top five biggest economies in the world, are also in the top five countries by the size of the market research budget. Sadly, the rest of the world isn’t even close to this number (yet). Only 18 out of 95 surveyed countries put more than 10% of the advertising budget into market research.
That is less than ideal since market research gives insight into targeted groups, current trends and offers valuable data that helps advertising teams make relatable content for their customers. The world started recognizing this, which is why we see the growth trend in the size of the market research budget! Will you?