When market research fails to produce actionable results, it’s usually for one of three reasons:

1. The objectives of the research are not well defined.
2. The wrong methodology is used to gather data.
3. The research is designed with only the present in mind rather than to gather information for the purpose of planning or execution.

Therefore, when companies seek measurable results and actionable information from their research, it’s essential to avoid these common mistakes.

Defining Objectives and Designing Questions

Actionable research is designed to produce answers that assist decision-making in a wide range of areas, including change management, growth, customer loyalty, selecting advertising media, assessing the potential of a new venture, identifying trends, branding, process improvement, and product development (working in concert with the engineering and sales departments). If its goals are not defined and understood by all parties involved, the research may target the wrong sample, lead to the wrong answers or fail to be useful. The basic question to ask is, “What is to be accomplished with the research?”

With the objective(s) clearly identified, the next critical step is to develop the right questions that will produce actionable results and meet the objective(s). A company that is contemplating a new product, for example, may seek answers to the following questions:

Who are the potential customers (demographics, income, marital status, employment, age, etc.)?

• What are their needs and motivations for purchase?
• Who makes the purchasing decision?
• What features and options do they expect?
• What quality is expected?
• How much are customers willing to pay?
• Will customers want several versions with different features in different price ranges?
• How will they learn about the offering?
• How often will they purchase it and when?
  

The most actionable insights come from open-ended questions that give subjects an opportunity to express opinions regarding what other products they could use, suggested improvements, and first impressions of the company.

When designing questions, don’t rely solely on executives or marketing personnel. Instead, include employees across the organization, particularly people in customer contact roles. In business-to-business research, seek input from customers as well. A company that has a list of former clients, for example, can query them to discover their reasons for defection and then target those same issues when surveying current clientele.

Choice of Tools

The choice of tools depends on the research objective. When looking for statistically reliable data on a large population, use quantitative research. Alternatively, when seeking finely detailed information on opinions and motivations, qualitative research is better. As is the case in many other areas of business, one size does not fit all when it comes to selection of research methodologies. Often, a combination of tools produces the least biased and most actionable results. Face-to-face “intercepts”, for example, complement anonymous Internet research, and small focus groups can be balanced with questionnaires to a large sampling. When selecting tools and methodologies, consider the following:

• Focus groups. Qualitative research in the form of focus groups is particularly useful when introducing new offerings, when positioning, branding or promoting products, and when assessing opinions on a proposed change. Since focus groups are expensive and can only survey a small population, it is particularly important to have a clearly identified objective and to use highly focused questions.

• Surveys and interviews. A recent analysis by Fred Reichheld, a Bain & Co. consultant and author of Loyalty Rules, found that even a 5% increase in customer retention rates results in a 25-95% increase in profits, depending on the business. Customer surveys and interviews are not only a cost-effective means of learning what matters to customers, they also contribute to retention because they let customers know that their opinions matter. This type of research can take the form of mailed surveys, phone or face-to-face interviews. Email questionnaires have the potential to reach a large audience on a limited budget, but must be administered very carefully to avoid ethical issues and to reach serious respondents. For business-tobusiness purposes, scheduled phone interviews produce the most actionable results.

• Competitive analysis. Although market research can provide valuable information about competitors, competitive analysis focuses on this aspect of the marketplace by answering questions about primary competitors’ markets, revenues, percentage of market share, range of products and services, strategies, pricing structures and profitability. Information required to profile competitors is readily available in the library or on the Internet from sources such as Dow Jones Interactive, S&P’s Industry Surveys, Hoover’s Online, Lexis/ Nexus and FISonline. Other sources include industry associations, the U.S. Census Bureau, government agencies, business schools, trade publications and competitors’ websites.

• New business research. Market research is indispensable in determining the viability of a new business concept. Tools in this effort are those listed above under competitive research as well as small business development centers, SCORE (Service Corps of Retired Executives), chambers of commerce, FirstGov.gov and Entrepreneur’s FormNet. While large, established companies have substantial research budgets and vast numbers of consumers to survey, it is particularly critical for new and smaller companies to focus on a carefully targeted segment with questions formulated to meet research objectives. Even a small mistake not only wastes resources, but more importantly, it can render false results and shift strategy in the wrong direction.

A Complete Research Strategy

Market research is not an end in itself. Rather it only serves as a basis for decision-making. It is part of a complete strategy that begins with determining research goals and selecting the proper methodology and concludes with the interpretation of the results and executing the actions indicated. Market research firms are uniquely positioned to assist with research design and administration, but are usually not qualified to help with the entire strategic endeavor. When selecting a research firm, recognize that some firms specialize in particular industries, which provides valuable access and infrastructure. On the other hand, this very specialization can limit their perspective and hamper creativity. Marketing consultants, on the other hand, can bring experience from a range of industries with the broad perspective that leads to innovative solutions. They can help companies with the entire strategic process, from goal-setting and research design to interpretation of results and execution of actions. A blending of strategy and research, vision and practice, ideas and execution is the best way to avoid the common mistakes made in market research and obtain accurate, actionable results that will reduce business uncertainties.

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