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Great Market Research on a Budget

by Enrique De Argaez, MBA, P.E., webmaster

Every day thousands of marketing research studies and surveys are conducted asking hundreds of thousands of questions. However, much of the information collected is not put into use because it is irrelevant. In other words: garbage in, garbage out. There are no bad questions, only irrelevant ones. In other words, the majority of questions asked are irrelevant. That is, they don't result in answers that lead to actions.

The purpose of marketing research is to provide marketers with information that leads to actions that, in turn, lead to making more money. While interesting information might be food for the intellect, it is usually a waste of money unless it leads to action.

The challenge to any marketer is getting the absolute most out of his or her marketing research investment, therefore, it is in asking questions relating to areas where action is possible that great research starts. The trick, of course, is knowing what questions to ask.

To put you on the right track to finding the right survey questions here are six tips:

1. Don't be lazy.

Marketers are amazingly lazy when it comes to marketing research. They find it less mind-numbing to ask lots and lots of questions, in the hope that at least some will be the right ones, than to struggle through a winnowing process to determine which ones are pivotal. Long, rambling, expensive questionnaires feed the common wisdom that asking every possible question means asking at least some that are relevant.

Getting lots of answers isn't itself the problem. Rather, the trick is knowing the ones on which to hang your marketing dollars—and maybe even your job. A little bit of anticipation when planning your research projects will produce far fewer and far more meaningful questions.

2. Understand leverage.

Leverage speaks to the essence of meaningful research. Is your greatest opportunity for growth in selling more to current customers? Trying to recapture lost customers? Attracting new ones? Is it in energizing your current sales people or enlarging the sales force? Is it in adding new products or services?

Many marketers will cop out by saying all these leverage points are important. And they are. But unless you have a Microsoft or General Foods research budget, it's likely you don't have the funds available to address them all at once and achieve results that are meaningful for any one of them. The most actionable research should focus on the one or two leverage points that will produce the most immediate sales results.

3. KISS (keep it simple, stupid).

Asking the right questions only happens when you know where action is possible. It's pointless to ask questions about customer service if you are not ready to make improvements to the service that you provide. It's pointless to know that your product no longer meets the needs of the marketplace, unless you're willing to change it.

Many marketers think that knowing such things might let them face the future on a more informed basis. Maybe so—but so what? They have simply uncovered information that they can't use now to improve their business.

When you get the answer to just one question where you can and will immediately take action to improve your business, all you need to do is ask that one question. If there are two or more questions with results that will move you to action, ask those.

If you want to cloud the issue by asking a bunch of other questions just in case you don't like the answers you get to the relevant ones, you always have that choice. But it's a cowardly way out. Keep this in mind: One of the biggest reasons companies fail to get everything they can from marketing research is because they are frozen into inaction by too much information.

4. Anticipate answers, anticipate actions.

It takes time and often mind-numbing work to anticipate the actions you'd take as a result of research. For example:

* If your intention is that your advertising communicates your product as high quality, and research shows that 33% of your prospects feel that is in fact what is being communicated—is that good enough? If not, what would you do?

* If you find out that 80% of your prospects buy from your main competitor because they have after-the-sale support that you don't offer, are you happy with the 20% share you are getting or are you willing to offer the same services to meet your competitor head on? If not, what would you do?

* If your research shows that 20% of your customers rate your sales or customer service people as excellent, but 50% rate them only as good, what do you do with that information? If you are not willing to take action that moves customers from a very good to an excellent rating, what would you do instead?

In each of these examples, you will have likely wasted your research dollars if you fail to anticipate action steps before the research results are available. It's far too easy to rationalize your to way inaction when you haven't set predetermined action steps.

5. Anticipate economic realities.

Over and over again, companies collect research data under the false assumption that data will dictate action. Think about the marketing director who says, "How can I know what I'll do with the information until I see it? Once the data is available, then I'll know how much I can afford spend to address the situation."

That mindset is self-defeating. There is simply no point in collecting data without a nod to at least minimal economic realities. The company that learns it loses customers because its telephone sales operation is too slow, but can't afford to hire additional salespeople, has wasted its research dollars. The food company that can't afford to extend its product line to address consumer flavor preferences has wasted its money by learning that the current product lineup is limiting its growth. And, clearly, the examples are limitless.

6. Asking the right questions.

Here is where the rubber meets the road. At the outset, the more you know about your customers and prospects, the better sense you'll have where that information could lead to action. When there is little information to help frame the questions, it is doubly important to anticipate possible actions. Whether you are swimming in past research or starting from scratch, try the following exercise when planning your next research project:

1. If you had the answer to one question that would grow your business in the next six months, what would that be?

2. What are the potential answers that you might get from research into question 1.

3. Write down three actions that you could afford to take for each answer you listed in question 2.

4. Show what you have written for points 1, 2 and 3 to a business associate and ask that person to rephrase your question. That is, ask how to state your question in another way, from another point of view, using different wording.

5. Have your associate write down the potential answers that he or she might get from research into question 4.

6. Then, referring to point 5, write down three actions that you could afford to take based on the questions and answers your associate created.

7. Repeat this process with other associates until you are crystal clear about which questions being asked are the right ones, what the potential answers might be and in what areas you can afford to take action.

This simple process will allow you to view your question from various points of view and look at action steps from various questioning perspectives. Realize that it is normal to ask a series of questions to generate information that will lead to action. The point is, you should be narrowing your questions to the point where the answers do, in fact, lead to clear actions that you are willing to take.

Generally, answers to one set of questions will lead to another set of questions. Information sometimes creates the need for more information. Even if the questions asked are the right ones, know that there is the terrible tendency for marketers NOT to take actions that they had planned beforehand.

Instead, they are tempted into conducting additional research to address the new questions that are raised. This is called research for the sake of research, and the research suppliers are the only ones that make any money from it.

Conducting research and then not using what you learned is a waste of time and money, as well as a self-defeating proposition. Be prepared to take action from the results you get, otherwise save the money you've invested in market research.

Enrique De Argaez

About the Author:
Enrique De Argaez is the webmaster of the
"Internet World Stats" website. Since 2000 he has been collecting Internet Usage Statistics, and publishing the data for over 233 countries and regions of the world for free use by the academia, the global business community and the general public. For more information on Internet World Usage, visit his web site at: http://www.InternetWorldStats.com

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