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10 Ways in which market research can help your business grow
Last Friday I attended what was billed as a ‘High Growth Summit’. The conference room was bursting with budding entrepreneurs, and consultants of every hue keen to advise them. The mood in the room was somewhere between an evangelical service and an excitable football crowd. Tom Joule the founder of Joules – the country clothing brand – was the keynote speaker.
Very early in his talk, which was all delivered in a low key, self-effacing manner, he said something that made me sit up and take notice – “We now do in just three hours the sales turnover that we achieved in our first year of trading.”
That’s phenomenal growth I thought, admittedly achieved over around 20 years. He went on to elaborate part of his business philosophy – “You’ve got to put the customer at the centre of everything. Make it easy all the way.” It got me thinking about the range of ways in which market research can support and help sustain rapid growth for client brands and businesses. From those musings I have pulled together a summary of 10 ways in which market research can help grow your business. I have picked out the inputs and applications that are likely to have the widest relevance:-
- Successfully creating new products or services
Let’s start with perhaps the most obvious R&D. If your product portfolio is not as fresh and vibrant as it might be there is a strong likelihood that your business is slowing rather than growing. Successfully introducing a new product can give you new things to talk to customers about and potentially new types of customers to boot (A Joules wellie boot of course!). New research methods that support collaboration and co-creation with customers are transforming NPD. Enabling the gathering of reactions and insights online or offline in real time or asynchronously. Customer collaboration at an early stage can reduce the risks of failure when the product goes to market.
- Targeting new customer segments
Growing your business by selling your existing products to more and different types of people. Targeting a new customer segment could unlock new revenue streams. It’s likely that if the new potential customers fall outside your traditional heartland, that you know a lot less about them. Their attitudes, purchase behaviours and motivations. Market research can help here. Techniques like Profiling, Persona Creation or Need State Analysis could all usefully add to your understanding of the new customers – What they know or don’t know about your brand? Where they see value in your product? Which competitors you are presently losing out to? How their behaviours differ from what you are used to? Why they haven’t bought from you already? Learning fast about new segments will help you to grow faster.
- Entering new markets
If you have a really strong brand and clear international opportunities, entering new markets can accelerate your revenues. Tom Joule had found that their New British-eccentric style had unsurprisingly gained traction on the eastern seaboard of the United States, more surprising was that it had resonated in Germany too! Even if your ambitions do not stretch across the sea, opening up a new region or extending the brand into a new category or market sector can deliver strong growth. For instance, Joules have recently started selling branded homewares through John Lewis. Market research can support your decision-making by helping you size the market, estimate demand, understand new competitor sets, or appropriately culturalise your marketing communications; a process that goes well beyond simple translation.
- Securing investment and finance
All of the first three business growth strategies described above usually require significant investment. Taking your business to the next level in other ways is very likely to involve finding new funding. Independent market research conducted by a credible MRS Company Partner agency can help you make a stronger, more evidence-based case to investors, business angels, VCs, banks, even your own board to get them on side from the outset. Conducting market research into your new idea, new customers or new markets helps demonstrate that you are serious, thorough and open to external information. It may even turn up valuable insights that you had not anticipated. Tom Joule related that he had been obliged to put his house on the line several times in order to secure the finance he needed to grow his company. If you are going to stake your house on growth, best to be as confident as you can be that you are backing a winner.
- Building your brand
Tom Joule – now focusing upon brand.
Creating, building and maintaining a strong brand is the firm foundation for most business growth strategies. How your product or service is perceived by customers and prospects will largely determine its’ future success. Brand Health research can deliver a much clearer understanding of who is aware of your brand and who isn’t, what kind of image or personality it has and how prepared people are to consider buying from you. Armed with this knowledge you can identify how to extend the reach of your brand and overcome the image and consideration hurdles that are putting a brake on growth. As a company grows, staying true to your brand as it stretches and extends, becomes a bigger and bigger challenge but ever more important. Perhaps in recognition of this, Tom Joule confided that he had recently stepped down from being CEO at Joules and was now concentrating on “…brand awareness and keeping the brand on message.”
- Enhancing customer and staff retention
Your business or brand is only likely to be growing rapidly if you are successful in retaining the customers that you already have. Regularly running Customer Satisfaction research can pinpoint areas to work on and improve, whilst also highlighting who is evangelising about the brand. Strategies to minimise attrition, reduce detraction and nurture advocacy are all likely to pay dividends over the medium to long term. Independently conducted Customer Exit Interviews can also be incredibly revealing about why custom is being lost, particularly in B2B relationship-managed sectors where gripes about the client account team are unlikely to be reported back. Employee Engagement research can perform a similar role to Customer Satisfaction research, with an even more precious company asset – your people. Providing an opportunity for key employees to open up about frustrations or aspirations can be the difference between keeping them driving the business forward and heading off for pastures new.
- Making the right acquisition decisions
Well-judged acquisitions can dramatically accelerate business growth. Joule had acquired a manufacturing operation in China which has helped them keep a tight grip on production costs as they’ve grown. But ‘Caveat emptor’ or ‘Let the buyer beware’ certainly applies when it comes to business acquisitions. Due Diligence processes can often fail to really interrogate the health and strength of the customer or client relationships that the selling business has. Contractual terms and sales m.i. only tell part of the story. Independent Customer Satisfaction research or a full-scale Client Relationship Review can do much to establish the true future health of the business, reduce the reliance upon directors’ warranties and limit the chances of over-paying.
- Getting the price right
Whilst we’re on the subject of paying for things. Market research has many different tools in its armoury to assist businesses in optimising the price they sell goods and services for. This can be particularly useful when introducing new products but also when relaunching or reformulating existing ones. Van Westendorp’s Pricing Sensitivity Meter (PSM) might not have quite the catchy title of ‘Bruce’s Price is Right’ but it gets the job done, when applied in quantitative research.
- Communicating effectively
You can have great products or offer an excellent service but if you fail to communicate and promote them in a compelling, persuasive and engaging way growth will not be strong. Creative Development research and Concept Pre-Testing can be of considerable assistance in originating communications that powerfully and memorably get your message across to the right people in the right way. Avoid investing six and seven-figure sums in communication campaigns and programmes before you’ve invested just a few thousand in researching them!
- Reacting quickly to events
Tom Joule had a concluding message for tomorrow’s ‘high growers’ and it was “You’ve got to keep on top of the speed of retail. Those not on the pace have lost out.” Creating and managing a Customer Panel – people who have pre-agreed to participate in market research a few times each year – can pay dividends in being able to move fast and respond rapidly to events. Having a Panel in place can shorten research turnaround times and reduce costs, whilst at the same time delivering much richer data upon which to select participants. A Customer Panel can help you navigate through choppy waters or react appropriately to a competitor threat.
We may not all have the ambition, tenacity and luck demonstrated by the energetic Mr. Joule but we can all make better informed business decisions by harnessing market research.