Case,for,Market,Research,You,R marketing A Case for Market Research: Do You Really Know What Your Cus

Awhile ago, I got an email from one of the "gurus" I follow and it shocked me. The gist of it was this person wanted to trade services for a household item.To say it floored me would be an understatement.What was worse was a few days later t Automation technologies represent a fundamental aspect of any modern industry. The major types of industrial automation solutions, such as DCS, PLC, SCADA, and MES, are used on a large-scale in process and discrete industries.DCS technologie

Every quarter, Frank Lynn & Associates conducts a channel-marketingworkshop for sales and marketing managers from many different types ofcompanies. Many--even large Fortune 1000 companies--do not use formalcustomer research as a strategic marketing tool.Some of their main excuses include:"Sales people talk to customers all the time. They bring a lot of customer insight.""Customer research is done for product development, and that isn't a constant need."Internally,the discretionary annual marketing budget leans toward marketingcommunications, like new literature campaigns, mailings, etc. to drivegrowth." Smart Businessinterviewed Jeanne Fec, Senior Principal of Frank Lynn & AssociatesInc., to learn more about using formal customer research to optimizeinvestments in new products and drive growth in sales and market share.What about using the sales force for research? Aren't they the critical interface between a company and their customers?Thesales force is one of the biggest investments a company makes, and itcan be used as a "conduit" to understanding customer sentiment. This isimportant. But there are two problematic issues in gathering customerinsight from the company sales force.How do typical salespeople spend their time? If they are good account managers, it is withexisting, high-value customers. Here is the gap. How do we learn fromthose outside the sales force's circle of presence? Companies thatconsistently maintain double-digit growth make it a point to learn andact upon perceptions, purchasing behaviors and expectations ofprospective and low-profile customers.Then there is focus andmotivation. Sales people are trained and paid to sell. It is achallenge to get reliable and effective market research fromsalespeople. A formal customer research effort more effectivelydelivers unbiased data. Customers will also note the extra effort takento understand their perspective.Are there additional reasons to use consistent customer or non-customer research?Researchand development is another big investment that market research canoptimize. Numerous companies fail to include external customer researchin the product development process.Engineering-drivenorganizations are especially vulnerable here. Great ideas are put intomotion because they seem to solve problems or outstrip the competitionon design and capabilities.Successful marketing strategies mustalso take into account the size, sensitivity and buying behavior oftarget end-user segments. This is a step best filled with regularcollection of insight from those customers. But we still have clientscome to us regularly with great products, seeking a market to buy them.End-userresearch can effectively and efficiently answer critical acceptancequestions before a more significant investment is made. These basicquestions can be incorporated into a research methodology that can beconducted in person, over the phone or via questionnaire.Give us some examples of key research questions.Certainly. Let's continue with our example of a new technology product being prepared for a launch.Technology:Does the technology meet the customer's needs or solve the problem? Isit perceived to be robust enough? Or overkill for the existingsituation?Economics: Arethe benefits greater than the cost? Developing an actual selling priceis a challenge in any research methodology, but good research candefine a value-based price range in the mind of the customer.Timing:Are prospective customers capable and willing to make a purchase in theshort term? Asking questions about purchase cycles, budgets, approvalprocesses, centralized versus decentralized buying behaviors, and othertiming questions will help gauge opportunity forecasts.Environment:Research questions can assist in understanding behaviors that have ahigh impact on success. For example, you can test the customer'sinternal environment, which means the customer's level ofsophistication and readiness to adopt the new technology. It is alsocritical to understand the customer's external environment, such asalliances with competitors or previous negative experiences. In theoverall scheme of things, this type of research investment is smallrelative to the cost of R&D and product development.We'vetalked about customer satisfaction research, new customer access andnew product research. Are there other ways that research helpscompanies grow?Good research has proven to help companiesmaintain current share, grow within their customer base, andstrategically grow outside of it. There is one additional benefitresearch can deliver. Customer research can tell us how to raise thebar. It informs us about unmet needs, or identifies unique benefitsthat competitors do not deliver. Article Tags: Formal Customer Research, Market Research, Formal Customer, Customer Research