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Welcome to the The Marketing Source e-newsletter! Our goal is to provide you with real-world marketing tips.If you have any ideas for articles, please send them along.
Customer Loyalty Doesn't Exist. Invest in Market Research.
It's easy for even the best and biggest companies to lose touch with what customers need and want. After all, customers are fickle and the world moves at an astonishing speed.
Just the other day, a client told us "We don't really know why our customers buy from us - or why they stop. We deliver on time and get our customers' orders right, but we still lose accounts. Isn't there any loyalty?"
No. There is no loyalty. Your job as a good marketer is to understand your customer, what he/she wants, needs who they are, what they want, when they buy, why they choose your products (or why they don't), how they get information, what they demand and what would delight them. And the only way to know all of this is to continually ask them for feedback and regularly invest in market research.
And we can already hear some of you saying "research is expensive." OK, you are right. But losing your customer base is even more expensive.
Here are some tips for planning and organizing your next market research project.
Knowing What You Need to Know
The first step in planning successful research is knowing what you need to learn. Your research should help you solve a particular marketing question. Do you want to know what new products customers want? How they view you and your competitors? What motivates them to buy? How they get information? Figure out what you need to know, and you'll be well on your way to designing a study that delivers information you can really use.
What Kind of Research do I need?
Market research is done in four basic methods that include interviews, focus groups, surveys and secondary research. Each method has pros and cons that should be considered before committing. Here's a brief summary:
Method One: Interviews
What it is: One-on-one interviews, with customers or potential customers, conducted via telephone or in- person.
Pros: Good for gathering in-depth information, investigating how and why people do things or choose things, understanding beliefs and perceptions.
Cons: Time consuming (you have to recruit and schedule each interview separately), you can't generalize the results of your interviews across all your customers or prospects, you may have to pay people to participate.
Bonus: Good way to reach people who won't respond to surveys or attend a focus group (for example, CEOs, physicians or others whose time is in demand) and to gather information on sensitive subjects.
Method Two: Focus Groups
What it is: Facilitated discussion group of 8 to 12 people often conducted in a room with two-way glass.
Pros: Good for getting reactions to ideas or advertising concepts, gathering in-depth information, investigating how and why people do things or choose things.
Cons: You can't generalize the results of your interviews across all your customers; groups can be difficult to facilitate.
Bonus: The group can generate ideas and respond to each other's comments and questions; you can audio or videotape focus group or arrange the group so key staff members can observe.
Method Three: Surveys
What it is: A series of mostly closed-ended questions mailed or emailed to the target audience. Can also be administered via phone.
Pros: Good for collecting demographic information and data about habits, perceptions, likes and dislikes; if the survey is large enough, you can generalize this information.
Cons: Difficult to ask open-ended opinion questions; long surveys are difficult for people to complete; information must be tabulated and analyzed to be useful.
Bonus: You can survey a large number of people at a relatively low cost; you can easily target specific groups of customers and prospective customers by buying lists to mail or call.
Method Four: Secondary Research
What it is: Collection of articles, data and research studies done by others.
Pros: Good for collecting information about trends, outlooks for particular industries, some demographic information.
Cons: Not specific to your company or organization; can't be customized with your questions.
Bonus: Inexpensive alternative if you have general questions; good information readily available on the Internet, through research companies and through trade organizations.
Hire a Pro or Do It Yourself?
Marketing research is labor intensive and you may not have the analytical tools to do the job. If you want to do a simple survey with existing customers, interview your top ten customers about a particular issue or conduct ongoing customers satisfaction research, you may able to do it yourself. If you are looking at updating your brand, launching a new line of products or evaluating price points, get professional help. Basic rule of thumb: if your research will impact an expensive or major strategic initiative for your organization, call in the experts.
Investing in Research
You should invest time up front figuring out what you want to know, refining your questions and determining exactly who you want to research. You should also expect to make a financial investment. Marketing research firms charge for their valuable expertise in designing studies and analyzing data, and for the actual costs of research, such as mailing or phone costs for surveys and facilities for running focus groups. Talk to at least three companies about your project and you'll end up with a good idea of what's involved and what you need to spend to get what you want.
Bottom line: No matter how well you know your customers, there's just no substitute for conducting research on a regular basis. With good marketing research, you'll have a better handle on what your customers really think and want. Without it, you are drifting around hoping what you do is close enough to what your customers want to make a difference for your company.
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