“We don’t need research. It’ll just tell us everything we already know.”
There you have it. My most dreaded statement. As a research professional with 25 years of experience, this kind of sentiment causes heart palpitations every time. Why? Because it’s just not true. Market research is powerful. It helps us learn from the past, develop the present, and predict the future. I have seen market research launch successful companies, turn around failing companies, refresh tired brands, generate game-changing innovations, increase customer loyalty, improve employee engagement, and restructure organizations.
So why do some people still shun research? Because they haven’t experienced market research that has actionable insights.
If someone has invested money in market research and doesn’t get any insight on what to do with the information, it becomes research for the sake of research. That’s why it’s essential for any researcher and/or company to connect research questions with business objectives and desired business outcomes. Otherwise, the resulting research becomes a 150-page, beautifully designed PowerPoint presentation. And nothing more.
So what does research that will create actionable insights look like? Simple. It’s a series of questions that have to be answered in order to make the right business decisions. The following is a high-level list of questions I use. In fact, before I even develop a proposal, let alone the research, I ask these questions:
- How will knowing this information impact the business? Do you need to…?
- Grow your customer base
- Increase purchase frequency
- Improve profitability
- Reach new audiences
- Increase customer retention
- What results do you expect to see from this research? What are your hypotheses?
- What research findings would make you pursue this idea? What would make you stop? Why?
When research isn’t linked to business objectives, it isn’t actionable. Here’s an example:
A consumer luxury product company conducted a large-scale market research study to determine the feasibility of a new product. The researcher designed and fielded the study and determined there was an exceptionally high level of interest in the product at a particular price point relative to the interest they had seen in past product research. The research recommended continuing with product development and launch.
However, the research failed to understand the desired business outcome for the launch of the new product.
The Situation: The client wanted to launch a new product and needed to understand price sensitivity and ultimately how to price it.
The Client’s Research Request: What is the level of interest in this product at various price points? How should we price it at launch?
The Research Results: There were exceptionally high interest levels and strong KPIs for the idea overall. The highest level of interest was at the $100 price point and dropped precipitously at each increment thereafter. The researcher made an unequivocal recommendation to pursue launch at the $100 price point.
The Business Results: The company launched the product at $100 and saw product sales ramp up quickly. However, the company did not meet their revenue goals, so they increased the price. But unfortunately, a price increase for a product that was not positioned to be premium had a dramatic and negative impact on both interest and revenue. The company eventually pulled the product.
So what happened? The breakdown in communication happened when the desired business outcome of this new product was not clearly articulated. The product manager simply asked the researcher to determine if the product was a good idea and what the price point should be. Which meant the research recommendation was not crafted to answer the actual business question, so the results were ultimately not actionable.
It turns out this new product was created to help the organization double its revenues in three years. While the research recommendation was well thought out, it was not framed by how the company could utilize the new product to double the revenues. If the research recommendation would have been presented in the correct business frame, it would have recommended launching and pricing the new product at $200.
While the highest number of people were generally interested in the product at the lower price point, the predicted revenue fell significantly short, despite a significant adoption rate in market. Even with a much lower overall interest at the higher price point, the balance of volume with price predicted a much higher revenue over time. In fact, those interested in the higher price were more committed to buying it.
The moral? Before embarking on any research engagement, be sure to clarify the business objectives and desired outcomes. Because if research isn’t designed or analyzed to address a specific business need, it is not actionable and its main outcome will most likely be this: Another jaded professional ready say, “we don’t need research.”