Every business encounters challenges or questions that require deeper analysis to arrive at a solution.
How do you price a new product or service so that you’re not too high compared to the competition yet not so low that you’re undervaluing the offering? What’s the best way to establish and market your brand? How will your industry evolve over the next year or two?
These and many other business problems are answered with marketing research, also referred to simply as market research.
What is the marketing research process?
Marketing research is the formal process of collecting data to understand a customer or business problem and providing the information needed to find a solution.
People and teams across an organization, from the CEO to the group responsible for a company’s products, can benefit from marketing research.
Typically, a member of the marketing group spearheads that research project.
This research is invaluable for a number of scenarios. Examples include:
- Launching a new business.
- Introducing a new product or service.
- Building a positioning strategy as part of a marketing plan.
- Determining a roadmap for future enhancements to an existing product or service.
- Deciding on which digital marketing tips to employ in an integrated marketing strategy.
Speaking of integrated marketing, market research results assist the integrated marketing process by:
- Defining a consistent message that research shows works well with customers.
- Identifying the most effective marketing channels to reach your clients.
- Coordinating marketing efforts around the brand story that resonates best with customers, thus reducing duplicated effort and saving money.
The marketing research process includes five steps. Let’s look at each in detail.
Step 1: Define the research objective
The first and most important step in the process is to define the research goal. This involves understanding a key business problem that the research is intended to help solve.
The problem can arise from any area of the organization.
If you’re launching a new product or service, you may need insight into which features are critical to include in the offering. Another problem might be understanding why sales are not growing. Or it could be as specific as deciding the best email marketing software to use.
Research provides the necessary intelligence to arrive at an answer.
For example, my team built a software application that allowed companies to manage their online advertising campaigns. Once we built the app, the next question was “What subsequent capabilities should we add to the product?” I implemented marketing research to determine the set of features most desired by customers to work on next.
Tips for defining the research objective:
The challenge here is to translate a business problem into an objective achievable through research. These suggestions can help.
- Translating business problems: To transform a business problem into a researchable one, think of the market research process as providing concrete information to solve the business problem. From this perspective, you can formulate an achievable research objective. Look at a question like, “Why are sales dropping?” In this case, the research can examine if the item being sold is losing customer appeal due to new competition or factors like outdated capabilities.
- Envision the end result: To point the research in the right direction, visualize what you want the end result to look like. You may not know the answer to the business problem, but you can have a sense for the kind of research output that can help. In my example of the software for advertising campaigns, I envisioned a list of features that were ranked by customers in order of importance. So we designed the research to meet this objective.
Step 2: Design the research approach
After defining the goal, it’s time to design the research project.
The design portion involves determining the methodology to capture research data, specifics around how to execute the chosen methodology, and the sample size necessary to obtain reliable results.
Various methodologies exist to perform marketing research. Choose the appropriate approach to gather the desired data based on your objectives.
Some of the methods to consider include:
- A focus group
- Interviews of those affected by the business problem
- A survey or questionnaire
- Experiments using control and test groups
- Direct observation through ethnographic research
Once the methodology is selected, the details must be ironed out. To ensure the research delivers the necessary results to solve the business problem, a number of decisions must be made. These decisions include:
- Who should participate? Is it your customers, internal staff, or both?
- Which customer segments should be involved: all of them or specific types of customers?
- How should research participants be selected, randomly or by design?
- How many participants are needed to obtain the appropriate sample size?
- What kinds of questions should be asked of participants?
- How can you design the questions to remove any bias that can taint the responses?
- How should responses be collected? Online, in person, over the phone?
Tips for designing the research:
As you can see, a lot of thought goes into designing the research. Here are some tips to help you with this portion of the market research steps.
- Leverage a research specialist: Because the design phase is critical to obtaining reliable research results, I recommend implementing the research through a market research specialist. This specialist knows all the ins and outs to effectively execute your research project including which methodology works best for your goals, how to design the research method, data collection techniques, and how to formulate questions to remove bias. I’ve performed many research methods for various projects, and trying to do it without the help of an expert is akin to taking on a full-time job. If you don’t have a specialist on staff, you can partner with a research firm for the duration of a marketing research project.
- Factor in participant costs: Any research project involves some degree of cost. This is especially true if your participants are customers. It’s challenging to find clients willing to take time out of their busy schedules to help with your project, so expect to provide some type of incentive. This can take the form of a gift card, a cash prize, or discounts on your services. Without an incentive, participant involvement will be low, and you will struggle to achieve the necessary sample size to obtain valid research results.
Step 3: Collect the data
Next comes the data collection process. Launch whatever means of data collection you defined during the design stage. This can be as simple as deploying an online survey tool or as involved as visiting customers to perform in-person interviews or focus groups.
The data collection can even include mining your own CRM software for data insights. This makes sense particularly if your business problem is related to customer acquisition or retention, and you’re using the software for activities such as CRM marketing or database marketing.
The data collection piece must be completed before proceeding to the next phase of the process. Therefore, factor in the appropriate amount of time for this piece when planning out your research project.
Tips for data collection:
This is the heart of the research project, so it’s important this step proceed smoothly. Here are suggestions for making that happen.
- Set a deadline: The data collection should happen over a tight timeline. This ensures external factors out of your control, say, a new competitor entering your market, are minimized so that the data is consistent throughout the course of the collection period.
- Check initial results: Despite the time spent designing the research, you still want to look at the first set of results to be sure you’re obtaining the necessary insights to solve the business problem. It’s possible you forgot to include an important question or you discover participant selection missed a key group. By looking at initial results, you can determine if an adjustment must be made. If so, you’ll have to decide whether or not to keep these initial results since they won’t reflect your changes.
- Send reminders for online collection methods: If you’re collecting data online where participants provide responses on their own time, such as with an online survey, be sure to inform participants of your deadline. Even so, participants will forget. So send a reminder email shortly before your end date and again on the final day you’re collecting responses. This helps you obtain the largest sample size possible.
Step 4: Analyze the results
Now is the time to make sense of the data you’ve collected. The goal is to arrive at the insights you were looking for at the outset.
You’re looking for clear trends or conclusions that speak to how you can solve the problem you defined at the start of the process.
If you analyze the data and cannot determine a clear outcome, it means your sample size was too small or your research design lacked a key component. The latter rarely happens if you looked at initial results during the data collection step. So you’ll need to make adjustments and collect more data.
Depending on the complexity of the research objectives, methodology used, and data points collected, your analysis may require statistical modeling techniques like a regression analysis, calculation of standard deviations, and other means of coalescing around factual, accurate, and reliable data to draw your conclusions.
Tips for analyzing research results:
The data analysis portion can be tricky. Here, a marketing research specialist is invaluable in compiling results, particularly when performing qualitative research such as customer interviews, and performing statistical modeling.
Whether a specialist is available or you’re analyzing the results yourself, here are some helpful tips.
- Look for common characteristics: Group similar responses together in your analysis. For instance, research participants may describe a product you offer in different ways, but it’s clear they are all referring to the same item. In this case, these responses should be tallied together in the final analysis.
- Create visual representations of the data: Once you’ve grouped responses together, you can begin building tables or charts using the data you’ve collected. It’s important to create a visual compilation of research results because this is the primary means of communicating the research outcome to stakeholders and others in the company.
- Call out assumptions: If your research results require you to make some assumptions, highlight this in your analysis.
Step 5: Communicate the results
The marketing research process concludes with the research report. This tool enables sharing of the results, conclusions, and recommendations arising from the analysis.
The report is a document or presentation summarizing the most meaningful takeaways from the research findings. It provides the necessary intelligence for the stakeholders to make informed business decisions.
A typical report begins by restating the research objectives and business problems. From there, present your recommendations to address those problems based on the research outcome.
Note that while the report answers the question that prompted the research in the first place, marketing research is just one input into a business decision, but not the only factor considered by decision-makers.
Tips for communicating results:
All the work up to this point culminates in this research report. See these suggestions for how to finish strong.
- Balance completeness and conciseness: Strike a balance between a thorough report and concisely presenting the findings by separating the main takeaways from any ancillary information, such as the research methodology and underlying assumptions. Include this material in an appendix to the report or in a separate document altogether.
- Convey comprehensible results: The final report should be written for easy understanding. To that end, avoid technical jargon, and focus on insights, answers, and recommendations, not merely a list of facts and figures. To help report recipients digest the information, summarize findings in a visual form like graphs and tables.
- Provide information that serves the research goal: For every chart, fact, or table in the report, consider what it means and the implications. Ask yourself if that piece of information conveys the research conclusions. If not, remove it. We want the final report to remain focused on the objectives that prompted the research in the first place. Including this level of critical thinking to your report makes the research more actionable and meaningful.
Final advice regarding marketing research
The marketing research process, like any other project, requires planning.
Determine the timeframe for completion and identify the required resources and budget to properly execute the market research. Then obtain any necessary approval for these expenditures as part of the design phase of the project.
With the appropriate resources and support behind you, the marketing research project will deliver insightful information to inform your business decisions.
View more information: https://www.fool.com/the-blueprint/marketing-research-process/