In the current economy, market research presents many companies with a catch-22: you need market research to attract new customers, but you need customers to pay for market research.
In a recent post on his Harvard Business blog Marketing Knowhow, Harvard Business School professor John Quelch writes that many businesses are sacrificing their market research efforts due to budget constraints:
In the U.S., spending on market research has dipped for four consecutive quarters, and chief marketing officers don’t expect the situation to turn around soon. Most big consumer marketers are seeking to shave 10 to 20 percent off research budgets.
Quelch points out that during a recession, companies need solid market research more than ever, saying, “In flush times, a rising tide of consumption can compensate for less than optimal branding, positioning, pricing or segmentation. That is certainly not the case now.”
Quelch offers tips for getting the most out of market research on a reduced budget, including three places to focus your company’s efforts:
- 1. Core customers and core brands: Since your core customers and best-selling brands will determine how well you fare in a recession, it’s most important to keep tabs on them. “When times are good, there is budget available for increased research on secondary products or customers. Now, nice-to-knows that are not essential will have to wait,” Quelch writes.
- 2. Developing markets: “Brand preferences and consumption levels in emerging markets such as China, India and Brazil tend to be more fluid. Consumer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop,” says Quelch.
- 3. DIY solutions: Just because your market research budget has been cut doesn’t mean your efforts have to stop. Quelch suggests using resources like SurveyMonkey to receive customer feedback. However, Quelch includes a caveat for going the do-it-yourself route: “You risk getting no more than what you pay for. The opinions of a convenience sample…may not represent all users.”
Has your company cut market research or do you see it as a key part of your budget? Have you found any cheaper means of conducting valuable research?
Feedback image courtesy of Flickr user Boltron, CC 2.0
