The Power of market research
The Power of market research
Many business sectors are dominated by smaller enterprises which often overlook the power of market research.
Most large companies and well-known brands routinely use market research as part of their planning. Its an accepted and valuable element of business practice which helps to inform their marketing, investment priorities and advertising strategies. By contrast, smaller enterprises tend to use the discipline less often. As an experienced market research practitioner, my own recent experiences of the wedding industry - which is dominated by sole traders and micro businesses - is that marketing decisions are more likely to be made on the basis of 'gut instinct' or 'trial-and-error', than evidence-based data collection.
This is a shame because market research can provide valuable insights for all companies, irrespective of size or sector. As if to emphasises the point, the Office for National Statistics (ONS) report that 60% of SME's will cease trading within five years. While some of this drop-out can be explained by the changing circumstances of owners - relocation, family, career breaks - poor business planning is cited as one of the main reasons for failure. The challenges facing start-ups and small businesses have been further exacerbated by the impact of Covid-19 across many sectors, such as hospitality.
Why is market research not being used?
I believe the main reason is probably linked to a combination of time and money pressures that make it less of a priority for SME's. During the last five years I have spoken to hundreds of wedding suppliers across different specialisms. I know how most are having to juggle business commitments and long hours alongside a busy family life. Therefore, its not surprising to find their main business priorities are focused on building brand awareness, enquiry handling and service delivery, i.e. doing the job. The problem with this is that it can then be difficult for owners or managers to see the "wood from the trees" when needed, especially for their marketing and planning.
Beyond a lack of time I also believe the concept of market research has a much lower awareness among smaller businesses than their larger counterparts, who will usually have specialist marketing staff. The result is that market research suffers from something of an image problem, i.e. its just not seen as "essential" or intrinsic to business success. In short, SME owners would rather allocate their time/money toward sales and advertising than market research.
This is potentially damaging and something we are keen to redress because actionable research has the scope to find answers and point owners in the right direction. In simple terms, market research can help to shorten the 'learning curve' for newer businesses or those looking to repurpose and rebrand services. It does this by helping to focus attention on marketing activities that will "pull" customers in, while highlighting things that make a business less attractive to potential enquirers. In other words, market research is a good way for a business to review and reflect on practices and a marketing-mix that may no longer be working or effective for the digital era.
Still not convinced?
One only needs to watch programmes such as Dragons Den to appreciate how really successful business people think and the emphasis they place on prospective entrepreneurs doing their "homework". Think about it, if you were a Dragon would you want to invest £000's in a new venture where the owners had not researched their market or couldn't demonstrate a clear understanding of the core audience? Why is it that in the personal sphere we are happy and comfortable researching holidays, major consumer purchases and alike, but when it comes to running a business many SME's don't do the same?
In a helpful learning resource "100 Wedding Business Marketing Ideas" published by the Wedding Industry Supplier Network for its 10,000 members, both of their top two tips were research orientated. The implication is clear - it is no good having a great product or service if your marketing and advertising is aiming in the wrong direction or isn't tuned-in to emerging trends. For example, I know that most wedding suppliers rely heavily on their website, social media, flyers, wedding shows, directories, magazines, etc. for promoting their service; but how many have asked themselves why? Rather than being influenced by the sleek sales pitch of the advertisers and event organisers, wouldn’t it be simpler and more effective to know what your core audience says are the best way to reach them and where they get most of their ideas?
It was for this reason that we created a new marketing information resource for the wedding industry in 2019 - What Brides Want - specifically aimed at helping newer suppliers and those needing a clearer picture of how modern couples purchase wedding services. It was based on a simple premise that brides-to-be were the main planners and information gatherers for the majority of weddings, so marketing becomes easier when you know what this core audience is thinking and doing. Our subsequent quantitative research found shifting and distinct patterns of behaviour across different types of bride. More importantly we found that the most effective ways for wedding suppliers to attract new enquiries did not need to rely on many of the costly 'traditional' methods that were being used by most suppliers!
The role of market research.
Clearly market research by itself will not create a successful business. It would be too simplistic to say otherwise as there are many other elements to good marketing and business planning, not least the effective nurturing of enquiries. But even here, knowing more about your key audience or ideal customer puts SME's in a much better position to win prospects over. Perhaps one of the strongest reasons for considering market research at the moment is the rapid rate of change associated with the digital era and the consequences of Covid-19. Where previous social and marketing trends may have been evolutionary, today things are moving far more quickly. Plans are having to be constantly reviewed and adapted. Just as we would expect a well-prepared student to do better in an exam than one who has not revised, market research is a simple way for any business to "work smart" in competitive industry sectors.
Like me, many of you reading this will be accustomed to using reading glasses. Without them, we strain and struggle to make sense of words and images which only appear jumbled or blurred. Putting them on is like turning a light on, where things quickly become clear and understandable. Likewise, market research is a business tool that SME's can use to make their decision making easier and sharper, but whether they do is ultimately their decision. I hope this article has at least given non-users or sceptics pause for thought on what the possibilities of research offer.
This blog was written by Robert Rayner (MA Marketing), founder of The Market Research Service and formerly of Wedding ConneXions and Accord Marketing & Research.
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