In the B2B sector, market research tends to be viewed as an option rather than as a commercial imperative, particularly for smaller companies. However, knowledge is power and understanding the attitudes, preferences and/or perceptions of customers and potential customers towards a product, service or brand proposition is essential for any organisation seeking to expand its business.
When carried out well, market research cuts the risk out of marketing and enables more effective targeting, allowing companies to make the best use of opportunities and to reach new audiences. It takes perception and guesswork out of the equation and highlights problem areas; it also provides actionable recommendations in the face of internal disagreements.
Getting a view from customers reduces failure rates by eliminating some options early on, says Elizabeth Lore, MD of Marketing Analytics. Getting it wrong can be really expensive and some 70 per cent of product launches fail worldwide.
There are two types of market research: qualitative and quantitative. Quantitative research is numeric, undertaken through a structured questionnaire and answers the questions ‘What?’ and ‘How many?’ Qualitative is more exploratory and is used for developing a strategy and targeting a main audience. It answers the questions ‘How?’ and ‘Why?’
Identify the ideal audience and that will dictate the most appropriate approach, which may be a combination of the two, says Cara Berry, MD of BPRI Group.
Quantitative research uses larger sample sizes so that results can be analysed by a sub-group, and mostly closed questions would be used, so the answers would be yes or no, or on a scale of one to five or 10, she says. Qualitative uses smaller sample sizes and requires more time from respondents and interviewers. It is about the skills of the interviewer, who identifies key signals from the answers and responds to those.
For all types of market research, it is vital to define the objective and the target audience clearly, and check that the sample is representative. Then frame the questions carefully. Keep it simple and limit yourself to what you understand, so that you know how to apply the answers, says Steve Marantz, director of Metro Research. It is serious, it has implications for company decision making.
Bounce ideas off other people, he continues. It is surprising how often you miss the number of answers people could give. You can also provide open-ended options or where you want participants to decide whether they are pro or anti narrow down the choices.
The main risk is that questions devised by an organisation may not be objective. The response may be biased because the product was positively positioned and in the real world, it will not be positioned as such and take-up will be slower than anticipated, says Sue Hannay, research services director for Business Advantage. It may be worth paying £1000 to an agency to check the questionnaire, she comments.
There are three main ways to undertake research: email, telephone, face-to-face contact. The profile of the target respondent should dictate the method used. Postal self-completion forms are also possible but they tend to generate a low response rate, providing an unrepresentative sample. Email has taken over from this.
Email research is the easiest for a company to undertake and is best used for quantitative research. It works best when targeting a known group of people, such as staff or top customers, and is most effective for quantitative research.
Another form of email research is online panels: groups of people who agree to participate in a certain number of surveys a year. If the precise set of people you want does not exist in panel form, take a broader set and ask qualifying questions to filter out the right profile, says Marantz of Metro Research. Either way, the quality of your mailing list is crucial. Make sure it is clean.
Most experts agree that the telephone is an excellent way of doing qualitative research. If you need to get a feel for a subject, you might do half a dozen in-depth interviews on the phone, says Nick Hague, senior partner of B2B International. This will give an understanding that will allow you to design a more structured questionnaire for a greater number of interviews, although still for a relatively small group, such as 50 to 100 people.
The most expensive but also most personal methodology is face-to-face. It is most effective for qualitative research and tends to be used when targeting senior business people.
Despite the demands that good market research makes on both time and wallet, there are viable ways for organisations to undertake meaningful campaigns on a low budget.
Telephone research: Some 90 per cent of interviews in B2B are carried out by telephone. We have a number of clients that task their salespeople to telephone 10 customers each month for research purposes, says Alan Cooper, senior partner of HPI Research. They reach a wide selection of companies.
However, the main downside is that it can be difficult to track down decision makers in target companies, and even when they have been identified it is often hard to get past gatekeepers (secretaries, assistants, etc.). To achieve 50 interviews could mean calling 500 people, says Marantz of Metro Research. Companies will have a good idea how accessible their clients are.
Questionnaires at events: This is particularly useful for tapping into people who are difficult to get hold of and an added advantage is that people at an event are qualified by their presence. However, they may need an incentive to spend extra time at your stand. You need a prize draw or cash incentive, perhaps a donation to a charity, to motivate people to answer questions, says Marantz. Alternatively, Lore of Marketing Analytics suggests taking visitors’ business cards with a view to contacting them later. Partnering to conduct research: You can use an insert in a magazine, but that tends to get small response rates, says Russell Bell of Evo Quantitative. However, in an industry where there is a culture of information-sharing, a company can partner with competitors to research trends. This can also be done through industry and trade associations. Omnibus and syndicate research is also effective.
This is where a group of organisations not always from the same industry get together to carry out a sector study, says Graham Ellor, director of planning for TDA. Pooling budgets allows them to carry out wider research and to share the results. However, there are relatively few B2B omnibus or syndicate studies.
Online survey tools: This is probably the easiest method for a company to handle inhouse and is certainly the least expensive. Tools such as SurveyMonkey can be downloaded to allow companies to set up a programme and then send a link for respondents to access it.
Typical response rates are five to15 per cent but it works better for targeting a known audience. An incentive such as access to the survey data often gets better results.
At your own desk: Most companies pride themselves on how much knowledge they have internally, but do not tap it. Keep a competitor intelligence file, says Berry of BPRI Group. Use regular client meetings to gather feedback such as changes and customers’ future plans and follow-up why you have lost business or pitches. In one phone call, you can find out a lot about how your business is perceived and where you fell short. That also leaves the door open for the future. Other sources of information are: business libraries, websites, industry bodies, press coverage and government research.
There are other factors to consider when planning research.
1. Don’t do it for its own sake. Sue Brooker, research development director for BMRB, advises, It is important that companies consider whether or not they would benefit from conducting research every year. I don’t advocate doing research if they don’t need or use it but it is important to consider it seriously.
2. Set acheivable objectives. Try not to do everything at once, says Berry. Focus on areas of biggest impact and make a point of measuring the impact so that you can see ROI. This will act as an incentive to make a habit of it.
3. Don’t duplicate. Before you commission research, check that it has not already been done by someone else, says Brooker of BMRB.
4. Get expert advice if required. Cooper of HPI Research, suggests using an agency in the first year, doing it yourself the second. However, in general, the bigger the project, the more sense it makes to use an agency. An agency will be able to advise you on what to do, guarantee to deliver findings and help you understand the implications for your business, says Marantz of Metro Research. An agency turns around in a couple of weeks what you can do in couple of months.
And the cost? Minimum cost for an online omnibus survey would be around £2000, which would buy 15 questions. A major customer research programme could set you back between £10,000 and £50,000 but a small scale online study costs around £4000, according to Russell Bell.
If that sounds daunting, Brooker of BMRB, points out, If you cost out own time, you realise it is an expensive occupation. The cost is hidden if you do it yourself because you don’t see the money going out of the door.
