8 tips to make the most of your market research budget
Companies are often afraid of spending too much effort and money on market research, and that it might not provide enough value for how much they put into it. However, results from market research (if done right) are a powerful tool to improve packaging, products, brands and even the company as a whole. In this post, I want to show, from a psychologist’s perspective, a few easy ways to make the most of your market research budget and get the best value for money, whether you are able and willing to spend a lot or just a little on it.
1. Know exactly which questions you need answered
When spending money on market research, it can be tempting to try and find out as much as possible. However, this ‘fishing expedition’ approach may result in you spending more money than you should, and leave you with a large amount of results that aren’t particularly useful at this stage. Instead, take the time to separate out your questions into ones that would just be ‘nice to know’, and ones that are crucial to your company’s success. Then put your main efforts into finding the answers to your essential questions. Don’t try to fit too much into a single study.
2. Base your sample size on what you need to find out
Sample sizes and the statistical power associated with them depend largely on how many groups you want to compare. If you are just interested in responses from the market overall, you will need fewer participants than when you want to compare men and women. Regional comparisons will significantly increase the number of people that need to take part in your study in order to get meaningful results, and increase the cost of your research. Identify whether these comparisons matter to your research questions. There are plenty of cases where regional comparisons are important, for example when you want to find out why a product is performing well in one region but worse in another. There might however be other, more general questions that can be answered without having to use regional splits.
3. Know your target market and tailor your research to it
In order to get results that really matter to your company, it is helpful to use participants who are part of your target market. A lot of the time research is carried out with a wide range of participants, all age groups, both genders, income ranges etc., which can be the right approach. More often than not you will however benefit from using more specific samples. Separating people into groups such as age or location can often be a waste of time. A more pragmatic approach may be to separate according to lifestyle or personal tastes. If you know that your target market are people over 35 who do most of the shopping in their households, use this as a selection criterion. Narrowing down your participant groups can also help reduce costs – sometimes slightly smaller sample sizes can be used because there is less variation in the data, and fewer groups to compare.
4. Pick the right time to carry out your research
Often market research is carried out too late and seen as a confirmation of decisions rather than a tool that can help you make decisions. If you want to design new packaging, for example, market research can not only be used to compare several finalised designs but can already help you in the pre-design stage by letting you know which ideas are likely to work and which ones won’t. Neuromarketing is ideal for this sort of testing because it can be used to look into how people subconsciously feel towards concepts, colour schemes, words and just ideas in general, instead of presenting people with a final design and asking what they think about it. Similarly, when you notice problems such as decreasing sales don’t wait until these are more established, but use market research to counteract these quickly and effectively.
5. Don’t waste money on research that won’t give you the answers you need
This point cannot be repeated enough: Traditional ‘asking methods’ (such as surveys, focus groups and interviews) will give you answers to the questions you ask, but these explicit answers are not always the key to what people really think. A large amount of people’s decision-making processes are subconscious and your respondents will be unable to understand the factors influencing their decisions, let alone tell you about them. It is important to use the most effective research available to you, one that takes all factors influencing behaviour into account and gives you the answers you really need to hear. I’m not saying don’t ask people, don’t just ask people.
6. Make use of on-line tools
I have already pointed out that surveys are usually not the best way to find all the answers to your research questions, but there are plenty of implicit on-line tools that will. Neuromarketing does not necessarily mean that you have to wire people up and test their brain activity and biophysiological responses; rather, there are many tests that look at subconscious associations and reactions on-line. These tests are incredibly cost and time effective: Hundreds and thousands of specifically targeted people can be reached quickly and at a comparatively low cost. It’s important to note that measuring implicit attitudes is not the same as indirect questioning.
7. Make the most of your results by avoiding confirmation bias
It is easy to get results back, look through them and mainly focus on the insights that make the most sense to you, the parts that feel intuitively right and ignore the rest. We are all guilty of forming opinions and then picking out facts that confirm these exact opinions (confirmation bias). However, by using this approach you might miss important details in the results that are essential for you to move forward successfully. There are other ways in which expert opinions can help you make the right decisions based on your research. Often, people confuse correlation (A and B often occur together) with causation (A causes B), which can make them draw the wrong conclusions. Do not be afraid to go back to the people who carried out your research! Good reports already tend to include advice regarding what exactly individual results mean in relation to the company strategy and what good future research steps might be, but your researchers are always happy to clarify any details and point you in the right direction. This will help you use your results in the most effective way.
8. See market research as an investment
As I said in the beginning, many companies are worried that they will not get enough value out of their market research. You might have carried out research in the past and the results did not lead to the improvement you were hoping for, or you might not be sure if your funds should be spent on research or other important areas within your company. But it is important to understand that you can benefit tremendously from better understanding your customers, what they want, how they truly feel about your brands, products and advertising by using the best market research methods available. Understanding what truly drives your customers’ behaviour will help you become a more successful company, which is why you should see market research as an investment.