Talking Marketing Research here. There are plenty of risks taken, shelved and avoided in business; that’s what makes it exciting. In marketing research the plan is to lessen the risk with clever insights using carefully considered research design.
When I was a junior client researcher I attended numerous training courses and workshops aimed at increasing my understanding of research techniques and analyses. Without fail, someone would mention ‘risk limitation‘; that by using market research to test theories or products or customer opinions it limits the company’s risk of making a costly mistake. Some went as far as to say that risk limitation is the definition of marketing research.
In my last blog I referred to an article questioning if companies are becoming more risk averse. Certainly, the article mooted, UK companies were more risk averse than their US and European counterparts. This has been reflected in the shallower depth of pockets of most marketing departments, although more recently budgets have improved since the economy has shown ‘shoots of recovery’.
Risk aversion in a competitive market is a foolish strategy. By definition it limits investment where there is no tangible proof of return. Many large companies have already invested in software to keep a keen eye on their customers and suppliers: in-house CRM and Salesforce systems serve as eyes and ears among a definitive audience; digital marketing activity, channel marketing and social media monitoring effectively keep the audience busy. But how do metrics, likes and click thru’s convert to sales in a dynamic market? And what of stagnated product development and the open invitation to competitor’s to enter, or the impact of competitors’ activity on customer loyalty? What effect does risk aversion have on employees?
In a non risk averse environment marketing research limits the risk by identifying pinch points in any development plan. These glitches can be ironed out by further research so that at each stage the level of risk diminishes. A program of research drawn up at the same time as the marketing plan/strategy keeps a hold on the budget and prevents it from spiraling off the chart. It is not a case of the more you spend on research the less the risk, but the greater the risk is when you fail to acknowledge the value of marketing research.
Risk management is a much healthier strategy for uncertain economic times. Knowing which activity to progress relies on more than in house metrics. Ad hoc marketing research is needed from concept development to launch and beyond. A multi media campaign, brand launch, or promotions campaign, for example will require measures to test their effectiveness, that the message is understood and engaged with.
Marketing research does not sit aloof from CRM and Salesforce systems. Rather, it works alongside the data, fleshing it out and making sense of what is happening. As marketing spend recovers from the austere years UK companies will be more challenging in their campaigns I have no doubt. Where there is great (marketing) success, there will be a fine researcher.