Editor’s note: Alan Nazarelli is president and CEO of Silicon Valley Research Group, a global market research firm, San Jose, Calif.
Market research is often the stepchild of the marketing process. We frequently encounter companies where it is seldom given much thought. I recently visited a 12-year-old San Francisco Bay Area company that had never done any formal research. They had never bothered to find out who was buying their product – age group, gender, etc. – despite the fact that they spend a lot of money on media advertising.
Why do so many companies shoot in the dark? What are some of the reasons market research is not better embraced and used, especially among technology companies?
Here are some reasons, speculations and anecdotes from years spent calling on and working with technology companies, distilled into three main themes:
1. Market research done badly: Many times poorly executed research that yielded low payback and poor outcomes is to blame. When marketing executives at a firm have a bad experience, even at a previous company, they are often soured on marketing research. As a result they shy away even when they encounter a problem market research can solve. As market research practitioners, we need to ensure we execute projects well and keep with the quality standards of our industry. Every poorly executed project reflects on the industry as a whole. Every poorly recruited focus group participant who gets in when he should have been screened out is a blight on our collective reputations.
I was recently called in to re-do a project for a long-term client. The previous vendor did not have the ability to deliver on its (over-)promise, which was to recruit C-level executives in mid-market firms for a series of site visits. In almost every case, a lower-level manager was recruited instead. The recruited manager was “coached” to say he represented the C-level executive. In one instance, the manager asked if the interview could take place at the coffee shop around the corner because he didn’t want his boss to know he was getting paid for the interview! In this case, the client was willing to spend money on research again (albeit a smaller budget) but such experiences cause many firms to avoid market research activities altogether.
2. The proliferation of big data. The presence and availability of big data is an impediment to doing primary market research. Here’s why: Many companies mine transactional and telemetry data for trends and insights. This is particularly true of companies that practice with a lean start-up mentality. The telemetry and transactional data are invaluable sources of insights. What they fail to do, however, is explain the “why” behind the observed transactional patterns. Moreover, the failure to understand the customer and their journey beyond the transaction creates blind spots that impact marketing. I have written about the concept of a research triangle that is central to our work in research design. There are three facets to customer-facing data and insights-primary research, social sentiment and big data. Focusing on just one or two of these components yields to an incomplete comprehension of buyer behaviors, motivations and drivers.
3. Education and access: The last factor is education and access. I have to admit this oversight by industry players can play in your favor. Over the years, we have spoken to a lot of companies who have never been called on by our competitors or even had an idea that the type of services we and our industry offer were even available. Many market research executives hate to make sales calls. Sometimes founders from academia feel that cold-calling is beneath them. As professionals, they deserve to be found and wooed to accept assignments. As research practitioners, I feel we need to be evangelists and champions for our work. The industry practice is to preach only to the converted. Many companies who could use market research are therefore left in the dark on what market research can do for them. These companies often end up with misperceptions, a lack of education and limited access to the valuable services our industry provides.