4 Steps to Determining the Value of Market Research
To give themselves an advantage over their competitors, companies have long been looking towards market research. But in a world where budgets are becoming increasingly tight, insight teams are having to justify the value of research more and more.
Unfortunately, trying to prove the value of research isn’t just a case of doing a few calculations and getting a straight forward answer. There’s a whole host of factors that can influence research value and how each of these are identified also varies.
In my experience however, here are the four most telling research value indicators:
1. The Insight Delivered
As I mentioned in my previous blog (In Brief: What Makes Insight So Hard to Achieve?), insight is only achieved when you find out something new.
A project which delivers true insight, a real key nugget that gleams, is clearly much more valuable than a project that rehashes old information and/or lacks a tangible interpretation of the data.
2. What You’ve Been Able To Change
Knowing what to take away from the research is one thing, having a clear indication as to how these findings should be implemented is another. This is essential in establishing research value. It doesn’t matter whether it’s one big change or multiple smaller changes, if they are going to have a positive impact on your organisation, the project has been effective.
That said, not all research leads to a specific business change immediately, rather it provides an indication of the direction in which the next project needs to be taken. Whist such research is not actionable in itself, value should still be placed on it if it provides an accurate foundation for the projects that follow. If it focuses research investment for maximum return, and means that future projects can progress faster than they would have independently, value has been realised.
There are 4 key research value metrics: Insight. Implementation. Impact and ROI.
3. The Customer Impact
It’s not necessarily the size of the changes that is important; it’s the impact that they have on your customer. A small change isn’t necessarily going to have a lesser impact on customers than a big change would do. It depends on the exact circumstances.
A good example of a small change having a big impact is where the information on the auto-response email customers receive when contacting customer services is amended as part of a wider communications project. Imagine customers previously received a response to their emails to indicate that the email had been received and that they would be contacted as soon as possible. Then a change was made to include an indication of when a response will be received (e.g. within 3 working days).
This might only seem like a minor change, but in reality it will provide the customer with clearer expectations as to when they will receive a response to their email, supporting their overall satisfaction with email as a communication channel. It will also help cut back on second emails from customers querying when they will receive a response if one was not received in the time frame they deemed acceptable, therefore reducing the number of queries customer services receive and have to respond to.
It’s not about the size of the change you make. it’s about the impact it has on your customer”
4. The Return On Investment
Finally, but probably the aspect of value that matters the most to those holding the purse-strings is the return on investment. Unfortunately for insight teams around the world, it’s probably the hardest of the four to demonstrate.
In the cases where a project has led to a long term business goal, a new product release for example or an improvement in consumer perception,, it’s hard for ROI to be calculated until further down the line when the impact has been realised in business profits.
For these projects, the business may well have concluded the research ROI evaluation before the true ROI can be calculated. In such cases it’s important to highlight that whilst the ROI can’t be demonstrated at that particular moment, changes are being made and in the long term the business will gain.
For those projects where ROI is more easily calculated, there should be an overall return on investment in order to justify future projects.
What Does All This Mean For The Industry?
In a bid to achieve more research within their already tight budgets, insight teams alike are moving away from the traditional full service model to a more flexible way of working. Some are choosing to conduct their research wholly in-house with licensed software, some are outsourcing the entire function and some are looking to agencies to run certain parts of the research alongside them.