This blog post was written by Paul Dybas, our former RMS Business Development Associate.
As a new member of the RMS team, I have learned a lot about market research over the course of my first month. I have also cleared up some of my misconceptions about the industry by comparing what I have learned in college as a marketing major to the practical application of these skills. I find now that much of what I have learned is applicable, which should be refreshing to those pursuing a similar career, but I also realize that there are several aspects of market research that simply cannot be fully understood unless applied. These can be summed up in the following five points:
- Every organization can benefit from market research. To become a leader in an industry, an organization must ask its members, customers or patrons how to best serve and meet their needs. Successful organizations and businesses actively seek this feedback, trust it and use it to their advantage when making important decisions. We often hear about studies that have been conducted by large consumer goods or auto manufacturing companies to better understand their customers and tailor products to fit their specific needs. While this is true, the benefits of market research are not limited to mega corporations and large conglomerates. In fact, many of the businesses and organizations that RMS consults with are small to medium-sized. Further, market research can be applied to any type of industry. RMS currently focuses on five different industries – Healthcare, Finance, Education, Manufacturing and Service. The local school district, bookstore and coffee shop can all benefit from better understanding the individuals that use their products and services.
- Every market research project is different. In college, I was taught about the market research “process.” This process begins with developing a detailed question and forming a focus group with key representatives to identify possible solutions. A survey is then conducted among the target population to quantify the ideas generated in the focus group. The results are analyzed and a conclusion is formed. This method will work for some studies, but not in every case. There are many more research methodologies and even more ways to approach each individual study. There is no “one size fits all” solution to market research. As a result, an organization should demand a close relationship with its market research firm in order to develop a custom approach that yields the most productive results.
- A survey is not always the best solution. Another common misconception is that market research is all about surveying and reporting. A survey is a very powerful tool for analysts because it could be representative of a population, but it is not the most effective or efficient method in every case. A survey will accurately test specific ideas to gather information from a larger population. Consequently, a survey is the most costly due to the labor hours associated with preparing mailings, calling and data entry. Surveys should be used only if there are specific points to test on a broad scale. If an organization simply needs some good ideas or some background information, a much more affordable and effective method is to conduct secondary research or some in-depth interviews (IDIs). This can include gathering demographic data or historical information.
- 400 is the magic number. When it is necessary to complete a survey as a component of a market research study, the firm will want to make sure that feedback from the selected participants is representative of the views of the entire population in the target market. The optimal number of completed surveys is 400. Four hundred completes rests the accuracy of the results within +/- 5 percent of the 95 percent confidence interval. This is the RMS recommended optimal equilibrium between the cost of obtaining feedback and the accuracy of the information.
- Market Research conducted by a third-party yields more accurate results. You have your question, you have contacts and you have a phone! Why not organize and facilitate your own focus group or conduct your own telephone survey? This is a common attitude among organizations that understand the value of research, but are not willing to contract this work to an outside firm. Imagine that your boss is asking your staff for some honest (and consequence free) feedback regarding his or her performance and how he or she can better meet the needs of staff. You may reply with a laundry list of complaints that have been brewing since you were hired, but chances are you won’t say anything that will offend your superior or make your environment uncomfortable. This defeats the purpose of the research altogether as your boss is trying to improve and make the staff happier. Consider an alternative where you share your thoughts with a third-party and they do the analysis, write a report and pass it on to your boss through anonymous comments. There would be no way of knowing who said what, and the report would be from the perspective of an outsider with no internal preconceived notions of your boss. The same is true with consumer research. People are generally reluctant to say something negative directly to the party conducting research; rather, they often feel pressured to say something positive. This is a result of fear of the consequences if what they said is somehow linked back to them. Also, when an organization is attempting to improve, respondents sometimes feel pressure to say something positive rather than say something accurate. Remove these variables by using a third-party market research firm, and the result is open, honest and accurate results that will improve your products and services and thus, your bottom line.
Are you interested in starting a career in market research, visit our careers page on our website. Or if you are a business interested in working with a market research consultant to fit your needs, contact Sandy Baker at SandyB@RMSresults.com or by calling (315) 635-9802.