Is market research worth it? It’s probably a question you are asking yourself if you came across this blog post written by RMS. The following narrative is a blinded case study that addresses the concern for the ROI. Is there an ROI for market research? This case study shows how a small investment in market research could save your organization thousands if not potentially millions of dollars in the long-run. Don’t trust your gut or your emotions, use data to fuel decisions.

Background: A client recently partnered with Research & Marketing Strategies, Inc. (RMS) to conduct customer intercept surveys at a movie theater in New York State. The intercept surveys focused on profiling, behaviors, and potential change in usage of the theaters. The survey identified existing shopper, dining, and entertainment habits of movie-goers to the theater. In particular, the client was interested in understanding the impact of upgrading the movie theater to a premium seating concept.

The client was attempting to understand how upgrading the seating (and thus reducing the number of seats) and charging a higher premium for a ticket would impact usage. With its current seating format, the theater successfully sells out most, if not all, Friday and Saturday night movie times. So if more expensive and less seating were available, would customers go to one of several nearby theaters instead to see the movie? This would not only cost the theater lost revenue but could potentially impact traffic in/to the mall, costing other dining establishments and retail stores lost revenue.

Approach: In order to address the objectives at-hand, RMS customized a 24-question intercept survey administered to shoppers and movie-goers at the location. A total of 152 completes were obtained from the location on a Saturday and Sunday. An interviewer was stationed at pre-determined locations to intercept potential respondents (mostly near the movie theater). Fieldwork began at approximately 11:00 AM and lasted through approximately 10:30 PM both days. The research allowed RMS to speak directly with users of the movie theater and obtain feedback directly from them through this reliable yet unscientific surveying methodology.

Results: Here are a few key takeaways from the market research for the client:

• Will my customers pay additional for premium seating? Yes. Almost 3 out of every 4 respondents would pay additional for the premium seats at the theater.

• Will my customers choose a different local movie theater if my theater offered premium seating at a higher price? No. In fact, almost all customers (96%) would actually go to your theater more (or the same amount) if premium seating were offered.

• How much additional money do my customers spend at the mall when they come to see a movie at the theater? Virtually all customers (92%) shop, dine, or do both when they come to the theater to see a movie which contributes significant additional revenue for the property that would be lost if customers went elsewhere.

• Because the premium seating will reduce the number of seats, what will my customers do if they come to my theater and the movie they want to see is sold out? They will actually spend more time and money at the mall. Nearly half (39%) would shop or dine within the mall while they waited for the next showing. Only 5% of customers would go to a different movie theater at a different location if the movie they wanted to see was sold out.

• Even though it will cost me hundreds of thousands of dollars to renovate each theater with new premium seating, is it worth it? A resounding yes. A small investment in this market research provided your business with the data it needed to feel comfortable with making this large-scale and “no-going-back” decision. Not only will the premium seating contribute more revenue to the theater, it will also increase traffic and spending within the mall property.

Research & Marketing Strategies, Inc. (RMS) is a market research firm that specializes in new product and new service feasibility studies like the case study you read above. If you are interested in discussing a market research project with us, please call our Business Development Director Sandy Baker at 1-866-567-5422 or through email at SandyB@RMSresults.com.