Addressing the common reasons small businesses avoid the practice
Too expensive and exclusive?
Every business leader of every company conducts marketing research, even if they don’t realize it. When a boutique jewelry store owner posts on social media to ask her customers what new piece they’d like to see at her store, she’s conducting marketing research. Any customer satisfaction survey is a form of marketing research. What small business leaders seem to object to (or rather, never consider) is formalized, systematic research.
Many small businesses seem to believe such practices are reserved for global organizations with multi-million dollar marketing budgets. When marketing research is proposed to local or regional companies (which don’t routinely incorporate such practices into strategy) the conversations get pretty interesting. While there are many valid situation or time-based objections to systematic research, the general objections below need to be addressed.
"No, thank you" - the common objections
1. I know my business
The very notion of marketing research is that internal knowledge is lacking to properly address marketing challenges, so it’s not unusual for leaders to have a defensive reaction to research proposals by marketing managers or outside firms. Business owners do know their business better than anyone else, and no one wants to be seen as lacking knowledge about leading their company to success.
Yet this objection is a general misunderstanding of marketing research. The purpose of such action is to better understand connections between a business and its customers, market, or end-users. For more strategic decisions, marketing research can be a powerful first step to protect against bad investments. Neglecting this lever is partly why around 95% of project launches fail and the ten-year business survival rate is around one-third.
Just like no one knows a business better than the business owner, no one knows that business’s market better than the market.
2. Sounds like consulting to me
This is a similar objection to the previous one. While some small businesses embrace consulting services, others are lukewarm or cold toward it. The strategic nature of research projects can give the practice a consulting look or feel, but it does not equal consulting.
The chief deliverable of a consulting service is often an intangible value (e.g., advice based on knowledge and experience); in contrast, the chief deliverable of a marketing research study is a tangible good - the research. While there is often consulting to accompany survey findings (data can’t interpret itself), companies will need to evaluate the predicted ROI based on the value of the research findings.
3. That’s too complicated
Marketing leaders don’t need more complications in their life, they need more automation and streamlining. For those leaders who don’t have a history of leveraging marketing research, the practice may come across as complicated and unnecessary.
The fact is that like many other business practices, marketing research can be as simple or as complicated as you want it to be. As the more analytical side of marketing, one must respect the systems involved in research; yet, you don’t need deep pockets or a data scientist to get some sturdy customer/market insights to fuel growth.
In today’s economy, small businesses that want to stand out must use the right data, including objective data from the market. Doing so requires pro-activeness, not complexity.
4. I don’t see how I can evaluate return on investment with that kind of a service
This objection is quite understandable as business leaders have difficulty measuring return on investment for many marketing campaigns, known as marketing return on investment (mROI). Moreover, many research firms have difficulty demonstrating mROI in their services, compounding the issue further.
However, we do know that data is power and thus, valuable. For example, IBM and partner firms have estimated lost data records to be valued at $150 each. Corporations sue each other for hundreds of millions in intellectual property lawsuits. One of the fastest growing industries in the world - artificial intelligence - was $26 billion in market size in 2018.
So, what data is valuable to your business? What someone in Russia ate for breakfast yesterday is likely worth zero to you, but the criteria your target persona uses to choose between you and your competition when making purchases is likely very valuable.
Where the rubber meets the road for marketing research mROI is 1. information value and 2. whether that information is actioned properly. Good marketing research findings will be accurate, actionable, and highly pertinent to the client’s business challenge. Remember, even if research meets all those criteria, if it is not acted upon, then the mROI is zero.
When discussing a potential research project, make sure to evaluate the projected ability to affect other metrics (like sales conversion rate and customer acquisition cost) against the cost of conducting the research.
5. I can Google and self-research all that
The fact that the internet houses literally thousands of petabytes of information is not lost on the research field. If your only questions are basic or public knowledge, there is a good chance it won’t take a custom project to find the answers. Much of the information businesses really desire from their market, customers, and competitors cannot be “Googled”.
All organizations need to have channels for acquiring valuable information, from web searches to books, industry reports, and podcasts. Ultimately, the highest value information from a customer base or target market is not listed on a web page - you will need to uncover such insights directly.
Paint the target, save time and money
There are no silver bullets in marketing, and we won’t attempt to make research out to be one. For small business leaders, there are many valid price, topic, and resource-based reasons to reject marketing research initiatives - unfortunately, the entire practice is often dismissed out-of-hand due to misconceptions.
Rather than throwing the baby out with the bath water, we encourage small businesses to incorporate their market into their marketing strategy and survey relevant audiences to help tackle strategic challenges. Marketing research doesn’t have to be expensive or complicated, and can deliver strong mROI if actioned properly.
Business instincts and knowledge of one’s industry are powerful assets, but sometimes there’s no substitute for going straight to the source to uncover opportunities and avoid money-pits. Avoid research when it doesn’t help you gain profitability or save time and embrace it when it does.