Research Investment Pays Off in More Effective Marketing
Consider the company that decided to launch a new service, believing its existing clientele would readily buy it. The firm had a strong reputation and had been successful for a number of years. Its personnel understood the particular market and had accurately identified a need among current and potential clients. They believed there was little competition at the time. They had easy access to the decision-makers. It seemed so feasible, the company didn’t bother with research to verify their assumptions.
Had they taken the time to survey their clients, however, they would have learned that the clients’ internal staffs were threatened by the new service, fearing it could lead to staff cuts. Confused and mistrusting, the clients began to pull their business altogether. Although the company was able to attract some other clients to its new service, it lost a significant number of its longtime clients. Eventually, the company abandoned the new service and struggled to reeducate its customers about which business it was really in.
The story illustrates the pitfalls of skipping the research step, even for a company that had a longtime presence in the market, a solid client base and had identified a real market need. Research needn’t have been expensive. A few conversations with select clients would likely have yielded enough insight to give the company pause.
Although market research is a mainstay for retail and product based businesses and political campaigns, it should also be applied by service firms, trade and professional associations and even, perhaps especially, government agencies. No matter the type of business, effective marketing rests on accurate research, conducted prior to launching new services, products, locations or other initiatives.
In another example, a statewide trade association recognized its members had a need for a specific service that was tough to find and expensive when they were able to purchase it. The association leaders made plans to leap into the market, envisioning a potential profit center and a member recruiting tool. Before allocating a substantial budget toward a marketing campaign, however, they did their homework.
The association surveyed its market and confirmed its assumptions. The research showed that members would indeed buy the service and that nonmembers would join the association in order to buy the service. The research also told them that there was such tremendous interest they could easily scale back their marketing campaign. A wise move. Using only their member magazine and some direct mail to promote the new service, first-year sales far exceeded their expectations. By the second year, the association membership had more than doubled.
Simply defined, marketing is the effort of drawing potential buyers, supporters or users to a product or service. Research drives the marketing effort, by narrowing down the potential market segments, more clearly identifying the buyers’ needs and determining which communication channels are most direct and cost effective.
Lacking market intelligence, a marketing effort will be about as effective as a sales call to a disconnected telephone number. Prior to implementing any marketing strategy, basic questions should be answered. Who exactly is the target? What are the clients’ criteria for purchasing your service? To which communication channels do they pay attention? Without such information, a marketing strategy can easily fall flat.
Have clients’ or customers’ purchasing behaviors changed in recent years? Has new competition entered the industry? Has new technology caused your service to become out of date or not as desirable?
Few services sell simply on price, brand or location. For some, a sale may only be possible after a relationship has been established. In that case, direct mail is junk mail and social media is worthless chatter. The marketing strategy needs a relationship-building component designed to build credibility and trust over time.
For a service organization that deals with the internal affairs of its clientele, a marketing strategy may rest solely on cultivating referral sources. The consultant who gets the nod from a trusted referral source will get the job, rather than the consultant with the big advertising budget. Professional consultants—be they medical, legal or business management—should allocate few, if any, dollars to scatter-shot advertising.Resist the temptation to market haphazardly. There are a hundred ways to spend money marketing an organization; choose the few, based on solid research, that provide the greatest return on your marketing budget investment.
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Barbara Lezotte is a nationally accredited public relations counselor who specializes in corporate and crisis communication. She is president of Lezotte Miller Public Relations Inc. in Okemos.