Why is market research so important?

1. You probably don't know as much about your clients as you think.

2. Your clients are often swayed by strong forces that you don't know about.
These may be pressures from the market that your clients don't tell you about because they
don't think they have anything to do with your work.

3. You may know the trees inside and out, but you may not see the forest. When you're so
busy with your clients on a daily basis, it can be hard to see patterns.

4. It's possible that your current clients don't represent the market as a whole.
So, you might not notice an important trend.

5. It's easy to put off dealing with hard-to-solve problems when you're busy with day-to-day
client work. If you do good market research, it's hard to ignore these problems.

6. Research-based facts can change the way people work. Staff can easily get stuck in their
ways and refuse to change. But it's hard to argue with facts, and facts can be a powerful way
to cut through opinions and clear the way for change.

7. Market research can help you figure out what services to offer, how to offer them, and
when to do so. When you know about new issues and trends, it's often easier to figure out
what to do.

Is it really worth it to look into your clients and prospects?

This question comes up so often in our work that it has made us think about the problems it
brings up. Most of the time, it comes up during rebranding or market planning projects.

Your first step is to come up with a good plan. Building a business on a strategy that doesn't
work is like building a house on a cracked foundation. Not a good idea at all.

Try to see things from both the clients' and the outside market's points of view. That's why
interviews with employees, clients, and potential customers are so helpful.

Most worries centre on three main points.

1. "I know my clients already."

Even though most firms know quite a bit about their clients' businesses, they see those
businesses through their own eyes. This point of view is the "internal brand" of a company.
It's what they see when they look out into the world. From the outside, a company, or its
"external brand," often looks very different.
During our research, for example, when researchers asked a company to name their
competitors and then asked their clients and prospects the same question, found that the
two groups only agreed on about 20% of the time. So, professional services companies don't
know about 80% of their real competitors.

In a similar way, our research shows that about 65% of the time, a client admits that they
don't really know what services (besides the one they are using) their firm offers. Worse still,
more than 85% of the time, clients wish that their firm could offer services that they already
do.

2. "Don't make waves."

Will talking to them make them mad or bring up old problems? Even though this is a
reasonable worry, it doesn't turn out to be that big of a deal. If a client doesn't want to be
bothered, they won't take part in the study.

Researchers find that most clients are willing to work with us and are very honest. Most
people like being asked for their opinion, and the interview process usually makes the
company look good. And don't worry about losing a client because that never happens. The
interview is much more likely to show an existing need and lead to new business.

What if your clients work for the government? Many people think that their government
clients won't take part in research because they don't want to. Even though it's rare, there
are times when they can't take part in an interview. In reality, government clients act a lot like
clients in the private sector.

"What's the payback?"

Until recently, it was a leap of faith to put money into research. Researchers knew from
personal experience that systematic research led to better strategies and stronger
competitive advantages, but researchers had no way to prove it.

Setting goals for your research

Before you start your market research, you need to figure out what you want to get out of it.

For example, your company might be thinking about changing its approach to the market,
but the people who matter to it aren't yet sure it's a good idea. Research is a good way to
prove that the proposed change in strategy makes sense and get everyone on the same
page.

Research can also help you think of new ways your business could grow. What other
services would your clients like you to offer? What would they change about your business if
they could? Research can even help you find out what your real competitive edge is.
It's easy for a company's "wish list" of research to turn into a big, expensive project, so it's
important to set clear goals right away. Here are some real-world examples of research
goals that are very clear:
• To improve the way the company goes to market • To look for strategic market
opportunities • To develop new services • To give business development staff better training
• To find and profile top competitors

Before you start a costly research project, sit down with your management team and talk
about what you want to get out of it. Try to boil down your goals into one or more goals that
are easy to understand. Don't forget that the more goals you have, the harder, longer, and
more expensive your research project will be.
Once you know what you want to do, you can decide what kind of research will help you get
there. Which is what our next chapter is about.

How to Choose the Best Kind of Market Research

First, you have to figure out what you want to do. Will you do your own research, or will you
look for answers in existing research? Or will you do some of both? Let's look at what you
can do.
Method 1: First-hand research
Primary research means getting information from the source itself. For example, say your
business wants to add a new service to one it already offers and you need to come up with a
marketing plan. You could talk to people who might buy your new service in person or
through a survey tool to find out how likely they are to do so.
What it's good for: Primary market research can answer specific questions about your
business and your customers.
Method 2: Research that was already done

In secondary research, you look through already-done market research to find information
that is useful to your business. You could, for example, look at economic data to estimate
the size of a market, or you could look at market studies on buyer behavior1 to decide if it
makes sense to add a new service from a business point of view. Some secondary research
is free and open to the public, while other research can be bought. Why it's useful:
Secondary research is often used to guess how big a market is and how fast it is growing (or
shrinking). It rarely gives you the kind of information that would help you tailor a service or
give your company a competitive edge, though. For that kind of knowledge, you'll need to do
first-hand research.

Ways to do research
Whether you do primary or secondary research (or both), you need to decide which type of
research will answer your questions best. Here is a list of the most common types of
research and what they are best for:
• Research on a brand. It helps you figure out how people see you in the market and where
your best chances are.
• Research on a client. You'll find out what your clients and potential clients want and how to
give it to them.
• Study the market. Market research is a very broad field that can help you figure out who
your real competitors are, what services you should offer, what markets you should get into,
and more.
• Research on how happy clients are. How do your clients feel about your work and service?
Researching customer satisfaction will give you a full picture.

To get real insights, you need to dig deeper into people's lives and, ideally, talk to
professionals about their experiences.

• Study of the client journey. Find out in detail how people find your services, learn to trust
them, buy them, and use them. Use this information to smooth out the buying process,
increase the number of deals you close, and improve your service standards.
• Do research on client personas. Who buys your services or has an effect on the people
who make the final decision? What do you want them to know? Persona research will help
you find out who they are and what they like so that your marketing can be more effective.
• Research on your own. If you have specific needs, a research firm can design a custom
research study to answer any question you may have, from gathering information about your
competitors to surveying prices in your market.

Creating a plan for your research

Start by thinking about the most important problems you want to solve before you come up
with questions to ask your audience. To get a full picture of how your audience feels about
an issue, you may need to ask them more than one question from different points of view.
Don't add interesting but off-topic questions to your questionnaire if you want it to be a
reasonable length. The longer your survey or interview is, the less likely it is that people will
finish it.
Remember that who asks the questions can have a big impact on how well a market
research project goes. A skilled, objective, and unbiased interviewer is much more likely to
get to the truth than an inexperienced member of your staff. This is because an objective,
skilled, and unbiased interviewer is seen as more trustworthy.
Designing Your Questionnaire
You have to be careful about how you ask questions to avoid showing bias. If you are
thinking about a possible new service or industry market for your business, it is not always a
good idea to ask your target audience directly what they think about it. Instead, you might
want to ask more general, open-ended questions to get the information you need from your
audience.
Also, the order of your questions should make sense to both you and the person you're
interviewing. If a particular question is asked too early, it could influence responses to
subsequent questions. For example, you should ask a client why they were interested in
your firm before you ask them how happy they are with it. If you remind the respondent of
any bad (or good) experiences they had working with your company, it could affect their
answer.
It takes skill to make a valid and useful questionnaire. If you can, get the help of a
professional researcher who knows how to avoid the pitfalls and can make a tool that will
help you find the answers to your questions.

The 10 most important questions for growth and profit

researchers looked at the wide range of questions researchers asked when doing research
for our own professional services clients. Researchers paid special attention to questions
that could affect a company's growth and profitability. This list of the top 10 research
questions is what came out of that process.

1. Why do your best clients choose your company?

Researchers pay attention to the best clients, not the average ones. Knowing what great
clients like about your business can help you bring in more people like them.

2. What are these same clients trying to avoid?

This is the other side of the first question and gives an important point of view.
In real life, it's pretty important to avoid being ruled out in the early stages of a prospect's
selection process. The answer can also help you decide how to run your business and what
to do.

3.Who are your true rivals?

Most businesses aren't very good at figuring out who their real competitors are. When we
ask a company to list its competitors and then ask its clients to do the same, there is usually
less than 20% overlap between the two lists. Why? Sometimes, a company doesn't take
certain competitors seriously because it knows so much about its industry. Sometimes it's
because a company looks at a client's problems through their own lens and misses entirely
different types of solutions that the client may be thinking about. In either case, it rarely helps
to compete if you don't know who your real competitors are.

4. What do possible clients think their biggest problems are?

The answer to this question will help you figure out what is on the minds of potential clients
and how they are likely to talk about those things.
The point is that you may have services that can help organisations a lot, but they don't think
of you because they look at their problems in a different way. They may want to cut costs
when you offer to improve processes (which may, in fact, reduce cost). If you can't put the
pieces together, you'll miss the chance.

5. What is your company's real benefit?

Sure, you know what your services are meant to do for your clients.
But what exactly do they do? Firms are often surprised to find out that the real benefits of
their services aren't always what they thought they would be. When companies know what
their services are really worth, they can improve them or come up with new ones with
different benefits.
Getting Your Information

6.What new trends and problems are coming up?

Which way is the market going? Will it get bigger or shrink? In the future, what services
might be needed? This is a common topic for research in large industries that are driven by
the market, but it's surprisingly rare in professional services firms. Understanding new trends
can help you save money and spend it more wisely on marketing. Researchers seen many
companies add whole service lines, hire new people, and spend a lot of money on marketing
based on little more than hunches and random observations.

7. How well-known is your company?

What does your company stand out for? How good of a name do you have? How well do
people know who you are? Each of these questions can have a different answer in each
market. Not only can knowing where you stand help you plan your overall strategy, but it can
also have a big effect on how much you spend on marketing. If you know what your brand's
strengths and weaknesses are, you can figure out why it's doing well in one market segment
but not in another.
8. What is the best way to market to your main clients?
Wouldn't it be nice to know where your ideal customers go to get referrals and
recommendations? Wouldn't it be great to know how they want to be marketed to? You just
have to ask. If you want specific answers, make sure that is clear in the questions you ask.
How much should you charge for your services?
This is a big problem for many professional services companies. From what researchers
seen, most businesses overestimate how important price is when people decide to buy.
Maybe it's because firms are often told that price is the reason they didn't get the job. When
leaving feedback, it's the easiest thing for a buyer to say about this. If a company hires a
neutral third party to look into why it loses competitive bids, it often finds that what seems to
be price is actually a perceived level of expertise, a lack of attention to detail, or an
impression of not being responsive. Researchers have seen companies lose business
because their proposal had typos, but they blamed it on their fees.

10. What do your clients really think of you?

How likely are your clients to tell their friends about you? What about your business would
they change? How long do you think they will stay a client? These are the kinds of questions
that can help you improve your methods and get a better idea of what the future will bring. In
some cases, clients have shown us strengths they didn't know they had. In others, they've
found important security holes that need to be fixed.

Getting Your Information

How the data will be collected is also a very important part of the brand research process.
For many businesses that provide professional services, each client is different and has their
own unique problems. The best way to understand these points of view is one-on-one.
Focus groups can be useful for researching the market for a product, but groupthink can
make it hard to see the unique problems your clients are facing.
Phone interviews and online surveys are the most effective ways to find out what people
think. When you use both methods together, you can find a good balance between the
amount and quality of data.
Let's look at the pros and cons of using online surveys and in-depth interviews, which are
the two best ways to collect data for client and prospect research (IDIs).

Online Surveys

Surveys, which are now a common part of online life, are probably the most common type of
primary research done today. There are a lot of tools out there, from Survey Monkey to

Qualtrics, that make it easy to collect the data. It's about knowing what questions to ask,
what tools to use, and how to understand the answers.

Surveys are a good way to get a lot of people to give you information. They can tell you how
many people feel or act in a certain way or have a certain trait. They are a great way to get
statistical significance. But online surveys rarely give you the kind of subtle qualitative
information that an interview does, like the words a client used to describe their most
important problems.

You might want to look into other types of market research if you want to learn more.

Why are online surveys a good idea?

• Value for money. During the time when the data is being collected, there is some
maintenance and monitoring to do. But when compared to IDIs, online surveys are more
cost-effective because they can get more responses with less work.

• Time savings. Most of the time, people can finish an online survey faster than an IDI. Also,
it can be hard to find a time that works for both the interviewer and the person being
interviewed. When people fill out surveys online, they have the most freedom and
convenience. (Since they can be used in many ways, they are also easy to forget or ignore.)

• Larger sample sizes. If your business has 40,000 clients, it wouldn't make sense to talk to
even 2% of them. But it's easy to send out an online survey to everyone on your list. That
means you can get answers from a larger group of people who are more like the whole.
What are the bad things about online polls?

• There needs to be a push. Depending on the people you're talking to and how well they
know you, they may not want to take your survey if there's nothing in it for them. In some
cases, an incentive could be free, like letting someone see the results of your research
before anyone else. But in most cases, you have to use good old-fashioned bribery. Gift
cards to places like Starbucks, iTunes, or Amazon that are popular with a lot of people can
be good icebreakers.
• Non-completion. People who fill out online surveys don't always answer every single
question. People sometimes leave the survey before it's done. Several things affect the
number of people who finish a questionnaire, which is why it's important to make a good
one.

• Harder to get detail or explanation. Most survey respondents opt not to provide detailed,
descriptive responses. Because of this, open-ended questions usually don't lead to much
useful information. Instead, "select all that apply" questions can keep people interested and
reduce the number of people who drop out. Unfortunately, this makes it hard for people to
answer questions in their own words, so you can't tell the differences between people's
answers.

Interviews that go deep (IDIs)

Researchers have found that in-depth interviews are the best way to do exploratory research
when doing market research for professional services firms. Here are some common ways
to conduct an interview:

Face-to-face

Most of the time, professional services firms do better when they talk to representative
members of their audience one-on-one. Face-to-face interviews let you schedule meetings
with busy executives, who are often current or potential clients. You can also change your
interview questions to find out more about the answers and adapt to how people answer in
different situations. This method may be the best way for professional services firms to get
information.
Face-to-face interviews, on the other hand, have a few important downsides.
First of all, they are the most expensive to do. A skilled interviewer has to go to where the
client is, which could be anywhere. Also, the person being interviewed might not want to give
up the extra time that these kinds of interviews often take.

Phone & Video

Most companies find that phone or video interviews are a better alternative. They have some
of the same benefits as individual face-to-face interviews, but they cost a lot less.
A busy executive would much rather take a phone call than go to a meeting.
The interviewer's ability to read body language is the main thing that is lost in these types of
interviews. But if the people being interviewed are willing to use video tools like
GoToMeeting, Skype, Google Hangouts, or Zoom, this downside can also be lessened.
Discussion Groups
Gather a group of the people you want to sell to and ask them a series of questions. Voila!
You have a group of people who give you feedback. Focus groups are used a lot in
consumer product research because they are face-to-face (so you can watch body
language) and flexible (a skilled moderator can adapt to changing situations).
They can also cost less than one-on-one interviews because you are talking to more than
one person at once.
But focus groups have major problems that make them useless for most professional service
uses. First of all, it can be hard to get a group of executives in the same room, let alone get
them to talk about their business in front of their peers. Second, why bother, since most
professional services don't give people anything to look at? Lastly, group dynamics can
easily cloud the results. It's not uncommon for one person with a strong personality to have
an effect on the whole group. In the end, you might not even get answers that are honest.
Why are in-depth interviews a good idea?
• The ability to question people. If the interviewer is good, the person being interviewed will
give more detailed information than they might on a survey.
This benefit is especially helpful when you are working with a small sample size or a group
whose opinion is very important for deciding where your brand should go.
• Conversations that are real. When a third party does the interviews, most people feel more
comfortable saying what they really think and feel.
A skilled interviewer can make an IDI feel more like a conversation than a set of rigid
questions.

• Open-ended questions. When IDIs are used, the interviewer has the chance to pick up on
the nuances and natural language of the people being interviewed.
Also, the answers to open-ended questions might surprise you, giving you new information
about how your audience sees things.
• Being able to ask more questions. One rule for online surveys is that they can't have too
many questions. This doesn't matter as much for IDIs.
Often, people who are being interviewed are happy to go into more detail about an issue or
answer a lot of follow-up questions.
• More people answering. If you are persistent but patient when setting up interviews, you
can expect a much higher response rate for IDIs than for online surveys. In fact, it's not too
hard to guess how many people will respond and how long it will take to get all the data.
What do in-depth interviews have against them?
• Interviewer needs to be trained and have a lot of experience. The benefits of IDIs depend
on how much experience the interviewer has. An experienced interviewer will know when to
ask for more details, when to think back to answers from earlier in the interview that might be
relevant to questions later on, and when to take detailed but clear notes that can be used for
data processing and coding. To get the most out of your IDIs, you need all of these skills.
• Cost and time. There are many good reasons to hire an experienced interviewer to do the
interviews, but it can be an expensive investment. Also, setting up and finishing interviews
can take time.
• Sample sizes are small. You will have to settle for a small sample size unless you have a
lot of money to spend on interviews. Whether or not an IDI is the right method for you will
depend on your budget and the size of the population you are sampling from.