Market Research: Have I Got Views For You

Market research is very expensive and desirable. But is it a valid means of projection or simply a costly ego massage? Annie Gurton reports

Market research has a crucial role to play in sales and marketing decision-making, but it?s vital to take a critical view of the data it delivers. As Tim Harman, international programmes director of Meta Group, says: ?Anyone can always find statistics and surveys to support their point of view. ?

Nevertheless, it is commercial suicide to ignore market research and to plan a business strategy without it. Richard Ryan, a director at Revelation Research, says achieving good research data requires an assertive approach to managing the research agency, otherwise the information obtained can be worthless.

?It is part of our responsibility to guide our clients and advise them,? he says. ?Few clients come through the door knowing exactly what they want and the best way to get it. ?

Revelation spends considerable time on the briefing phase so that it understands the big issues at the heart of a client?s business and its expectations. ?Sometimes they are not immediately apparent,? Ryan says. It is also important to match the methodology to particular clients? needs, and, most crucially, to undertake thorough and appropriate analysis.

?Each client gets different deliverables,? says Ryan, ?but there is usually an extensive written report which we present in person so a client can ask questions and we can make recommendations. We like to add value to the market research we undertake by adding intelligent and independent suggestions about how the company should use the material. ?

Harman points out that some market research is more valuable than the rest. ?Anything put out by the vendors which supports their position has very little credibility, and anything which takes a view on future market and company developments is questionable,? he says.

?It is one thing to take market figures and produce a snapshot of the current situation and determine who are the market leaders, but it is quite another to extrapolate that into projections about the way markets will develop. I am always sceptical about surveys which deduce that this technology or that product is going to achieve so many sales or that technology is going to dominate. We just don?t know, ? Harman states.

Who, for example, could have anticipated Informix?s current position a year ago? ?If resellers had made strategic decisions based on the assumptions which were being put about a year ago regarding Informix they would be in serious trouble now,? says Harman.

But he maintains that market research which draws on recent sales and factual information and then paints a picture of the current situation can be relied on ? although the value of the information still depends on how it is interpreted.

Phil Benge, sales and marketing director of Reflex Magnetics, is sceptical about market research accuracy: ?Many people who come up with market research data are just cherry-picking to support their position, or reinforce decisions which they have already made.?

But he admits that market research is important in validating strategic sales and marketing decisions: ?I would say that you should depend on intuition first and market research second. It would be foolish to build a whole strategy around market research findings.?

Harman agrees: ?Much market research, particularly figures which relate to expectations about the way markets are going to evolve, are tainted. It?s like going into a court of law: there may be expert witnesses, but they have been selected to put a particular slant on things.?

He says he has seen resellers base entire business plans on market research material that is fundamentally flawed, perhaps because it was commissioned with the purpose of delivering a required result.

?Some resellers regard market research as a bible, and it isn?t,? he says. ?It shouldn?t be taken too seriously. You have to come to a balanced conclusion that takes account of input from other sources, such as industry experience and intuition.?

The consensus is that qualitative research is more valuable that quantitative. In other words, it is better to interview 50 candidates properly than 500 ineffectively, although Harman adds that ?it is best to have a balance of the two?.

Katie Wilkins of Romtec agrees that market research delivered by an agency which seeks only to deliver what the client wants to hear has little value. She says: ?The Computer Software & Services Association has produced guidelines which ensure that clients are aware of the pitfalls of unscrupulous or unprofessional market research agencies, and there are plenty of those around.?

The guidelines also suggest how to undertake research without an agency. But, ultimately, they suggest that expert help, for example in designing the questionnaire, is invaluable and can save a lot of time.

Wilkins says: ?A lot of companies are tempted to use their own staff for doing research, but a good telephone researcher has sophisticated skills to get the right person and ask the right questions which elicit the most accurate response in the shortest time ? it?s not a job for amateurs.

?A major reason for calling in the experts is that computing is one of the most over-researched markets and hence the approach must be expertly designed and executed if accurate and worthwhile results are to be obtained.?

Ultimately, market research only has value when the findings can be used to win competitive advantage. ?Knowing what to do with your market research findings when you have them is key,? says Wilkins.

Getting value out of market research requires changing the way your business is focused or the way it operates. ?Some people commission market research without being prepared to make the necessary changes at the end,? she says.

Rob Musson, product manager at Professional Display Systems (PDS), agrees that there is no point undertaking market research without being prepared to act on it. ?It does not always tell you what you want to know, but you still have to swallow the truth,? he says.

For example, says Musson, research has shown him that far higher numbers of users are moving to Windows NT 4 than expected, but unless resellers train their staff to sell and support NT 4, that knowledge has no value.

?We are making our plans for 1998 now, based partly on what we think, partly on what our customers tell us, and partly on market research which we have gleaned from a variety of sources,? says Musson. ?You have to be eclectic and gather from a wide range of sources, certainly not just one report which you have paid for ? there has to be a balanced view. But with research results under your belt, and in tandem with other information, market research is essential. ?