Research As a Road to ProfitBy
Nancy Harlow Irwin
Traditional thinking in the corporate world often places market research on the "expense" side of the ledger -- or worse, research is seen as a costly, time-consuming barrier to program activation.
"What any executive really wants to know is, 'How is research going to make me money?' Sometimes, the path between market intelligence and the bottom line is murky, so they just see research as that added expense falling into an already large marketing budget," noted Kurt Graves, a former CEO and now Group Chair at Vistage International, a leading executive leadership group.
We understand executive push back. But we have legions of examples where research directly helps companies make money. We also see the corollaries - when research saves firms from enormous expenditures on efforts that will fail, or when the lack of research costs a company thousands if not millions in a failed market launch.
For example, in a recent product launch in the home products category, we tested general purchase intent for a new product, and then tested purchase intent driven by a creative campaign. The product scored very well - with 85% intent to purchase going into the campaign. The television creative itself boosted the intent to purchase into the 90% range and set a new benchmark for the entire product category.
The client launched the product with a $5 million television budget, and the company saw a 900% sales increase - well over their predicted benchmark of 300%.. More than that, the product received prominent shelf placement in stores such as Target and Walmart because the company could show research data to its channel partners, who in turn responded with a high degree of store support, placement, and larger product orders. Days after the launch, channel partners reported having trouble stocking store shelves fast enough.
In short, the predictive power of research pushed this product launch into the stratosphere.
Research can also be a road to savings.
When executives do the "executive thing" and ask questions like "how is research going to help my bottom line" we don't' flinch.
Sometimes, researchers can move the sales needle, as in our last blog about how research can drive profit. But sometimes, we're like lawyers - how much would the trouble we just kept you out of have cost your company? We can point to a lot of examples where research can save companies from expensive failures.
In one project dealing with shades and blinds sold in two big-box retailers, we saved a company hundreds of thousands of dollars by using research to kill off a poorly designed merchandising concept.
Company product managers were looking for a merchandising solution that would support customers' needs to see, touch, feel and take home material samples for shades. Company designers mocked up a large, handsome kiosk with material samples displayed and take-home samples neatly stored in small drawers. The design center was eye-catching and well branded.
But in testing the kiosk in focus groups revealed its fatal flaws. Group participants stood in front of the kiosk for several minutes trying to figure out how it was organized, and what it offered. Several were hesitant to approach the display at all. Savvy shoppers pointed out that in short order, the drawers holding the fabric samples would become a mess. Participants were confused about what to do with the samples, noting they felt they would need permission from a sales associate before selecting samples to take home. In general, shoppers felt the kiosk did very little to communicate about itself and how best to use it. Shoppers rightly pointed out that the whole concept would be best informed by a digital interactive display or online information and ordering center - a great idea but one that would make the entire display even more costly than ever.
In all, it was clear this merchandising concept was not ready for prime time and would need a great deal of refinement. The client left with the idea that a digital center might be cheaper, less labor intensive, and more supportive of shoppers needs. This project did not move forward, but the consumer feedback helped the company re-think how best to serve shoppers in their purchase process.
A bad idea met a good end and a major chunk of marketing budget was saved for a better cause.
Engage Voccii for research and strategy that moves the needle on results that matter. http://www.voccii.com 704-541-4952
Article Source: http://EzineArticles.com
Copyright © 2014 Nancy Harlow Irwin All Rights Reserved
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