Less than half of companies include market research in their marketing budgets. Furthermore, many organizations that do allocate a small portion of their budget, usually 10%, to market research are often quick to reduce budgets.
Why? Because unlike other forms of marketing where ROI is easy to quantify (e.g. you can measure exactly how many conversions came from an advertising campaign), market research is largely intangible and difficult to measure.
When confronted by the higher ups with requests for “tangible and positive ROI” numbers, here are some more convincing ways to show the true value of market research, and how it is integral to the health and growth of your company.
Explain how data translates into actionable insights
While data may not always translate directly into something measurable like clicks and conversions, when done correctly, it translates into actionable insights that save your company big bucks.
For example, imagine conducting a concept test that results in a smart decision not to innovate a current product, run an ad, or introduce a new product to the market that is predicted to fail.
To prove the value of this test, show how this market research saved your firm in terms of probable financial loss, brand damages, customer aversion, and more.
Need extra convincing? Just think of the shame that could have been prevented had Pepsi invested a little more into concept testing.
Show how research guides smart marketing decisions
Based on Fuel Cycle’s findings from The Future of Market Research report, 65% of market researchers measure success by the actions that are taken on their insights, while 20% say success means meeting research objectives. While researchers get personal satisfaction from meeting research objectives, when trying to showing stakeholders the true value of market research, show how research insights matched business objectives.
For example, consider the common business objective of increasing purchases. A recent client of Fuel Cycle conducted a study to determine which ad was more appealing to their target market. The results? Purchase likelihood was greater when images of family were included in the ad rather than just the product. As a result, campaign managers changed the ad and this company saw a measurable increase in customers after the campaign restructuring.
Stakeholders value market research when it provides valuable insights that help the company meet business objectives.
Show how research validates business decisions
Based on the same report, 87% of companies use market research to validate business decisions, and this research translates to success.
For example, have you ever heard of the company Burbn? No, right? Well, what about Instagram? Instagram was the result of a team of dedicated entrepreneurs at Burbn using market research to make key changes to their app.
After conducting and evaluating market research, Burbn scrapped several of their features, limited functionality, rebranded as Instagram, and the rest is a billion-dollar history.
Market research generates leads
This one is easy. 42% of B2B marketing professionals state that a lack of quality data is their biggest barrier to lead generation. Since this is true, all you have to do is show marketing professionals how you use data to generate more leads (think of retargeting, automating engagements, informed content creation, scheduled outreach, and more).
Market research captures the voice of the customer (VOC)
One of the most vital reasons for market research is to capture customer expectations, preferences, and aversions. Again, VOC data is difficult to quantify in terms of ROI, but understanding how your customer thinks, what they like, and what new features they would like to see is the perfect way to drive innovation, stay ahead of the competition, and, ultimately, grow revenue.
When determining the value of market research, take the time to see past the traditional number-oriented idea of ROI, and put together a more detailed report that shows how market research is positively influencing the future of your company.