The Reasons Why Some Companies Are Successful, Even in Recessionary Times
The recently published RMB/BER Business Confidence Index report some 70% of South Africa’s executives to currently be unsatisfied with business conditions in the country. It is worthy to note that in the years 2004 to 2007, the satisfactory figure was 80%!
Since the Great Recession sword fell in late 2007/early 2008, business confidence has been trading in the red, without reprieve, for over nine years now!
But, if 70% of executives find business conditions unsatisfactory, then, by deduction 30% are finding conditions to be at least satisfactory. One does not have to look far to see that whilst many businesses are cutting back, retrenching, closing or generally reporting poor financial results, there are indeed some who are displaying unprecedented growth, expansion and profitability.
Why? What is it that differentiates successful companies from unsuccessful ones in these bleak trading conditions?
After careful consideration of qualitative factors differentiating successful and non-success, we postulate a set of conditions underlying business prosperity today.
Firstly, when the Great Recession dawned, many companies took the immediate response of cutting costs and improving efficiencies. The first response was to shed the fat that had accumulated in the previous boom time, and to exercise the muscles that had become complacent. Successful companies today continue this practice of cost and efficiency management.
Lean and fit companies are more competitive in these difficult times.
Unfortunately, many companies left it at that. Having trimmed back costs, and propped up efficiencies they had no real vision as to what to do next. Many relied on the marketing technique of “wishful thinking”.
Wishful thinking marketing is the practice of sitting back and wishing that customers will appear, as if by some magical force, and buy one’s product!
When it comes to marketing, companies need to replace the wishbone with a backbone.
Successful companies have managed to get over wishful thinking marketing, and found a solid foundation from which to take their business to the next level.
This foundation is the voice of the consumer (VOC).
Founding one’s business on the voice of the consumer ensures that products, processes and service delivery are guided and engineered by consumers’ needs.
The modern world provides a plethora of different ways to listen to the voice of the consumer, including:-
Observing customers behaviour,
Interacting with customers in the shopping environment,
Analysing purchase data,
Engaging the opinion of customer service staff,
Analysing social media commentary and blogs,
Developing customer communities and then both formally and informally interacting with them.
And, of course,
Formal market research surveys (both qualitative and quantitative)
But listening to the voice of the consumer is not enough. It is only the foundation.
Successful companies go on to gain a profound understanding of consumers’ needs both called for, or implied by, their voices, and then go on to innovate profitable solutions to these needs.
Such solutions present themselves as brands, products or services delivered through a variety of channels and purchase mechanisms. Of course this chain of value construction from new product development through to customer delivery is ultimately in the hands of the company’s employees.
Successful companies almost always characterised by having employees who are highly enthusiastic and strongly engaged with their jobs, their company and ultimately their company’s customers.
Characteristics of enthusiastic and engaged employees are kindness, optimism, a work ethic, empathy and integrity. One ought to look out for these personality traits in addition to, or even above, functional skills required by a staff member!
Upon this layer of enthusiastic and engaged employees, successful companies add yet another critical layer. That is, teamwork!
No man is an island, goes the old adage. Decisive product and service delivery relies on flawless mutual cooperation between the various functions in the organisation. Those companies who are structured into silos invariably fail at satisfy customers’ needs aptly.
Conversely, those that work together with the common purpose of satisfying customers’ needs, profitably are invariably successful.
Formal employee engagement research surveys and subsequent employee development interventions are an essential ingredient in developing enthusiastic engaged employees with a strong sense of teamwork and cooperation.
Finally, we have noticed that the world has evolved to a state of consumerism whereby instant purchase gratification and frictionless transacting are significant ingredients to a brand being a “favourite”.
Successful companies consistently are the ones who make it extremely easy to make the purchase! This is especially true of the up-and-coming so-called Millennial Generation.
In summary, you can use the following checklist for companies which are succeeding in these difficult times are those which:-
1. Restrain costs
2. Pursue efficiencies
3. Elude wishful thinking
4. Heed to the VOC (voice of the consumer)
5. Convert the VOC into needs
6. Invent ways to satisfy these needs
7. Grow enthusiastic and engaged staff
8. Cultivate teamwork
9. Provide frictionless transacting
As one can see, the fulcrum across which companies sway from unsuccessful to successful is heeding the voice of the consumer.
Formal qualitative and quantitative market research is a critical component of developing a strong consumer voice in one’s business.
Yet, market research is fraught with misunderstanding and mistrust. It is very easy to waste money and time when acquiring market research. Many companies report frustration and disappointment in this process.
Essential Tips to Procuring and Using Market Research
Over the past 30 years we have heard time and time again the worrying cry that market research purchased has ended up as a thick volume in the bottom drawer!
Sadly, our industry is beset by an ongoing, and common, obsession with providing panacea solutions and models to the marketplace. Market research vendors have often been guilty of pushing fad solutions into the marketplace. A bit like the diet industry!
Yet, we have also come across marketers and business leaders who have shown extremely high levels of success by constantly informing their decision-making with the voice of the consumer through both formal and informal market research. Some executives get it!
We spent some time reflecting on the difference between business decision-makers who are disappointed with the money they have wasted on market research and those who do not make a move without it.
In other words, what essential ingredients make for great research results!
Here goes …
Firstly, know exactly what it is that you want to find out. Research projects that are done to collect specific information work far better than projects where there is vagueness about what information to gather, and what to do with it thereafter.
We have often noticed that dissatisfied market research users have a tendency to fall victim to what we term the “vacuum cleaner approach” to market research.
That is, they succumb to the temptation to ask as many questions as they possibly can think of without refinement or focus to a specific decision at hand.
There is no doubt, that with market research, the rifle far out guns the shotgun.
Once you know for certain what you want to find out, resist the urge to specify the research method in your brief. Whilst you may have an opinion about the best research methods for the job, and you are entitled to have them, the research agency has vast experience in many types of research, in many different markets. Accordingly the research agency is usually best placed to identify the best methods for any job.
This is provided of course, that the research agency is not trying to sell you any “latest fad” methodology. Make sure that the research agency is able to demonstrate that the methodology recommended is tailor-made to the principal purpose of the research.
Think carefully about, and develop an instinct for when to use qualitative and when to use quantitative research. Many research undertakings require both.
In our years of providing research solutions, we have often come across the realisation that the purpose and difference between qualitative and quantitative research is generally ill understood, and even incorrectly taught at academic institutions.
Qualitative research tends to be open ended, creative, idea generating and evolutionary in nature. It normally comprises of “soft facts” and is hard pressed to be projected to represent any marketplace. It is excellent for generating ideas, uncovering hypotheses, developing problem solutions and developing and revealing consumer language for use in marketing communications and quantitative survey designs. Qualitative – of or concerned with the presence but not the quantity of a substance (Oxford dictionary).
Quantitative research tends to be closed ended, rational and numeric in nature with a key emphasis on measuring the appeal of ideas, confirming or denying hypotheses, estimating the most appropriate solution to a problem and any other aspect of the voice of the consumer that needs to be fixed statistically. Qualitative – of or concerned with quantity (Oxford dictionary).
Many research projects take longer to complete than originally planned. This is usually because of an underestimation of the time taken in the design phase of the project. Proper design of a project usually takes a fair amount of time, at least one third of the total duration of the project.
Accordingly, it is important to make sure that you have a thorough understanding of the project timeline, and that it is reasonable without compromising quality.
Get deeply involved in the design of discussion guides and questionnaires. The objectives of the research must be at the heart of the questions asked in the questionnaire. Make sure that you can see quite clearly exactly how the questions asked will achieve the project objectives.
The key to good research design is excellent attention to detail. Part of this detail lies in linking the questions to the primary purpose and objectives of the survey.
By keeping focused on the key purpose of the exercise, you will automatically avoid respondent fatigue. The longer the questionnaire, the less well considered the responses from interviewees. There is a definite trade-off between the duration of the questionnaire and the quality of information gathered in any questionnaire.
Be sure to not compromise vital questions by adding in too many that are merely nice to have.
Be concerned with, and ask questions about poor data collection quality. All forms of research methodology are at risk of this problem.
Focus groups are often plagued with “professional respondents” who are in attendance under false pretences merely for the money, and their contributions are invalid. They are nicknamed “groupies”. Clever recruitment crosschecking will catch out these frauds before they enter the focus group room.
Face-to-face interviews run the risk of being rendered invalid by cheating interviewers. Systematic, and cunning back checking and cross-referencing is essential to combat this problem.
Online interviews, especially those drawn from research panels, run the risk of providing shallow and even entirely incorrect responses from respondents who are not really interested in the survey at all, but are merely completing it for the sake of gaining points or some reward. Make sure that online interviews are drawn from databases where respondents are not part of a panel of professional interviewees.
Once the fieldwork has been successfully completed, and with good quality standards, it is always a good idea to get deeply involved in the specification of the analyses. There are so many ways to cross-tabulated and analyse market research data that there must be an analysis plan.
Specifically, the analysis plan needs to be guided by the primary purpose of the research.
Convene an analysis preview with your research agency to get consensus about how best to analyse the data in order to most aptly achieve the project objectives.
The best analyses in the world, delivered with the most aplomb, the finest infographics and most compelling storytelling will not achieve success for you unless the research findings have been distilled into a set of relevant and achievable action points. Research that does not get put to good use represents wasted investment in information
Research is an aid to judgement and is an important component of the marketing planning process.
Translating research findings into an activity plan and then implementing the activities is an essential step in getting value out of your investment in the information.
Traditionally, many companies spend their research budget on one or two huge surveys every year. This often yields disappointing results and an underachievement of expectations. Rather than one big shout, market research does better when used as knowledge building blocks in creating conversations with consumers.
Rather than one or two large research projects each year, deploy your research budget on many smaller projects that interlink and add learning sequentially from one to the other. The answers derived from any particular project, often lead to new questions requiring to be answered by research.
Market research, like military intelligence, is a vital strategic component of business and brand management. Accordingly, go for a strategic alignment with the research agency. It is impossible to really believe that your agency will add strategic value if they are also working for your competitors!
Further, an exclusively aligned research agency will get to know your business or brand extremely well and become pre-emptive and value adding in their services, as well as more agile and effective.
So, in summary, to successfully bring the voice of the consumer into your business and brand planning using market research, make sure that you use the following checklist:-
1. Know, and define, exactly what it is that you want to find out. The principal purpose and commensurate objectives of the research.
2. Resist the urge to specify the research method in your brief.
3. Make sure that the method is tailor-made to the principal purpose of the research.
4. Develop an instinct for when to use qualitative and when to use quantitative research.
5. Make sure that you have a thorough understanding of the project timeline.
6. Get deeply involved in the design of discussion guides and questionnaires. Be sure to avoid respondent fatigue.
7. Be concerned with, and ask questions about data collection quality.
8. Get deeply involved in the specification of the analyses.
9. Distil the research results into a set of relevant action points.
10. Use market research as conversational building blocks with consumers.
11. Go for an exclusive and strategic alignment with a research agency.
From this set of tips, one can easily see that the end outcome is inextricably linked to the first point – knowing and defining exactly what it is that you want to find out.
This can be more tricky in practice than in concept. Identifying a gap in one’s knowledge, is much more difficult than identifying what one already knows.
In the next video and article we will share with you an easy yet essential step-by-step recipe on how to develop a proper research brief. That is, one that will avoid many of the pitfalls outlined above, and dramatically increase your chances of creating the correct focus and achieving a research result that yields profitable business and brand plans.
Developing a Proper Research Brief
The heart of successful market research lies in a well thought through, clear and comprehensive research brief.
More often than not, research briefs can be paltry, inadequate, vague and lacking clarity of purpose and objectives in relation to the business or marketing issue at hand.
This makes it extremely difficult for the researcher to accurately tailor-make a methodology and solution that will be effective and provide value to the client.
Moreover, it creates the temptation for the researcher to simply plug-in a “latest fad” methodology.
A quality brief is the first step in achieving a quality research project.
In this video and article, we will share with you the vital ingredients required to craft a quality research brief.
Here goes …
To begin with, it is always a good idea to share the market backdrop with the research agency. That is, to provide a short description of pertinent past, current and anticipated issues relating to the market in which your company operates.
This gives context to the brief and provides a foundation for the subsequent brief.
Market research sometimes happens automatically, such as continuous tracking surveys. However, many projects are initiated because of a specific circumstance that has generated the need for research. It is a good idea, to go on to provide a short description of the background leading up to the need for research.
In other words, what are the circumstances that caused the need for the research in the first place?
And now for the DNA of the brief!
The purpose of the project. What is the main purpose of the research? In other words, what are you going to use the results of the research for?
Every business or brand planning scenario presents executives and strategists with information gaps. It is impossible to know everything.
But some information gaps are crucial to fill!
Clearly identifying such gaps will be the first step in outlining and defining the purpose of the project. From then on, the brief flows naturally.
From the project purpose comes the set of project objectives. This is best, and most easily, thought of as being the questions that you would like the research to answer? Here it is important to avoid the vacuum cleaner approach referred to in the previous video and article, but to rather define objectives within the bounds and borders of the purpose of the project.
In many instances, the information gaps identified present themselves in the form of root hypotheses. Quantitative research is especially good at confirming or denying hypotheses. If there are any root hypotheses to be proven or disproven, now is the time to state them in the brief. That is, along with the project objectives.
Now that we know where we are headed – the purpose, objectives and hypotheses – the next part of the brief goes on to the business of how we will get to this destination.
Whilst in the previous video and article we cautioned against specifying the research methods in the brief, it is quite okay to share any preconceptions you and your colleagues may have about the methodology.
Just make sure that they are preconceptions rather than prescriptions.
Then, be open-minded to what the research agency recommends in respect of methodology.
Some research projects need to take specific considerations into account. These specific considerations may relate to matters which could be legislative, company policy, logistics, ethics, confidentiality and so forth. Consider whether there are any specific issues that need to be taken into account in the specification and execution of the research. Then, include these in the brief.
It is a good idea to include in your brief a specification of the geographic location you wish to cover. Typically the geographic location will be defined by the places in which your primary research target market can be found.
It is often a good idea to adopt Pareto’s principle, and asked the question as to which 20% of your target market’s catchment area yields 80% of sales. Then, focus your research interviews in the primary catchment area.
Attempting to cover the entire catchment area will often have the effect of increasing the cost of the research. This is especially so in the case of personal interviews.
Naturally, it is vital to include a clear definition of the target market in the research brief. This boils down to defining the types of respondents to be included in the research. In addition, definable subsets, or segments, need to also be described where necessary.
Research programs invariably fit into a complex set of other, interdependent, business and marketing activities. It is most usual that research activities are upfront and early in the project plan. This means that research is very often time critical and has already been allocated a timeline on the critical path.
Be sure to include clear timing constraints in your brief. Let the agency know by when you expect, or desire, the final results of the research.
It is very often left up to the research agency to develop a quotation. As with any industry, they are many ways to skin a cat, some less expensive than others. If you have already set a budget aside, share this with the research agency in your brief. The sharing of budget constraints will save a lot of time and anguish in going back and forth negotiating price and project scope.
At very least, share your anticipated or desired price range with the research agency.
Lastly, it is a good idea to define the deliverables you require at the end of the project. This could include the types of reports, tables and presentations. It could also include things like the raw data for internal analysis. It could even go on to include business and brand planning workshops designed to translate the research into action.
Remember that these deliverables may have an impact on the price of the research.
Once you have concluded the construction of your research brief, and achieved agreement about its content from colleagues who will be using the research, share it with your research agency and field any questions they may have. Come to an agreement as to when to expect a proposal in response to your brief.
By developing a clear and comprehensive research brief, you are setting the foundation upon which a quality research project can be built.
In summary, you can use the following checklist fir quality research briefs:-
1. Share the market backdrop – a short description of past, current and anticipated issues relating to the market.
2. Provide a short description of the background circumstances leading up to the need for research.
3. Define the purpose of the project, specifically describing what the research results will be used for.
4. Develop a set of specific project objectives. In other words, the questions that the research should answer.
5. Identify and define any root hypotheses that need to be confirmed or denied by the research.
6. Share any preconceived methodologies in respect of executing the research. Remember to be open-minded to alternatives, however.
7. If applicable, table any specific issues that need to be taken into account in the specification and execution of the work.
8. Specify the geographic location to be covered by the research.
9. Provide a clear definition of the target market, including any sub segments to be included in the analysis.
10. State timing constraints and project critical path requirements.
11. If possible, include budget or anticipated price range.
12. Clearly define expected deliverables.
A strong research brief leads directly to strong research proposal.
To discuss this article or your business enhancement needs, contact Gordon on email@example.com