Every quarter, Frank Lynn & Associates conducts a channel-marketing
workshop for sales and marketing managers from many different types of
companies. Many--even large Fortune 1000 companies--do not use formal
customer research as a strategic marketing tool.
Every quarter, Frank Lynn & Associates conducts a channel-marketing
workshop for sales and marketing managers from many different types of
companies. Many--even large Fortune 1000 companies--do not use formal
customer research as a strategic marketing tool.Some of their main excuses include:
"Sales people talk to customers all the time. They bring a lot of customer insight."
"Customer research is done for product development, and that isn't a constant need."
Internally,
the discretionary annual marketing budget leans toward marketing
communications, like new literature campaigns, mailings, etc. to drive
growth."
Smart Business
interviewed Jeanne Fec, Senior Principal of Frank Lynn & Associates
Inc., to learn more about using formal customer research to optimize
investments in new products and drive growth in sales and market share.What about using the sales force for research? Aren't they the critical interface between a company and their customers?The
sales force is one of the biggest investments a company makes, and it
can be used as a "conduit" to understanding customer sentiment. This is
important. But there are two problematic issues in gathering customer
insight from the company sales force.How do typical sales
people spend their time? If they are good account managers, it is with
existing, high-value customers. Here is the gap. How do we learn from
those outside the sales force's circle of presence? Companies that
consistently maintain double-digit growth make it a point to learn and
act upon perceptions, purchasing behaviors and expectations of
prospective and low-profile customers.Then there is focus and
motivation. Sales people are trained and paid to sell. It is a
challenge to get reliable and effective market research from
salespeople. A formal customer research effort more effectively
delivers unbiased data. Customers will also note the extra effort taken
to understand their perspective.Are there additional reasons to use consistent customer or non-customer research?Research
and development is another big investment that market research can
optimize. Numerous companies fail to include external customer research
in the product development process.Engineering-driven
organizations are especially vulnerable here. Great ideas are put into
motion because they seem to solve problems or outstrip the competition
on design and capabilities.Successful marketing strategies must
also take into account the size, sensitivity and buying behavior of
target end-user segments. This is a step best filled with regular
collection of insight from those customers. But we still have clients
come to us regularly with great products, seeking a market to buy them.End-user
research can effectively and efficiently answer critical acceptance
questions before a more significant investment is made. These basic
questions can be incorporated into a research methodology that can be
conducted in person, over the phone or via questionnaire.Give us some examples of key research questions.Certainly. Let's continue with our example of a new technology product being prepared for a launch.Technology:
Does the technology meet the customer's needs or solve the problem? Is
it perceived to be robust enough? Or overkill for the existing
situation?Economics: Are
the benefits greater than the cost? Developing an actual selling price
is a challenge in any research methodology, but good research can
define a value-based price range in the mind of the customer.Timing:
Are prospective customers capable and willing to make a purchase in the
short term? Asking questions about purchase cycles, budgets, approval
processes, centralized versus decentralized buying behaviors, and other
timing questions will help gauge opportunity forecasts.Environment:
Research questions can assist in understanding behaviors that have a
high impact on success. For example, you can test the customer's
internal environment, which means the customer's level of
sophistication and readiness to adopt the new technology. It is also
critical to understand the customer's external environment, such as
alliances with competitors or previous negative experiences. In the
overall scheme of things, this type of research investment is small
relative to the cost of R&D and product development.We've
talked about customer satisfaction research, new customer access and
new product research. Are there other ways that research helps
companies grow?Good research has proven to help companies
maintain current share, grow within their customer base, and
strategically grow outside of it. There is one additional benefit
research can deliver. Customer research can tell us how to raise the
bar. It informs us about unmet needs, or identifies unique benefits
that competitors do not deliver.
Jeanne Fec, is a Principal of Frank Lynn & Associates, and the Managing Director of Insight Research, a market research division of the company. She has been with the firm for 24 years.Frank Lynn & Associates is a global marketing and strategy consulting firm offering channel marketing, customer and market segmentation, B2B brand strategy and sales force effectiveness consulting services.
