Is the market research industry recession-proof? Ray Poynter thinks it’s not. He says, “I have been blogging, reading Tweeting, and engaging in online discussions to try and estimate where research is heading, and I think the story is depressing.”
Mr. Poynter goes on to say that the only reason Market Research has been doing OK so far despite the recession is that companies are still using what’s left of their budget, but this will dry up in April; and that companies are cutting the heaviest expenses first and have not yet reached the stage of cutting smaller expenses such as market research.
I disagree, especially when it comes to Market Research for technology companies. In the sub-market of companies who sell to corporate IT, we’re seeing a very different trend:
- Market Research can be a huge cost saver. Instead of spending $250K on a marketing program, our clients see the value of spending $20K on message validation so they can spend $150K on a marketing program that delivers four times the results of the more expensive one – because the messages are hitting exactly the right buttons. I just completed a message test that included evaluating four possible lead benefits. We found that three of the benefits were incredibly compelling to all audiences, but to 3 out of 4 of our target segments the fourth benefit was actually off-putting and offensive. Just by deleting that one “bad” bullet from outbound programs their click-through rate on emails went from .5% to 2.0 %.
- It is now more important than ever to stay close to customers and build customer loyalty. A Customer Advisory Board clearly shows the participating customers that their voice is being heard – an important factor in instilling loyalty. Done right, it also gathers key information to ensure every functional area of your company is acting in a way that increases customer loyalty – from the product itself to messages from the marketing team, service offerings and ideas for improved support. In a recent customer advisory meeting we ran, the customers came up with a way to administer licenses that was more convenient for the customer and less expensive for the vendor – a win for all groups. Customer Advisory Boards can increase customer loyalty and drive more business to your company, even during the toughest times.
- During a recession, ROI is more important than ever. Prospective customers with tight budgets need credible and unbiased information on your products before they buy them. You will need to give your sales team reliable, third party validation of ROI. Turning that ROI into collateral to prove ROI to prospects is highly valuable. And, technology companies have the unique option of getting more for their buck by combining the market research and collateral budget items.
As Mr. Poynter says, “I have been in this industry for 30 years, and I have seen plenty of people lose their jobs and companies go bust. But I have also seen some companies do well, under any circumstances. Some research companies will grow, despite the next two years.” I believe that technology market research companies are in an excellent position to not only survive the recession, but to grow and flourish despite the rough economy.