Today’s volatile, uncertain, complex, and ambiguous business environment challenges business leaders to define and execute a successful strategy for their company. Making well-informed decisions in a timely manner is critical to a company’s success. Primary research can give companies an information advantage by providing a crucial fact base to make the right decisions at the right time when defining, validating, or adjusting their business strategy. Through our strategy work with clients, we have identified seven advantages to including primary research as part of the strategy process.
1. Understand nascent markets and identify new opportunities
Primary research provides valuable information from customers, experts, and competitors to help business leaders understand nascent, new, or sparsely covered markets. Publicly available information is often insufficient or detailed enough for business leaders to understand the size of particular niche markets or submarkets. Primary research can provide data to fill the gaps and estimate the company’s market size and associated opportunities. For example, surveying Intent to Purchase and Willingness to Pay enables business leaders to make more informed decisions based on the attractiveness of a market or opportunity. Additionally, the research can shed light on customer preferences, including product, brand, service delivery, and channel, to inform the go-to-market strategy of a new potential offering. It can also help a company identify opportunities before competitors, providing a first-mover advantage.
2. Identify key purchasing criteria (KPC) and understand what customers truly think of the product, service, or brand
Primary research can help companies to understand what truly matters to current and prospective customers by getting their direct input. This input can help business leaders to crystalize key purchasing criteria (KPC) and set the right priorities for their product and service offering and go-to-market strategy. Furthermore, companies can capture their customers’ unfiltered perception of their product, service, and brand to understand customer sentiment and adjust accordingly.
3. Create meaningful and actionable customer segments
Primary research can be an effective tool for customer segmentation. Companies can use surveys to capture criteria such as customer needs, behaviours, product and service preferences, channel preferences, lifestyle, and demographic factors. With this information, they can split the market into meaningful and actionable customer segments. They can also understand the differences and nuances of each customer segment and filter out what is and what isn’t important to each segment. Ultimately, research allows companies to target the most attractive customers with the best-suited offering and messaging through the most effective channels, leading to increased revenue at lower customer acquisition costs.
4. Benchmark the company’s quality, service, and value performance based on the customer’s perspective to understand true differentiators
Customer surveys and interviews allow companies to benchmark their performance against their competitors regarding quality, service delivery, and value from the customer’s perspective. Primary research can ask current customers why they have chosen the company’s offering over a competitor’s and ask lapsed or competitor customers why they have chosen a competitor’s offering instead. This unfiltered customer feedback can often correct unfounded assumptions and dispel myths that leadership may have about what truly differentiates a company’s products or services from its competitors. By understanding what draws in new customers, the company can fine-tune its offering and align its differentiators to its core strengths. Benchmarking against competition is key to developing a more competitive offering and strengthening the company’s competitive position in the market.
5. Gain first-hand insights into how competitors operate through mystery shopping
Companies can gain first-hand insights into their competitors’ operations through primary research tools like mystery shopping. The “simulated” real-life customer experience can probe multiple channels, product lines, and overall service delivery. Companies can learn and adopt best practices from their competitors or best-in-class players in adjacent industries to increase competitiveness and understand the most successful elements of their go-to-market strategy.
6. Pressure test hypothesis of big strategic bets
A significant element of crafting a successful strategy is developing strategic hypotheses, proving or disproving them with data, and making the right decisions based on those learnings. Primary research is the most valuable data source to test strategy hypotheses because companies can base their tests on data from actual customers, competitors, and experts. Internal data and secondary sources are a cost-effective way to craft and prioritize an initial broader set of hypotheses. However, testing hypotheses with actual customer data will significantly improve understanding and the likelihood of success. The bigger the bet, the more valuable primary research is to support the strategy process.
7. Prioritize future capital investments
Data from customers, competitors, and experts can support companies in prioritizing future capital investments. For example, insights on customer needs, product performance, new opportunities, and pricing perception can inform important trade-off decisions within the current and future product portfolio. Furthermore, companies can use primary research findings to continually validate and adjust capital plans to ensure they are addressing evolving customer needs.
Primary research is a powerful tool for companies when developing, validating, or adjusting their strategy. Taking the right approach and facilitation is essential to extract the most value possible. Companies must understand their research needs and reflect them in their overall approach. Furthermore, it is important to tie the research effort closely to other strategic planning initiatives. Lastly, turning insights into plans and plans into actions are crucial steps to develop and execute a successful strategy.
Burnie Group has extensive experience conducting primary research and supporting clients to craft and execute their corporate strategy. Reach out to us to find out more about our primary research and strategy offerings.