A recent article in the MITSloan Management Review discusses how to raise your “market IQ”. I will summarize this article for you.
The authors argue that many market research efforts are misguided and create poor results because:
- They focus largely on current customers. The flaw in this approach is that you miss all your potential customers.
- They have a tendency to base strategy on what is publicly known, such as industry reports. The flaw in this approach is that decisions are made without executives understanding whether or not the data are truly applicable to their unique situation.
- They rely too heavily on qualitative research. Readers of this blog will know that I am a big fan of qualitative research. Nonetheless, these authors argue that the flaw in this approach is that you can’t get the insights you really need.
- They enable a pattern of taking a piecemeal approach. By this they mean too many uncoordinated market research efforts. The flaw in this approach is that the company doesn’t operate from a true database of knowledge.
I agree with their proposed solution – creating full-market panels – because we have successfully implemented these for our clients. A full-market panel means a set of online respondents that cover the full spectrum of customers and potential prospects within the markets you intend to serve. The advantages of these panels include:
- You can recognize needs and identify your most valuable customers more easily. By designing the panel to include non-customers, you can identify why you are losing, or not reaching key customers.
- You can examine where you stand against competitors – overall and in detail. You can begin to examine sources of erosion in your customer base vs. your competitors.
- You can better see where the market is headed. By examining trend data, you can begin to see – much earlier than otherwise, where the market is heading. This can give you a huge advantage over your competitors and first-mover advantage with new products and new market segments.
- You can more precisely track your performance. The first panel provides a baseline of information and over time, you can watch the change in your performance within specific target segments and/or with specific products.
Have you run full-market panels? What advantages and disadvantages do you see in this approach?