Organizations today operate in highly competitive business environments. This makes mitigating risks a major part of what organizations need to do for long term success. One effective way to do this is by using a market research firm. Market research firms specialize in gathering and analyzing data related to market trends, customer behavior, and competitor activities. This is invaluable data that supports organizations vested in making informed decisions and selecting the right places to use their resources. In this blog post, we will explore how using a market research firm is a key tool and everyday strategic risk mitigation.
Identify potential market opportunities
One way that market research can help organizations mitigate risk is by identifying potential market opportunities. By conducting research, organizations can gain insights into the needs and preferences of their target audience. This information can be used to develop new products or services that meet the needs of customers and differentiate the organization from its competitors. Identifying and capitalizing on market opportunities can help organizations mitigate the risk of being left behind in a competitive market.
Further, research firms can help you identify the best way to identify these opportunities. It might be through standard landscape survey studies or with more targeted product-specific research. Leveraging their expertise will help identify the best way to zero-in on those rich opportunities.
Assess the competitive landscape
Market research can also help organizations assess the competitive landscape. By understanding their competitors’ strengths and weaknesses, organizations can identify areas where they can compete effectively. For example, if a competitor is known for offering high-quality products at a premium price, an organization can differentiate itself by offering lower-priced products that still meet customer needs.
Competitive landscape studies usually come to life as competitive audits. That is, various aspects of each competitor are analyzed—product features, pricing, marketing spend, buyer journey—to understand the relative strengths and weaknesses. By assessing these components about their competitors, organizations can mitigate the risk of being outmaneuvered by their competitors.
Identify potential threats
Market research can also help organizations identify potential threats. By understanding the external factors that could impact their business, organizations can take proactive measures to mitigate risk. For example, if a market research firm identifies a trend indicating that a particular product or service is becoming less popular, an organization can take steps to pivot its strategy and diversify its offerings.
This process can come to life in many ways. Organizations can regularly survey or interview customers in their category to understand their needs, perceptions, and brand or product preferences. Another option is to regularly interview or survey churned customers. That is, customers that have stopped using your product or service. Both of these approaches let you get ahead of potential risks by identifying them early on, and mitigate the chance of being blindsided by competitors or other changes in the market.
Evaluate customer satisfaction
Market research can also help organizations evaluate customer satisfaction. By gathering feedback from customers, organizations can identify areas where they are excelling and areas where they need to improve. Addressing customer concerns can help organizations retain customers and prevent negative word-of-mouth. Additionally, by understanding what customers value, organizations can develop new products or services that meet their needs.
Customer satisfaction research can be as simple as using a Net Promoter Score (NPS) survey. This is a standard question that asks customers how likely they are to recommend the product or service to a colleague or fellow professional. When tracked over time, it’s an excellent way to keep your finger on the pulse of sentiment and get ahead of any negative sentiment drop offs. This is another area where interviewing churned customers is helpful. Understanding what lead to their dissatisfaction and ultimately their decisions to lead can give your insights into issues impacting customer delight. Having clear views into issues impacting satisfaction can help organizations mitigate major customer attrition issues that lead to unexpected revenue shortfalls.
Test new products or services
One way that organizations can mitigate risk is by testing new products or services before launching them. By conducting research to test the viability of a new product or service, organizations can identify potential issues before investing significant resources. For example, if a market research firm discovers that there is little demand for a new product, an organization can choose not to pursue it, saving time and money.
This is typically done by fielding product concept tests. By sharing product ideas with customers, which can be basic high-level comps or fully flushed ideas, organizations can measure overall appeal, product relevance, and intent to buy. Organizations can move forward with those product ideas that rank highly across all dimensions measured, letting them minimize the chance of using resources for products that may not have success.
Make informed decisions
Ultimately, market research can help organizations make informed decisions. By gathering and analyzing data, organizations can make decisions based on facts rather than assumptions. This can help organizations avoid costly mistakes and make strategic investments that will pay off in the long run.
For instance, it ensures that objective data is driving strategic decisions, rather than inputs just from senior executives or one-off events. Additionally, it can bring more nuanced perspectives that help organizations make more comprehensive decisions around products, pricing, marketing, and other key go-to-market decisions. Essentially, these holistic, informed decisions help organizations mitigate the risk of wasting resources on initiatives that are unlikely to succeed and prevent competitors from stepping ahead.
using a market research firm can help organizations mitigate risk in a number of ways. By identifying potential market opportunities, assessing the competitive landscape, identifying potential threats, evaluating customer satisfaction, testing new products or services, and making informed decisions, organizations can reduce the risk of failure and increase their chances of success. In today’s competitive business environment, mitigating risk is essential for organizations that want to stay ahead of the curve. By leveraging the expertise of a market research firm, organizations can gain the insights they need to make strategic decisions and achieve their business objectives.