It’s easy to get lost driving in an unfamiliar place. A navigation app helps, but only if it’s accurate. If you pick the wrong app, you’re still lost.
Market research is similar:
- It tells you where you are.
- It suggests ways to get where you want to go.
- But it has to be accurate.
Good research tells you where your business stands, and how to get where you want to go. Bad research misrepresents where you stand and points you in the wrong direction. But how can you tell good research from bad?
Here are five questions you should ask before buying research:
1. Is your research about the market you serve?
There’s an ocean of online data today. Most of it isn’t relevant to your market. National data is often average data, and average data is not meaningful locally. There’s an old saying about this: “If your feet are in the oven, and your head’s in the freezer, on average, you’re comfortable.” Make sure your research is gathered from local sources.
2. Does your research align with your internal information?
Of course, to answer this question, you have to have been gathering internal information in the first place. If you aren’t, now is a good time to start. For example, if you run a retail business, start by looking through your credit card receipts. What zip codes predominate? How many transactions do you process daily and which are your busiest days? What products or services do you sell most often, and when? What share of total receipts are credit card purchases? Gather and study the data and compare what you see with third-party research. If the two don’t correlate in significant ways, start asking questions.
3. Will the research be performed in a way that makes sense?
Good researchers answer your questions in clear, simple language. If you don’t understand an explanation, don’t be embarrassed. Continue asking until you do. If you can’t get a satisfactory explanation, it’s likely that you’re headed toward, you guessed it, bad research.
4. Is there a plan to make use of the research?
If it leads to profitable decisions, good research is priceless. Unfortunately, the file cabinets and shelves of businesses are littered with research reports that were never put to practical use. If you don’t have a plan to make use of the research you’re buying, you probably shouldn’t buy the research.
5. Does the research offer a view of the future?
Most research is a snapshot of the present. Research that defines a future business direction is more valuable. Perhaps you should consider research that repeats itself regularly, so you can measure the effects of your business decisions and refine your strategies over time. If research is not both forward-looking and actionable — if you can’t use the research results to make decisions — you probably shouldn’t buy it.
If you’re happy with the answers you get to these five questions, you may have a good research roadmap; but it might still not be worth buying! Good research is useless if you don’t share the information. Share your findings with key managers and employees. Solicit their reactions and suggestions. Hold an off-site meeting and engage your team in building strategies that leverage your new data. This will bring research to life and pay back your investment multi-fold. Finally, even good research goes stale. Economics change, competitors move in, product demands shift. It’s important to keep your research fresh and relevant.