Importance Of Market Research For Marketing Strategy
Hindsight, they say, is 20/20.
Capably looking backwards with the clarity to see missed opportunities can be a great learning tool to both avoid the same pitfalls as well as better prepare moving forward.
This year has provided many learning opportunities for business leaders and academics to study into the foreseeable future. While no one knows how long the economy and COVID- related impacts will continue, the amount of lessons learned have already started.
The CMO Survey, whose mission is to collect and disseminate the opinions of top marketers in order to predict the future of the marketplace, track marketing excellence, and improve the value of marketing in firms and in society, surveyed almost 300 CMOs in conjunction with Deloitte, Duke University’s Fuqua School of Business, and the American Marketing Association. In the June 2020 Survey, they looked at how COVID created a need to rethink how marketing can engage and capture consumers. Many of these insights are continuing to be relevant as we struggle with supply chain issues and the rising costs in goods and services.
Moving forward and reviewing the September 2022 Survey, marketing research continues to play a significant role. Reviewing some of the findings, CMOs rate the quality of their internal marketing research at 4.2 on a 1 to 7 scale. Additionally, 72% of CMOs indicated that they include research as part of their budget. But the good news is that since 2017 the investment in marketing research has grown from 3.4% to 10.5% which translates into a 209% increase in research investment.
Consumer and Shopping Change All The Time
One topic area that was especially interesting was the fact that marketers had to pivot away from parts of their strategy without a lot of guidance or knowledge of potential outcomes. These pivots responded to the changes in consumer behavior shifts due to limited in-store buying opportunities and the proliferation of online shopping. Additionally, the use of partnerships to extend into new markets and build relationships slowed considerably. Resources were moved away from those initiatives to support digital and online efforts which provided crucial sales and performance numbers during the height of shelter-in-place mandates.
The 2022 report shows the biggest shift since 2020 is the investment in marketing analytics more specifically, the monitoring of online outlets by their target audiences. The proliferation of new channels such as TikTok and Instagram and the increase in online consumer behaviors since COVID, CMOs are keenly aware of the need to understand and engage their audiences on these platforms. “Spending on marketing analytics as a percentage of marketing budgets hit an all-time high at 8.9% and this trend is expected to continue over the next three years to reach 14.5%. This lift is impressive given spending on analytics has been flat at an average of 6% or so for a decade.” The takeaway from the CMOs surveyed is their companies are using these analytics to make marketing decisions for customer acquisition and consumer facing communication decisions. 48.9% reported they are leveraging the analytics including B2B and B2C sectors to make decisions regarding their customers. Consumer Services, Mining/Construction and Pharma/Biotech sectors are the leading in this movement..
Market Research and Strategy Creation Going Forward
The current economic and recent pandemic influences have caused a fast shift of consumer behaviors, leaving businesses needing to understand how behavior changes impact their products and services. These shifts are shuffling the priority order of what consumers value in a brand when making buying decisions. Along with the changes is a contraction of competition in some sectors where consumers are searching for new brands and options.
Even with some CMOs mentioning their intentions to increase market research, the expectation is that planned and existing research will undergo a healthy review. Among the areas market research should be used as companies are planning for the next year are the following:
Trust signals by target audiences – The expectation is that consumers will rely on trusted brands and services. This is an outcome of the heightened awareness of a corporation’s social responsibility, supply chains and how organizations treat employees. Consumers are expected to be more discerning in these areas.
Use and growth of social media – Companies will need to recognize and engage their audiences on social channels to both build trust but also to listen and respond to their targeted segments. Additionally, this is where the greatest access to new customers and options to grow the brand exist with new buyers. Those who responded in the survey spent an additional 12% to 23% of their marketing budget on social media efforts to retain and engage with new consumers.
Ecommerce and online access – Consumers have become more comfortable shopping online, leaving many companies to believe this will not change when COVID-related store restrictions disappear. The requirement is to understand and capitalize on digital marketing to inform and attract buyers who are now looking for online offers and new options to replace unavailable brands.
Know the value you deliver – Companies recognized they were unprepared for the impacts of the pandemic. A reset to pursue insights that provide guidance around newly prioritized areas is needed. This reset should revolve around the goal of understanding what loyal customers value in your product and brand. This will help build a strategy that will capitalize on those strengths and the attributes that are producing the desired outcomes.
Marketing organizations have been challenged unlike any time during the modern era due to the pandemic. Businesses need to consider creative solutions to unknowns, adapt quickly to changes, and consider unproven approaches to ensure they successfully connect with and respond to their audiences. As the CMO Survey indicates, Marketing leaders are glad they weathered the changes but will not be as unprepared for the next disruption.