The Gantry Group Building Business Through Research

Gantry Group Newsletter Issue No. 1, September 2001

Market Validation means researching your expected customer base to gather as much information as possible to help you project whether or not:

• Customers will want and pay for your offering.
• The customer base is large enough to build a sustainable business.
• Customers are ready for your offering.

Customer attitudes, hot-buttons, and pain points can be effectively captured in two ways – quantitatively and qualitatively. Qualitative and quantitative research often go hand in hand, one supplementing and supporting the other. A quantitative survey provides the numbers you need to back up qualitative insights. Using a quantitative approach (i.e. survey studies), a statistically valid sample of the target customer group can be surveyed to reach accurate reactions and conclusions regarding your marketing messages, positioning and value statements. In contrast, a qualitative approach let’s you establish an open dialog within a focus group setting of no more than 8 to 10 customers at a time. Focus groups, help you explore, distill and bound the top market needs and messages with a small sample of representative customers. The output of this qualitative research can effectively drive the quantitative research that will identify the best value for the most customers.

The Internet has already proven to be a highly versatile tool for market research data collection, capable of saving time and money compared with the more traditional telephone or manual methods. In 1999, major U.S. companies began to accept the Internet as a valid means for conducting marketing research. Since then, the market exploded.  Online surveys and focus groups provide a convenient method for companies to reach their target audience and participants, to quickly convey feedback and responses. With nearly 7 in 10 American workers now having access to the Internet at work, compared to less than 5 in 10 one year ago, the Internet is nearly as ubiquitous as the telephone but with a less invasive method of contact, and a more productive, convenient interface for respondent feedback.
 

Identifying the Voices

Knowing whose “voice” to target sounds simple – but it is often a complex task. While most people understand the fact that customer behavior is unique to individual market segments, customer voices also vary according to an individual’s role or position with a company. In most sales decision processes, more than one person is generally involved with or influences the purchasing decision. Each constituency brings their own needs and desires to the table. And therefore each must be carefully identified, profiled and tested to ensure that these nuances are understood and that the marketing message speaks to the entire table – and not one chair in particular. Not only does the market need to be properly segmented, but all facets of the “sales constituency” needs to be understood and profiled.

Once identified, the right people must be reached and motivated to participate in a market research study. A rapidly growing number of quality opt-in email lists and panels are now available that can be queried to extract the precise profile of the target customers to be tested. For example, you may wish to hear from CFOs in the utilities’ industry residing in companies with over 1,000 employees. Picking the right list or panel is absolutely essential to gaining quality insights that are representative of your target marketplace.
 

Capturing the Value Proposition

Empowered with direct communication with the customer/prospect, you can query each customer role group within target customers about the specific elements of your company and offering that connote value including brand and competitive awareness, positioning, differentiation, pricing, service, etc. Some immediate questions to be included in a primary market research study are:

• What are the immediate challenges, problems, and pain that your prospects must resolve?
• Does/can your offering address these challenges?
• Do prospects have a need for your offering? Is it an urgent need?
• Have prospects set aside an annual budget to tackle their challenges? How much?
• Which companies are prospects considering as the solution to their problem?
• Which vendor’s solution are prospects most likely to buy? Why?
• What are the top benefits that your offering brings to prospects?
• What is the criteria for purchase: brand, reputation/endorsement within the market sector, price?
• Are prospects aware of your company? Your offering? What does your brand connote?
• How do the prospects react to your positioning?
• What is your perceived competitive differentiation?
• How do prospects make the buying decision? What are the requirements and impediments to buying?
• How important is price in the buying decision? Customer care?
• Do prospects have a pricing model preference?

So why don’t more companies take advantage of primary research to test value? For the most part, companies feel they either can’t afford the time, the money, or forecast that their target audience would not cooperate in such research.

With the advent of online technology, participating in primary research has never been easier. Quality research can be conducted online over a two to three week period, with significantly higher response rates (than offline) and at a fraction of the cost.  With proper design of incentives and research endorsement, key decision makers will readily participate in on-line surveys and focus groups. In an hour, and without leaving their offices, a focus group of 8-10 members can explore in-depth, probing questions around your value package – and even brainstorm on recommended improvements. Looking at the survey participant’s vantage point, a 30-40 question survey can now be completed in less than 10 minutes with a few clicks of the mouse.
 

The Bottom-line Message

One of the advantages of the online venue is that primary research is automatically captured in real-time and electronically tabulated – ready at any time for analysis. Electronic transcripts resulting from online focus groups can be immediately analyzed to extract key concepts and phases. The statistical results of an online survey, captured electronically in a database for immediate cross-tabulation and analysis, reveal a prioritized set of unique customer needs, key value drivers, and buy-side predisposition. A participant’s company size, geography, and role group all contribute important subtleties to crafting effective marketing messages.

So far, market value proposition testing has seen greatest adoption by companies selling into the consumer market. Now, in the midst of down-sized or frozen corporate budgets, failed Internet ventures, and the realization that First Mover Advantage is NOT the primary ingredient needed for success in the New Economy, the business sector is turning to its customers to discover the “ready to be revealed” secrets of delivering true value. The Voice of the Customer is indeed the most formidable strategic weapon against both the competition and economy shell shock.

About Gantry Group:  Founded in 1997 and headquartered in Concord, MA, we are a full-service, custom market research and advisory firm dedicated to helping companies cost-effectively accelerate the successful market adoption of their products and services – online and offline.

Gantry Group can help your company understand the Voice of your Prospects and Customers to discover the optimal value proposition for your offering. Call Gantry Group to learn more about how we can quickly validate your market through a custom designed online primary research program.
 

The Gantry Group, LLC 30 Monument Square, Suite 135  Concord MA 01742

Phone: 978-371-7557 Fax:  978-287-0043 Email: info@gantrygroup.com Web: www.gantrygroup.com

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