There are many different methods and reasons to conduct market research. In this three-part series, we’ll explain the three different elements of market research: WHAT people do, HOW they do it, and WHY they do it. Each market research study can contain any combination of these. We’ll discuss how each element will work, and when they are appropriate to solve for your specific business problem.
When people think about market research, performance studies are often top-of-mind: the type of research most people have had personal experience with on both the client-side and as customers. Performance metrics measure the WHAT – past company performance and projections for future performance that are based on past outcomes. There are a variety of purposes for WHAT studies: performance elements can measure past success, act as a diagnostic tool for various business problems, and provide a general trajectory for future performance.
Performance studies ask the following types of questions:
Think of performance metrics as the first step: you can’t know where you’re going if you don’t know where you’ve been. Performance metrics provide context and foundation to all other elements of a market study – the how and the why. Performance elements can measure past success, act as a diagnostic tool for various business problems, and provide a general trajectory for future performance.
At SMS Research Advisors, we often have clients asking for market opportunity studies without fully exploring their place in the market – awareness, satisfaction, and loyalty from consumers. By understanding these aspects of your business, you can identify strengths and weakness, priorities, and areas of focus for future progress.
Performance elements have long been the bread and butter of market research for several reasons. Mainly, these metrics are fairly inexpensive to capture, readily understood by stakeholders, easy to track, and straightforward to implement.
However, as with each element, there are limitations. The biggest being they are based on a behavior that has already occurred, which assumes that any future projects must have the exact same environmental, emotional, and situational conditions. In other words, performance metrics describe only what has happened, but not how or why.
In part two, we’ll follow up on WHAT people do with HOW they do it.