Tag Archive for: market research

The Importance of Strategy

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A strategy is a method or a plan chosen to arrive at a desired future, such as the achievement of a goal or solution to a problem. A business strategy (on the other hand) is the firm’s working plan for achieving its vision and deliver value that customers are willing to pay for. In other words, a strategic framework focuses the company’s direction, ensuring resources and existing capabilities are used efficiently to achieve relevant objectives.

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Why is it important?

Your strategy determines your company’s high-level direction, driving all internal decisions.   Investment, hiring, development, etc. decisions will be made in accordance with corporate strategy. It enables cohesive planning and decision making throughout the organisation, advancing common objectives.

An efficient strategy ensures business growth, the establishment and maintenance of a strong competitive position, as well as strong financial performance.

Hence, the absence of a strategic framework guiding and aligning lower-level decision-making, will result in different departments pursuing individual trajectories, wasting resources, time and money in the long-run.

Make sure you come up with a crystal-clear strategy and communicate it to lower-level decision makers.

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Planning

The choice of objectives is at the heart of the strategising process, but an effective strategy also clearly outlines how the firm will meet these objectives. How will the strategy be implemented? This is planning. You should consider questions such as:

  • how does the firm differentiate itself from competitors?
  • what type of distribution facilities can it best take advantage of?
  • how are revenues generated?

The planning process is a challenging one, as both the company’s market strengths and weaknesses have to be considered.

Make sure your plan is relevant, realistic, and suits the market you’re playing in.

A clear set of goals, when combined with an honest appraisal of an organisation’s strengths and weaknesses, will reveal relevant and actionable opportunities within the current environment.

Source: Building the Business Case, Forbes: The Importance of Strategic Focus, Forbes: What the Heck Is A Strategy Anyway?

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Customer Insights Made Easy

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Uncovering things you might not know about your business.

Market research, and more importantly, customer insights are extremely helpful in understanding what your business does well and not so well, comparatively in the market. Whether you’re a café owner looking for other avenues for income or a construction company looking to find out why customers are choosing the bloke across the road, getting to know your customers and their motivations can be an integral part of uncovering why your customers like what they like, or do what they do. At the end of the day, the customers are what define a business!

Let’s take a step back and think about it for a second. Customers are just like you and me, a fellow homo sapien. Now, you and I like certain things, do things a certain way, crave particular food items now and then and so on. Now picture your typical customer (profile) and imagine what it would be like to buy from your own business, for example:

  • Was it done quickly?
  • Did I spend too much money for what I was getting?
  • Was the quality of the product/service any good?
  • Was the service up to scratch?
  • Did I offer enough (or too much) choice?

These are some of things that customers (also both you and I) objectively and subjectively use to judge whether or not we buy again from a business.

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But wait, that’s too hard.

Honestly, it really can be daunting for a small business owner and it’s why we have devised a little cheat sheet on how you can get started without the hassle of not knowing what to do in the first place!

We firmly believe that you don’t need complicated statistical software and algorithms to get started, on, what is traditionally, a very academic field of work, market research. Just sit down and use this example guideline to start on your journey of self-discovery.

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Matching expectations with reality.

When starting for the first time, we encourage businesses to brainstorm what are the key criteria that your business’ life depends on. These are the things, when done collectively poorly, ruin a business and likewise, when done collectively well, flourish. All businesses usually sit within this spectrum.

Here, we limit it to five criteria, so that there isn’t an overwhelming list our brains can’t handle. It also keeps our minds focused on what matters the most.

For example, the five criteria we can look at are:

  • On-time delivery
  • Value for money
  • Quality of products and/or services
  • Customer service
  • Range of products and/or services

While it’s not an exhaustive list, depending on the business, some criteria may be different. Say you’re a hairdresser and “on-time delivery” doesn’t apply, something else may be more relevant.

 

PRO TIP
Try and choose criteria that encompasses the entire business as a single unit to start, then you can branch off into examining other arms of the business once you’ve wrapped your head around the bigger picture.

 

Part 1 | Mapping customers’ expectations

Once you’re done thinking about what areas of the business are important to its survival, now is the time to ask your existing customers to rank them 1-5 by importance to them when dealing with you, where 5 is most important and 1 is least important.

Here, we’re looking to find out what your customers expect of you and determining what matters the most to them. For example, maybe a customer values your quality products (gave a score 5) but price isn’t what matters when buying from you (gave a score 2). There are countless insights you can gain from simply asking customers to rank the importance they place on certain aspects of your business.

Part 2 | A reality check

Using the same criteria you’ve decided on, ask follow-up questions on how you ACTUALLY perform in each of those areas. Customers will rate your performance on a scale 1-5, where 1 is poor, 3 is average and 5 is excellent.

This will give you a more definitive health check on your business and find out where customers are and aren’t satisfied with your business.

 

PRO TIP
Use what you’re good at (competitive advantage) to boost your existing sales and marketing efforts. If your customers use more than one supplier for the same product/service, chances are they are thinking about how you weigh up against the competition!

 

Part 3 | Recommendations anyone, please?

As the icing on the cake, one could say, is the Net Promoter Score® (NPS®). This is a simple yet effective metric you can use to see if customers will refer any business to the friends and colleagues (more business, YES!). There is formula on how to do it (you can Google it for those wondering) but we won’t get into that here (that’s for another post).

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Putting all the pieces together

Now you can really see how you’re doing with your customers. Work out how each of your criteria stacked up against the other criteria and map that against how you’re really doing with customers in reality. This should help identify areas of improvement at a glance as well as understanding how your customers’ expectations (Part 1: what’s important to them) are met with their current dealings with you (Part 2: your performance, Part 3: NPS®).

 

PRO TIP
Use this tool as an early warning system to flag down any potential problem areas before there’s irreparable damage: your customers go elsewhere!

 

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So, what now?

“So, what now?” I hear you think. We’ve got you covered.

Here are a few extra tips and tricks to make this process much more valuable to you:

  • Use the above criteria to get you started, chop and change if you feel it doesn’t apply to your business
  • You don’t need a large sample size, 10-15 is usually enough to get an idea of how you’re tracking
  • Preferably, talk to customers you have recently done business with, the more recent the better
  • Keep the survey to the three questions and aim for no more than two minutes of someone’s time
  • If you find, as the owner, you don’t have the time to do so, have someone else who is close to the client and is familiar with your business to do it
  • After each round of surveys, brainstorm ideas together with your team and try and set recommendations for yourself
  • Make the necessary changes in your business
  • Rinse and repeat, preferably on a monthly, bi-monthly or quarterly, etc. basis

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Be objective, be gracious.

Let’s be real here, don’t let the ego get in the way. It’s what stops us from growing and understanding ourselves personally and professionally. Customers don’t like certain aspects of your business? Embrace it. Change it. Reach out with open arms and customers are more than likely to give you constructive feedback to improve on.

When you sit down with your customers, just have a whole hearted and HONEST conversation about the current state of affairs. You are empowering them to help you provide a better product or service.

Stay objectively connected with the business and start a process of continuous improvement. It’s a long-term investment (emotionally and financially) that pays off in the end. Happy customers, happy business (isn’t that how the saying goes?).

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PS. Now that you’ve made it this far, we’ve actually got the checklist for you here. Go get started and start making your customers’ voices heard!

 

Winning and Losing

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For any business, being able to retain customers is one thing but understanding why you weren’t able to conquer the ones that didn’t make the purchase is just as important.

From my years of experience conducting market research, many companies seem to focus solely on business they do have (which is great) but forget about the sales they should have made but didn’t.

I have devised a simple and practical, yet effective, do-it-yourself market research strategy which any business can implement in-house. It’s called the Win/Loss Analysis and forms the first chapter in our series, Market Research Made Easy (watch this space!).

Understanding why customers didn’t choose you but someone else is central to this analysis. When you’re asking the ‘ones that got away’ as well as your usual customer base, you are essentially combining a competitor analysis, a customer satisfaction survey, your company’s own brand perception among your customers, and at the same time highlighting areas of the business which require much needed improvement.

How did the idea of the “win/loss analysis” originate?

  • After having worked with numerous clients over the years, we found ourselves talking to their customers about not only what worked well for them but also what didn’t work well for them.
  • We then translated this into asking lost sales (i.e. people who obtained quotes or made an enquiry but didn’t proceed with a purchase) why we didn’t win their business.
  • The analysis from these two groups then presents significant opportunities for companies to improve operations at all levels.

Why ‘winning’ and ‘losing’?

  • It’s very simple: we needed to examine the differences between getting the sale (winning) and not getting the sale (losing).

What are some of the key outcomes of the analysis?

  • This process can pick up significant issues; for instance the importance of inventory control or a company’s ability to provide the right training to deliver their product or service, or any problems relating to the sales function such as quote turnaround times etc.
  • Companies can also identify and communicate the how and what of their competitive advantage and unique selling proposition (USP).
  • And, just as important, it can identify operational issues such as service protocols and make sure they match customers’ expectations.

What are some the things to consider when doing your own Win/Loss Analysis?

  • Don’t be afraid to ask your customers tough questions (e.g. what did we get wrong or what can we do better for you?).
  • Make sure your questionnaires are consistent; it is important to use the same questionnaire for your customers so you can compare the results.
  • You don’t have to ask many of your customers or lost sales; 10 in each group is usually enough.
  • Make sure the questions are relevant to your customers and you are prepared to make changes based on those findings; good or bad.
  • Let your customers know what changes you plan to implement in your company, product, or service offering in response to their answers. This can translate into more customer loyalty.
  • Don’t let your ego get in the way; it’s not about you … it’s about your company and, importantly, your customers.
  • Once the analysis is done, be sure to follow-up any changes and measure how effective those changes are with your customers. Do this over regular intervals.

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The 8 global consumer types and how to reach them

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Increasing sales whilst tightening budgetary expenditure seems paradoxical, but it can be achieved by focussing marketing efforts on your key audiences.

Traditionally, consumers were categorised by demographics, skewing representation of their habits and lifestyle; however, marketers are now releasing that consumer habits and preferences are the most important factors influencing purchasing behaviour.

Evaluating personal attitudes (i.e. media consumption, buying behaviour, individual aspirations); Euromonitor International identified 8 global consumer types in a 2018 study:

 

Identifying key audience/s, their shopping motivators, major personal influences, habits, and purchase decision drivers when evaluating product innovation, sales and the marketing will enable retailers to maximise sales on a low budget.

Source: Euromonitor International

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Aged Care – A Critical Analysis

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We have seen an exponential increase in the number of elderly in proportion to the total population over the past decades. However, people aged 65 and over are not as healthy in old age as projected considering our prosperity, according to recent findings of an international study done by BDO in cooperation with the OECD.

Additionally, elderly and healthcare costs are continuously increasing especially due to an international increase in comorbidity (two or more illnesses are present in the same person simultaneously) among those aged 65 and over, placing a heavy social and economic burden on future generations.

Average medical expenses for a person aged 85 and over amount to over AUD$79,200 per year (BDO); an alarming amount considering that this group is expected to exceed 25% by 2050 worldwide.

Furthermore, due to high educational requirements, the demand for health care professionals far outstrips the supply. What’s more is, many lower-skilled health care professionals were made redundant in the last years, due to unnecessarily high requirements.

Analysing national differences in their approach to aged care revealed extraordinary insights in BDO’s recent international study.

Even though all examined countries were faced with tremendous demographic challenges, the study found that not only differences in health care models and funding seemed to impact the health of the elderly, but lifestyle and habits too. In Norway, for example, people are healthier for a significantly longer period of time due to an outdoor lifestyle, a ‘culture of caring’, with families taking care of each other and the elderly taking an active and meaningful part in society

Furthermore, smokers made up only 4% of the population, whereas in Germany, where elderly (on average) only have 8 healthy years over 65, 20% of the population smoked.

A different approach to evaluating return on investment (ROI) in the Netherlands is showing positive results. The country seeks to shift their focus away from the disabilities of patients and further towards their abilities.

BDO concluded that current healthcare systems focus on curing the sick rather than preventing sickness and does not deal with the root of the problem.

To achieve a more affordable, more effective and sustainable aged care system we need to:

  1. focus on innovation, prevention and rehabilitation;
  2. target funding to boost innovation;
  3. lower educational barriers for health care professionals;
  4. develop technical innovations;
  5. encourage and support big-scale lifestyle changes;
  6. invest in methods, solutions and processes that ensure people age differently;
  7. seeking greater dialogue with the elderly to identify areas of improvement;
  8. evaluate ROI;
  9. acknowledge lack of difference between private and public healthcare systems; and
  10. give the elderly a place and purpose in our society.

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Source: https://www.bdo.com.au/en-au/insights/healthcare/publications/new-perspectives-on-elderly-care