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Market research can be expensive, and it takes a fair amount of time and thought to do well, so why do it? The short answer is that management wants to make informed decisions and to ensure that they’re keeping their finger on the pulse of the guy who employs them – the customer. When pondering market research, generally companies are considering a decision that involves a significant investment, or that has a large potential for risk if they were to make the wrong decision. In some cases they’re trying make a million dollars on a new product, and in other cases they’re simply trying to hedge their bets to make sure that they protect the markets that they already have a stake in. Knowledge is Power! Market research is all about increasing your understanding of the market, of the customers’ motivations or their frustrations that may not have even reached the surface yet, but are a on a slow boil that could upset the applecart. Knowing something more than your competitor can be the difference between success and failure, and in many cases the customers are the ones that know best. Maybe your customers are especially pleased with your service offerings, and you could actually be selling your services for a significant price-premium over the competitor’s offerings? Customers might not be buying your product because they like it, but instead they might tolerate it simply because it provides some benefit to a need that hasn’t been well addressed by anyone’s product yet Maybe you’re not advertising in the right places, or the language that is used in your advertising leaves your customer more confused than motivated to purchase. Maybe some slight changes could yield great benefits for your company’s sales numbers? Maybe that product idea that your company has been kicking around for months is actually something that holds great potential, but your group is deadlocked over whether it should be pursued or not. Some customer feedback could help to break that tie. Market research is simply a more systematic approach to gathering customer feedback and ensuring that the feedback is as independent and unbiased as possible. In addition to the actual research findings, another common benefit is that research tends to focus the team on the needs and expectations of the customers. This is particularly beneficial because many people tend to believe that they are representative of a typical customer. The reality is that anyone employed in an industry tends to be much more knowledgeable, interested and sensitized to the topic than is a typical customer. Conducting market research seems to remind employees that everything that they do should be in service of that ‘typical customer’. When it comes to understanding what a typical customer values and why they value it, market research can be a great tool and is probably worth consideration as you ponder that next big decision.

About the Author: Chris Hawkes is a Senior Market Researcher at MarketResearch101.com. Chris has been conducting qualitative and quantitative market research for well over a decade and has researched a variety of topics in over 20 countries across the world. MarketResearch101 is the web's greatest source of Market Research information.