On average, market research and competitive insights rank as one of the top areas of spend for marketing programs, accounting for 13.2% of marketing budgets. And this is with good reason; without data-driven understanding of your customers, it’s highly unlikely that you will address their needs better than your competition. You risk missing out on valuable opportunities–or even worse, pouring resources into innovations that fall flat. The latter happens more than you might think; 76% of FMCG product innovations fail within a year.
In times of economic uncertainty, your initial instinct may be to drastically reduce spending in these areas. However, this is not the time for indiscriminate cost cutting. Companies that make strategic, fine-tuned adjustments to their marketing budgets are more likely to perform better, in both the short and long run. Furthermore, McKinsey predicts that recent changes in consumer behaviour will continue to persist in the months to come and that companies’ success will depend on their ability to anticipate the challenges ahead.
While unnecessary spending should be reduced, it’s equally important to spend wisely. Effective knowledge management can help you improve budget efficiency by bringing greater value to your market research endeavours. In this article, we’ll explain how.
Eliminating duplicate or overlapping research
Most companies know more than they think they do, but this is especially true for large, global companies. However, it is often the case that this knowledge is not used efficiently. Instead, it is confined to a single market, hidden on local file drives, or labeled in a way that makes it difficult to find. This can lead your company to spending money on insights that it already has.
To avoid unnecessary spending on redundant research, it’s important to stay continuously updated on your company’s market knowledge and keep an active inventory of what you already know.
Commissioning more valuable research
When you purchase market research, you do so with the assumption that the insights you gain will create value for your company. But the returned value is largely dependent on the quality of the research itself. Without doing thorough background research, you run the risk of asking the wrong questions and potentially rendering the insights worthless.
This is why it's essential to carefully review your existing research to identify specific gaps in knowledge or nuances in consumer preferences. By asking the right questions, you can increase the value of new research, while also getting more value from the insights you currently have.
Addressing the evolving needs of consumers
Making sure that everyone has access to your market knowledge is crucial to maintaining agility on an organisational level. As mentioned previously, the ability to pivot quickly to create products and campaigns that continually meet consumers changing needs is more essential than ever.
For example, recent research from McKinsey has found that between 30-40% of consumers have been trying new brands or products. Nearly half are doing so because their usual choice is unavailable, and 19% are opting for more affordable options. Companies who fail to anticipate rapid changes in consumer demand and preference risk losing business to competitors, a loss that becomes even more expensive in a time where every dollar counts.
For effective knowledge management, choose the right technology.
It’s difficult to stay informed without the right tools. A knowledge management platform like Stravito is one of the best ways to achieve budget efficiency. With features like AI-powered search, drag-and-drop upload, and recommended collections, Stravito makes it easy to find and share information.
By staying on top of your company’s market knowledge, you can ensure that you aren’t ordering redundant research, that you’re getting maximum value from the research you do conduct, and that you are able to address consumer needs with agility. In turn, you can allocate your marketing budget wisely to help your company successfully navigate in times of economic uncertainty.
3 Strategies to Help You Shine a Light on Dark Data
Thor Olof Philogène Feb 26, 2020