Actionable Insights | 4 Steps to Effective Marketing Research
Learn how the Ansoff Matrix provides a foundation for informing revenue growth
If research presentations have become a tax on your time, it’s probably because you’re failing to find the business opportunity.
Back in the early days of my career I hoarded research wherever I could find it, populating the first few slides of every deck with almost anything that communicated authority and credibility.
To be fair, I needed it!
Public schoolkids (like me) in their early twenties were short on the social skills that created an instant connection with our customers (and I probably still am), so we retreated behind our spectacles and great walls of data in the hope that the numbers would validate our efforts.
They didn’t then, and they don’t now. They just bored people to tears.
I can still see the heads sinking into their hands as I insisted ‘25% of customers think...’. It was, well, embarassing!
I spent a lot of the latter part of my career trying to fix this!
The value of knowledge is undeniable, every wise decision is underpinned by experience and expectations.
But if we’re establishing our marketing strategy based just on personal convictions or hunches, we’re doing something wrong: business thrives on identifying customer opportunities, and that means understanding their needs and forecasting the outcomes of our proposed solutions.
Those needs, those opportunities and those forecasts are all vital data.
So, clearly not all data is redundant.
The problem is that we need to invest more time and picking the right data and showing what it means.
We need to find the data that inspires growth.
A Growth Framework
Most data insights have a relatively clear goal: we want better knowledge to mean that we are more effective tomorrow than we are today.
We want to do more of the things that work, and less of the things that don’t.
In marketing this typically means revenue growth.
Applied mathematician and business strategist Igor Ansoff created a matrix back in 1957 that helped codify growth opportunities into four quadrants.
They provide a useful model for marketing departments to consider when devising future strategy:
- Market Penetration strategies involved generating increased revenue from the same product and the same customers. Typical considerations were how to increase frequency and value of purchase.
- Market Development strategies involved generating increased revenue from the same product, but to new customers. Typical considerations were to how identify new product uses or new sales regions.
- Product Development strategies involved generating increased revenue by diversifying the product or service offering to the original customers. Whilst maintaining core brand values, typical considerations were how to expand the offering in an industry sector by meeting unfulfilled needs.
- Diversification strategies involved the ‘nuclear option’ by creating new products for new markets and relying on the competence and capability of a team to develop entirely new business models.
Ignoring any ‘halfway’ gestures that involved fudging the business proposition, Ansoff couldn’t see any other options.
If this is true, and if the objective of marketing is growth (customer creation) then it means that data is only valuable if it improves our decision making in these areas.
Likewise, the only valid way to present data is as a spur to action.
We call this ‘If, then what…’.
"If our competitors do not reach 25-34 year-olds, then we see an opportunity to grow our customer base"
"If consumers who buy milk also buy yoghourt, then we can diversify our product range"
The ‘So what…?’ question becomes key to all data analysis.
If we can’t find an action from a particular insight, then it simply becomes redundant.
This doesn’t mean it is forgotten (appendices are there for a reason, and can often spur other questions) but if it’s not central to your decision making then it’s the first data to disappear.
If you’re currently thinking about this question in terms of an internal presentation, a PowerPoint data slide without an action point is probably wasting everyone’s time.
Narrowing the Field
Knowing that data must be actionable, we can use Ansoff’s Matrix as a guide to research objectives that are likely to deliver the results we need:
- Competitive analysis often reveals supply information that tells you not only what markets are well covered, but where opportunities or gaps may arise. It may disclose a temporary weakness that can be exploited.
- Indirect competitive analysis of similar industries may reveal approaches or processes that could be applied in your own business to drive innovation
- Behavioural analysis can reveal the triggers that drive purchase, influencing both your marketing media and message.
- Attitudinal and perceptual analysis may reveal existing beliefs and values that help you differentiate your product
- Consumer segmentation data that identifies different communities that have similar characteristics can help establish market potential. These data points can cover both ‘hard’ demographics and ‘soft’ attitudinal data about lifestyle and values.
- Foreign market analysis can reveal opportunities to grow when home markets are mature or saturated.
- Purchase situation data uncovers opportunities to expand product or service offerings. A single product may often be bought as part of a portfolio of other goods or services that meet a need or life stage that you could bring under your commercial umbrella.
- Complementary service analysis can uncover opportunities that exist within the value chain that you currently supply, revealing opportunities to extend your services.
- Environmental analysis can offer insights into likely changing contextual or regulatory influences that demand goods or services that don’t currently exist, but that your commercial team may have experience with.
Focus on Externalities
Next time you find yourself in search of growth opportunities, try to expand the reach of your research to external factors which may impact on your business.
It is the speed of response to these factors compared with your competition that provides fertile ground:
- The Demographic Environment
- Population Growth
- Changing Age Profiles
- The Ethnic Environment
- The Educational Environment
- The Economic Environment
- The Social Environment
- The Natural Environment
- The Technological Environment
- The Political Environment
As with all marketing activities, there’s no time like the present!
A great way to get started involves a five-stage process:
- Analyse your existing business activities against the Ansoff Matrix
- Identify at least one activity in each of the quadrants that would meet a growth objective
- Specify the insights that would allow you to make an informed choice to proceed
- Brief a research study to test your hypothesis
- Pull out the relevant data and present the opportunity it reveals
It really is as simple as that!