Increasing Market Research in a Recession

1. ARROWPOINT-MARKET RESEARCH AND INSIGHT SOLUTINS;

2. Increasing Market Research in a Recession, At the same time that marketers must pare research expenditures, they face added pressure to secure high-quality data and insights. What's a CMO to do? In the recession, consumers are cutting back, seeking deals, and changing buying habits. This uncertainty has surged in markets. Ironically, to conserve cash, companies are reducing spending on market research. In the U.S., market research spending has fallen for four consecutive quarters, with CMOs expecting a prolonged downturn. Major consumer marketers aim to cut research budgets by 10 to 20 percent, highlighting the challenge of adapting to changing consumer behaviors while managing financial constraints.

3. In flush times, a rising tide of consumption can compensate for less than optimal branding, positioning, pricing, or segmentation. That is certainly not the case now. At the same time that marketers must pare down research expenditures, they face added pressure to secure high-quality data and insights. I recommend that CMOs take the following seven steps to minimize the impact of reduced spending. In times of economic downturn, maintaining focus and executing strategic decisions are pivotal for marketers. It becomes imperative to optimize digital marketing efforts by strengthening online presence and concentrating on cost-effective channels such as social media, email marketing, and content marketing. Customer retention should take precedence, with investments in personalized communication, loyalty programs, and exceptional customer service tailored to the needs of core customers. Embracing an agile marketing approach enables quick adaptation to market changes through monitoring industry trends and consumer sentiment. Additionally, evaluating the performance of various marketing channels and reallocating resources to those offering the best return on investment is crucial. Internal collaboration between marketing, sales, and other departments fosters alignment and identifies cost-saving opportunities. Keeping a vigilant eye on competitors' strategies and understanding the competitive landscape allows for effective differentiation. Flexible budgeting, allowing adjustments based on real-time performance data, facilitates resource reallocation to the most effective strategies and seizing new opportunities. Implementing a test-and-learn approach through small-scale experiments refines marketing strategies based on actual performance. By integrating these strategies, marketers can navigate economic challenges with resilience, emerging stronger on the other side.

4. Value experience and judgment. CMOs should tap the knowledge and intuitions of managers and researchers who've lived through previous recessions. In setting prices, for example, such insight can help calibrate the optimal level of price promotion offers. Experience also reveals proxies: in tough times, some marketers use research results from Sweden as a proxy for Scandinavia, rather than conducting the same research in all Scandinavian countries. Seize opportunities overseas. Some large multinational marketers, such as Unilever, are shifting research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. Relative to the developed economies, the costs of research in emerging economies are less and the payoff from incremental insight can often be greater. Brand preferences and consumption levels in emerging markets such as China, India, and Brazil tend to be more fluid. Consumer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop. Go online with a dash of skepcitism. Online research is cheap, fast, and the wave of the future. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. As an alternative to offline focus groups, custom online panels of consumers can be formed for qualitative research on new product ideas or new ads. Taking the do-it-yourself approach rather than outsourcing to a market research firm is attractive in a cost-cutting era, but you risk getting no more than what you pay for. The opinions of convenience sample of an enthusiastic online brand community may not represent all users.

5. It's crucial for marketers not to adopt a one-size-fits-all approach when making budget cuts. While it's important to know where to reduce research expenditures, it's equally critical to identify areas where cutting may be detrimental. In times when marketers are scaling back on new ads and product introductions, rigorous pretesting becomes doubly significant to select the most robust alternatives. Investing modestly in copy research in categories experiencing shifts in consumers' value judgments can prevent wasteful spending on ineffective messaging. Supplementing standard tracking studies with a few additional questions proves to be a cost-effective method for gaining insights into changes in customer attitudes and purchasing behavior. For key products, running conjoint studies helps assess shifts in price elasticities of demand and price-attribute trade-offs, contributing to improved profitability in pricing decisions when cash is at a premium. Despite budget constraints, it's essential for marketers to keep an eye on the evolving consumer landscape. While predicting the future is challenging, dedicating a portion of market research to understanding potential changes in consumer behavior is a smart move. Questions arise: Will consumers revert to previous consumption patterns post-recession, or are they developing enduring coping mechanisms? What new products and services might they be open to embracing? In categories like financial services where consumer confidence and brand trust have eroded, understanding the time and steps required to rebuild them is critical. Although the recession will eventually end, future success hinges on being well-positioned, informed by thorough research, for the post-recession landscape.