In a severe recession like the one we are now experiencing, consumers change their behavior. They look for cheaper alternatives to the products they usually buy. They weigh major purchases more carefully and spend more time comparison shopping. They may even decide that things they valued in the past, such as keeping up with the latest fashions, aren’t really that important any more.
These changes in consumer behavior make market research more necessary than ever. With customers cutting back on their spending and being more selective, companies can’t afford to make mistakes in their marketing efforts. Yet the recession has led most major marketers to cut their research budgets by 10 to 20 percent. To deal with these reductions, marketing managers need to do what consumers are doing: take a good hard look at how they are spending their money and focus on things that provide the greatest return on their investment.
Many marketing consultants are suggesting a practical way to deal with tighter research budgets: shift more resources to online surveys. Telephone surveys and in-person surveys can be expensive and slow. For cost reasons, they are usually limited to fairly small samples. Each additional respondent adds to the cost of the survey.
On the other hand, online surveys can reach a large number of customers for a reasonable amount of money. Each additional respondent adds almost nothing to the cost of the survey. And online surveys are fast and efficient. Customer feedback can be analyzed easily to gain a better understanding of how the recession is affecting buying decisions. For example, conjoint analysis can reveal the tradeoff customers are making between price and desirable features. Online survey providers such as Mineful can help marketers make the most of this type of analysis.
Focusing on Core Customers
Tighter research budgets mean that marketers need to focus more on their core customers, the ones who are most loyal and most profitable. Maintaining strong relationships with these customers is the key to minimizing the pain of the economic slowdown.
Some companies may be tempted to take these customers for granted and focus their market research almost exclusively on attracting new business. But that would be a mistake. Even the most loyal customers are feeling the pinch of the recession, and marketers need to understand how to keep these people satisfied.
Looking for New Opportunities
The recession has presented serious challenges for most businesses, but it has also created some interesting opportunities. Marketers have always looked for ways to convince customers to rethink their purchasing habits and decisions, and the recession is forcing customers to do just that.
Customers seem to be more willing than ever to try new brands and new products. They are studying ads more closely and taking a harder look at what they are getting for their money. Companies that make an effort to understand what customers are looking for in this tough economy will do a better job of attracting new business. These new customer relationships will be even more valuable when the economy turns around.
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