Tara Lyons, MD of fieldwork company Indiefield, outlines why she predicts the market research industry will pull through the forecasted recession.
Everyone’s heard of the credit crunch, it’s all over the press, but what are the effects likely to be in each sector?
The financial industry, notably banking, is already noticing the effects of the subprime housing crisis and credit crunch. As we’ve seen, banks are having to deal with write-downs spiralling into billions. And now there’s talk about jobs being cut in the Square Mile too, as well as further down the banking chain.
Not only is the financial sector being hit, but technology vendors and marketing agencies are predicted to also suffer from an economic downturn - not to mention the effects of reduced consumer spending on the high street. If you believe everything you hear about it, then 2008 and the next couple of years are set to be rather gloomy.
However, I for one don’t see it being all that bad. Markets need to have their ups and downs in order to remain buoyant, and so we can appreciate the good times. In times of caution, businesses need to take a closer look at their structures and processes and work out the profitable and not so profitable areas where they’re spending money.
One area we think can really blossom during this period will be market research. During a period of reduced spending and slashed budgets, which industry experts are forecasting, knowing your market and customer is key to keeping your head above water. It’s important to continue to allocate funds to researching the market, as this will allow companies to remain competitive.
Whether researching for new customer markets or retaining existing clients, it’s all about gathering customer feedback to understand their needs. As the saying goes, ‘it’s not what you know, but who you know’. I’d actually rephrase that to ‘it’s not who you know but what you know about them’.
Investing money into research, by interviewing people for surveys and focus groups, will go straight back into the business. The feedback and subsequent research will help companies glean important information so they know how to approach the market during these difficult times.
Any difficult economic period lends itself to a ‘spring clean’ of an organisation. Whether letting people go, reorganising departments or just looking at which areas of the business are profitable or not can help organisations stay afloat.
In order to audit your business, you need to focus on where the money is, namely your customers. Getting feedback and researching the market is the first step towards this, as it involves them in the process and ensures that they’re at the forefront of all considerations.
Not only does this help organisations focus on their success spots, but it also keeps the customer happy and helps build the brand. In this day and age of start-ups and increasing competition, brand loyalty is important to retain your clients. Market research can help with this by ensuring that customers know their feedback is valued.
Carrying out research and putting the information to use by adapting to the customers’ needs will be appreciated - and will help establish the brand while analysing the marketplace. It also helps company branding by getting the name out to people who might not have already heard of your organisation.
The market research business is generally regarded as a ‘recession-proof’ industry, for all the reasons mentioned above. As the old saying goes, ‘the customer is always right.’
Being able to predict what they want and how they want it gives companies an edge over their competition and allows them to stay in business when others are suffering. I have faith in the market research industry’s abilities to continue to succeed in 2008, despite gloomy prospects.
Not only is it a resilient industry, which will continue to thrive against the odds, but there are some established players in the field too.
This may also be but a lucky coincidence (there’s no statistical analysis to back this up!), but we’ve traditionally done well in former US election years (2000 and 2004) and we can assume that this year will be no different with or without the effects of a credit crunch.
And if it does ring true again this time round, the US should have elections more often!
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