Why Franchise Brands Should Invest More in Market Research
by Desirae Mills, Communications Manager for One Hour Heating & Air Conditioning
Global consumer brands like Facebook, Coca-Cola, and Proctor & Gamble (P&G) heavily invest in research to inform and drive their marketing strategies. However, many franchise organizations are not in the position to compete with P&G, nor would they even want to do so.
Franchises are both common and uncommon when it comes to consumer marketing. They have particular considerations that set them apart from a corporate organization, like Walmart, but also need to connect with their target consumer audiences, just as much as the Coca-Colas of the world. Market research helps franchise organizations take a more targeted approach to consumer marketing that, ultimately, allows them to make informed, intelligent business decisions.
In this article, we review why it’s imperative to invest in market research, the different ways to approach this research, the pros and cons of each, and the results you can expect from each approach as it relates to franchise consumer marketing.
Why Invest in Research
For any business, regardless of whether it is franchised or not, understanding how your company is perceived among your target customers, intimately knowing your competition, and speaking the language of your consumers is critical to marketing success. Not only does it allow you the leverage to create impactful campaigns, but it keeps you a step ahead of the competition.
Types of Market Research
Customer Experience Research
Market research provides key insights into what drives your customers and affects their brand experience. Thorough research gives you the ability to dive into your consumer’s thoughts, processes, and actions, allowing you to hone your targeting, messaging, and timing.
Brand Perception Research
Taking a research-based approach to your marketing and communications efforts also provides tactical comprehension when it comes to understanding how your brand is viewed among your key publics. Knowing this information not only drives marketing effectiveness but can also help identify potential issues early on, reducing the risk of business losses.
When evaluating your market, a key component of the research is understanding your competition.
“Conducting a competitive analysis is essential for understanding what’s being done well in the industry, where there is opportunity and how to make your brand stand out among the competition,” said Christine Neal, Marketing Manager for One Hour Heating & Air Conditioning.
Market research is a vital component of a comprehensive marketing strategy, allowing you to benchmark brand progress, measure growth, understand customer needs and provide timely solutions.
Conducting Market Research
There are basically two main approaches to market research. The traditional research approach, which utilizes a combination of qualitative and quantitative methodologies to derive insights. The alternative research approach, which capitalizes on the data that most marketers already have at their fingertips including social data, website data and listening tools.
Traditional Research Approaches
Qualitative Research Methodology
Qualitative research focuses on deriving insights through open-ended and conversational questioning. It seeks to determine why customers answer questions the way they do.
While qualitative research is often more costly, the benefits of understanding the psychology behind consumer choices is highly valuable.
Some common types of qualitative research methods include:
- Focus groups
- One-on-one interviews
- Ethnographic research
Quantitative Research Methodology
Quantitative research is a technique used to ask your target audience questions utilizing a data-driven approach. Quantitative research methods allow you to drill down into specifics about your company, your market, your customer personas and more, providing a deep well of quantifiable data to derive insights.
Quantitative research allows you to take a larger sample size of your audience and gather ample data upon which to base marketing decisions.
Some common types of qualitative research methods include:
One Hour Heating & Air Conditioning conducted an in-depth market research project in 2021 that incorporated both qualitative and quantitative methodologies to inform a robust overhaul of their marketing approach. Conducting one-on-one interviews through a vetted research group helped bring key customer personas to light.
Defining these customer personas and meeting them where they are in the customer journey is a primary focus for One Hour Heating & Air Conditioning and the insights derived from the research project will help inform all aspects of the marketing strategy in 2022.
Facebook’s User Experience Research Approach<
Facebook also utilizes a hybrid of these traditional research methodologies with their five pillars of product research, which include:
- Foundational Research – Used to determine the wants and needs of customers.
- Contextual Inquiry – Focused on understanding how customers use technology in general.
- Descriptive Research – Seeks feedback from customers on what they would like to see a new feature or service do for them.
- Participatory Design – Discovers how the end user would describe their ideal interaction with a product or service.
- Product Research – Focuses on observing how the customer uses a particular product or service prior to launch so that improvements can be made to improve user experience.
Benefits and Limitations of Traditional Research
Traditional research is a great way to benchmark and begin tracking brand perception, market segments and trends, customer preferences, and more. It is a methodical approach to better understanding your brand’s impact and changes over time.
However, traditional market research can be costly and time consuming. Additionally, it focuses on past experiences and data is outdated almost as soon as it is collected. Finally, traditional research relies on active participation. Finding customers willing to participate and generating a substantive sample size can be difficult to achieve.
Alternative Research Approaches
Social media has provided today’s brands with access to massive amounts of data. Utilizing your followers to glean insights is a new form of market research.
Social listening tools allow brands to identify trends, opportunities, and gaps in their marketing. By understanding the online conversation surrounding your industry, your brand and your products/services, you are able to act quickly to address customer wants and needs.
A great example of utilizing social listening is the shoe brand, TOMS. During their social listening research, they discovered that people who discuss TOMS on social channels were also discussing My Little Pony at disproportionately high rates. Using this insight, TOMS quickly created a My Little Pony niche shoe to appeal to this audience segment. The shoes sold out in less than 48 hours.
Utilizing data garnered from google analytics and social media channels, brands are able to derive important key insights.
Actionable information on topic and keyword search trends, visitor demographics and lifestyle insights can shape a better understanding of your target audiences and what they need from your organization.
Benefits and Limitations of Alternative Research
Alternative research methods are a low-cost way to address several limitations posed by traditional research methods. In addition to gaining instant access to a deep well of data, you are able to garner real-time feedback from a diverse online audience. This allows you to derive valuable customer insights and interpret audience data signals that can lead to determining customer’s needs and market disruptions before your competitors.
While alternative research methods offer timely benefits, they oftentimes lack depth and core understanding when it comes to consumer psychology. Ultimately, taking a diverse approach to your market research methodology and utilizing a mix of traditional and alternative approaches could provide the well-rounded, robust results you are seeking.
How to Get Started with Market Research
There are many options when it comes to conducting market research. At times, you can take a more DIY approach. Other instances may require the specialized skillset of market researchers who understand the data and can ferret out implementable key insights for your business.
Unless you have an experienced market researcher and data analyst in house, it’s best to leave the research to the professionals. Reach out to trusted marketing vendors you currently work with for recommendations on potential research partners.
Research Best Practices & Expected Results
Prior to embarking on a research project, ensure you have your ducks in a row to make the process as efficient as possible.
Know your competitors
Prior to beginning your research, ensure you know who your competitors are and where to find them online. Know their websites, their social media channels, their apps, etc. This will make your competitive analysis work move along smoothly.
Know your business goals
What are the goals your business is trying to achieve? Knowing these will allow your research team to align their methodologies to help you meet your business goals.
Know your research needs
At the end of the day, what do you want to learn from this research? Is the focus on the brand or on the consumer? How will you use the information derived from your research? How will this information be operationalized across the organization?
Expected Results and Key Research Takeaways
When embarking on a research project, here are the recommended key deliverables you should walk away with and understand in-depth.
Who are your top competitors and where do you fit into the mix? How do you stand out?
What are the steps your customer takes to find, know, and love you?
Who are your target customers? How do they want to be spoken to? What do they want to see from you? Where do they want to find you when they need you?
What are the main pieces of information you want your customers to know about you? What do you want your customer to think, understand and remember when it comes to your brand?
Market research is a vital tool for creating a data-driven approach to your marketing strategy. Not only does it provide rich insight into your customer’s experience and journey with your brand, it helps to construct a fact-based foundation for forecasting profitability. Sound research is a key component for making informed decisions that lead to business growth.
Regardless of your niche, competition for your customer’s attention is fierce and the consumers of today have high brand expectations. Solid market research allows brands to create a comprehensive, data-driven marketing strategy that aims to acquire new customers and reinforce the positive relationships built with existing customers.