Is your research any good?

• Author: Lubin, Paul C.
• Position: A - B - C - Marketing research fundamentals

Marketing research is a powerful management tool. On the strategic level, it can be used both for risk management and decision making. It can, for example, help a financial institution judge the bank's positioning in the marketplace and determine if it should target a new customer segment. On a tactical level it can help a bank decide whether it needs to:

* Introduce a new ad campaign.

* Change a delivery channel.

* Take steps to ensure that it is meeting customer needs.

Too often research is used to validate a decision that has already been made, rather than used as a tool to guide the decision. This approach diminishes the importance of research, encouraging management to cut its funding--further reducing the chances that whatever research is done will be performed properly. Among other things, skimpy resources lead to a compressed timetable for completing the project which, in turn, results in inappropriate data collection methods and, many times, superficial data. Inadequate data further undercuts the perceived value of research.

For marketing research to play an important role, management must have confidence that the information is accurate, actionable, timely and above reproach. Here's how to ensure that your marketing research project meets all of these criteria.

Determine the purpose

A marketing research project starts with a need for information that will either guide a decision or provide the data necessary for determining whether certain actions will be taken. Hence, it is critical to determine clearly the purpose of the research and how the information will be collected, reported and analyzed.

Many times research projects are launched without a well-defined purpose. This shortcoming leads to the use of inappropriate methods for collecting and reporting information. The information collection method is often decided on the basis of cost and not on the ability of the method to generate accurate and credible information to satisfy the purpose. This situation is why, when the collected information fails to meet the intended need, management starts to question the usefulness of research as a decision-making tool.

Set the objective: Defining and setting the objective is the first step in conducting successful marketing research.

One of the most common objectives is to determine whether the bank is meeting customer needs and, if not, where it is falling short.

Many times bank retail personnel develop an objective that is too broad and confuses the objective with the data collected. An example is management launching research to measure customer satisfaction. The objective does not set guidelines for how the information will be used, thus making it difficult to determine the most appropriate data collection method. This can lead the researcher to select a data collection method and number of interviews that do not meet management's underlying objectives.

For example, using the above objective, a marketing research company executed a telephone interview among checking account customers. In order to control expense, the researchers kept the interview short, at less than 10 minutes, and included questions covering overall satisfaction with the bank and agree/disagree statements.

The researchers completed 500 interviews in total. While the project was sufficient to measure overall customer satisfaction across the customer base, management did not know...