The value of research: more navigating, less drifting.

• Author: Sablosky, Tanja Lian
• Position: Feature

Since you know your local marketplace, you can save money by playing your hunches when developing a new product.

Right? Wrong!

Relying on intuition without doing market research is like sailing without a chart and compass.

Let's say frontline personnel pass along some comments they have heard from women customers. The information suggests that these customers would benefit from a new type of service. The question: Do you immediately develop and launch a program based on the remarks of a handful of customers? Or, do you wait and conduct market research to corroborate the hearsay evidence?

If you're like many banks, you'll try to save money by skipping the research. You'll develop a program based on your own knowledge of the marketplace with the help of a few calculated hunches.

Marketer's intuition can work--but it's a risky proposition. It's like a mariner who tries to sail through tricky shoals by "dead reckoning." Just as the sailor needs to supplement his experience with the judicious use of charts and scientific instruments, the marketer should supplement his personal knowledge and expertise with appropriate market research.

According to George Morvis, Jr. of Financial Shares Inc., Chicago, research is essential to sound business decisions. Banks need research to identify target markets and, once they are identified, to gauge the success of market penetration. Even if you know your market well enough to manage without research, a well thought-out, well-conducted research campaign always pays dividends.

Here are some of the things that research can do. It can:

* Confirm your hunches.

* Reveal additional customer information that can have a impact on your business plan.

* Identify opportunities.

* Clarify advertising campaign targets and the media needed to hit them.

"Market research is the process of acquiring, analyzing, and sharing the implications of relevant information for the purpose of making decisions and taking appropriate actions that will maximize business performance," says Teresa Ziebarth, a senior employee with Wells Fargo & Co. and a board member and an adviser for the ABA School of Bank Marketing and Management. "Research is not just used for marketing purposes; it is also used to further define and clarify strategies. Market research is focused on providing information to achieve bottom-line results."

Dr. Tom Fusso of Synovate, a market research firm in Vancouver, Canada, with 76 offices in 43 countries, says research helped a smaller bank he recently worked with claim a larger market stake. The smaller bank was struggling to survive in the same market as a larger bank. The smaller bank conducted market research in the form of a segmentation study and...