Market Research: Budget Breaker or Budget Builder?

6/25/2024   By: Jeff Jefkins

“Market research is a cost center.”

Yeah, it’s true. It does cost money to conduct research. So maybe not the best opener for someone who runs a market research agency.

It’s also clear that market research helps organizations generate money in several ways (inform product design, determine target audiences, optimize marketing investments, support customer loyalty, minimize investment risk, etc.).  Perhaps even more importantly, research can help you make a business case for budget the next time you’re having one of those fun chats with your CFO or investors.

Market research can be a powerful tool for securing investment for projects within an organization by providing data-driven insights and justifications. These can be new products or features, brand / marketing campaigns, and other relevant programs.

I love lists and am prone to a top 10. Here are some ways market research can help generate money:

  1. Determining Market Demand
  • Identify Needs: Show that there is a clear demand for your product, service, or feature enhancement through surveys, qualitative insights, and/or market analysis.
  • Market Size: Quantify the potential market size to illustrate the opportunity and potential revenue.
  1. Competitor Analysis
  • Gap Analysis: Highlight where competitors are outperforming your organization (or where they are vulnerable), showing the need for investment to stay competitive.
  • White Space: Determine where you can position yourself against competitors that offers relevant differentiation.
  1. Consumer Insights
  • Feedback: Present customer feedback indicating a desire for your initiative outcomes.
  • Segmentation: Identify key customer (or market) segments that would be particularly interested in the initiative, showing targeted growth potential.
  1. Financial Projections
  • ROI Estimates: Provide ROI projections based on market research data.
  • Cost-Benefit Analysis: Show how the benefits of the project outweigh the costs through cost-benefit analysis.
  1. Risk Mitigation
  • Identify Risks: Use market research to identify potential risks and how they can be mitigated.
  • Contingency Plans: Develop data-backed contingency plans to reassure stakeholders that risks are managed.
  1. Trend Analysis
  • Market Trends: Highlight current market trends that support the need for your project.
  • Future Projections: Show future market trends and how your project aligns with long-term organizational strategy.
  1. Stakeholder Alignment
  • Stakeholder Interests: Use research to align your project with the interests and priorities of key stakeholders.
  • Support Gathering: Provide evidence that key stakeholders or departments support your project, in some cases leveraging the insights you’ve gleaned, building a coalition for budget approval.
  1. Efficiency Improvements
  • Resource Allocation: Show that market research has identified the best use of resources, reducing inefficiencies.
  • Process Optimization: Demonstrate how your project can streamline processes and reduce costs in the long run.
  1. Innovation
  • Innovation Trends: Use research to show how your project is aligned with industry innovations and advancements.
  • Competitive Edge: Illustrate how your project will provide a competitive edge based on research findings.
  1. Evidence-Based Arguments
  • Data-Driven Decisions: Use concrete data and case studies from market research to support your arguments.
  • Clear Justifications: Provide clear, research-backed justifications for why your project is necessary and how it will succeed.

By leveraging these insights, you can build a compelling case that addresses the concerns and priorities of decision-makers, increasing the likelihood of securing the necessary budget for your programs and initiatives.