“…but what exactly is market research?” I get this question a lot from friends.
Last week (I swear), a college friend said, “I was in a meeting earlier today with ‘company not to be named’, and they used exhibits with your company as the source… what is it exactly you guys do, again?”, he asked.
My short answer, “we guide executives’ decisions with market insights.” I could not help but grimace and said,“the ‘company not to be named’ lifted the exhibits off the internet [or our website]. They are not a client don’t know anything about the underlying assumptions or data behind the exhibits.”
Market research, when done properly, reflects the nuances and critical factors shaping changes in the competitive landscape (e.g. market share), supply chain strategies, and forecasts of a specific sector. In today’s connected environment, where we are constantly bombarded by information, executives need to be confident in the insights influencing their decisions.
Here are a few hard and fast rules I would emphasize:
A data point, without context, is just a data point that can only take you so far. I can tell you, for example, that there were 97 U.S. water utility acquisitions in 2018. But what is not evident is which players executed these deals, what is the impact on market share, and how is projected trend of privatization shifting by company type, region, deal size…etc. Insights are more than just regurgitating the news, press releases, and conversations, but rather holistic analysis of a market, including the ups and downs.
Core to reliable insights is a transparent research methodology, which is frequently sidestepped out of haste. Why? Because it takes time and experience. In sizing water markets, like others, there isn’t always a “right” answer, but scenarios or sensitivities that are shaped by industry-specific levers.
Further to my point, the top line number for industrial spend on water management in 2018 was approximately $10 billion. Given economic optimism in the U.S. and rising (if not robust) commodity prices, industrial water withdrawals must be increasing in parallel. In fact, industry is actually using LESS water. The real story, however, is that the way industrial verticals are using water is changing across supply, treatment, reuse, and discharge.
Independent perspectives matter. As market experts, my company is connected to a broad network of companies and executives. Our analysis is founded on primary research and independently collected from the market. I think this counts for a lot, considering it’s probably difficult for executives to call competitors and our analysts are not bound by our clients’ inherent biases.
Could you do the analysis, yourself? Yes, you probably could. But at what cost? And in what time period? If it is not your role– or your colleagues– to execute a market research plan and maintain independence from management’s “desired” outputs, the financial implications are market research are high.
Recognize the risk and value of properly performing research by considering the following questions:
- How knowledgeable is the person or team executing the research?
- How much time will it take to ramp up and at what cost?
- Will the decision-makers understand the underlying research methodology?
Google might be your company’s worst enemy. Since Google’s launch on 4 September 1998, corporate executives have unknowingly become exposed to a false sense of security to justify market entries, a product launches, M&A decisions, and resource allocations. Increasingly, market analysis and forecasts presented to executives are founded on the ease and functionality of online search engines rather than sound research methodologies.
Google receives over 63,000 searches per second. (I found this number on the internet in <5 seconds.) I have no idea how old the data is, where it came from, or whether is real but does sound good, if not amazing. So, should I throw it into my marketing presentation for our search engine optimization strategy meeting? Absolutely not! Therein lies the rub.
Market insights are more than just the gathering of information, news, and data from a myriad of disconnected sources.
Not all market research is created equal. Training-up general consultants is frustrating, so working with industry experts enables intellectual honesty from the outset. An experienced and vetted market research firm should be able to transparently share data sources, forecast assumptions, and the math.
It’s important you find the right firm to fit your needs and not brand alone. Don’t be fooled by the big brand and high price, because some of the largest and most recognized consultancies also rely on Bluefield Research for water market insights.
Having worked for a number of market research firms over the years– some bigger than others– and since founding Bluefield Research over five years ago, the world has changed. The risks to business, however, have not.