The Best Types of Market Research for Professional Services Firms
Marketing strategy is rooted in having a fundamental understanding of your target market, and it pays off for professional services firms. Our own market research shows that firms who conduct systematic research on their target client groups are both more profitable and grow much faster. Who doesn’t want that?
When I share this finding, the next question is almost always around what types of market research should be used. In previous articles we’ve discussed what type of topics should be covered and who should do the research. Today I’ll cover various types of market research methods professional services use to better understand their target market.
Types of Market Research
- Primary research
Primary research is where you collect data yourself directly from the source. For example, your business is considering adding a new service to compliment an existing one and you need to develop a marketing strategy.
You could design your own research and get feedback from your clients directly. But doing primary research yourself can be costly and time consuming. For instance, you must decide on which clients to target and what questions to ask. To understand your firm’s true competitive advantage you will have to compare your results to your competitors and other firms in the industry.
Over the past decade, we’ve learned a few lessons on how to do market research in professional services. Here are some of the methods we use when we do primary research for our clients:
Perhaps the most common type of primary research today, surveys have become a fixture of the modern online experience. Even the market research industry has seen major activity recently with the SurveyMonkey IPO and SAP’s acquisition of Qualtrics. The trick is no longer collecting the data. It’s knowing the right questions to ask, which tools to use and how to interpret the results.
Surveys work well for getting information from a lot of people. They can tell you what proportion of respondents feel a certain way or share a specific characteristic and can be a great way to achieve statistical significance. However, online surveys seldom yield the subtle qualitative insights of an interview, such as natural language used to describe their most pressing challenges.
In professional services, surveys are widely used for client satisfaction studies. If you want to get more in-depth insights, though, you need to consider other types of market research.
Professional services firms are typically better served by interviewing representative members of your audience individually. Face-to-face interviews give you the flexibility to schedule busy executives (often current or potential clients). You can also tailor your interview questions to probe for answers and adapt to situational responses. This approach is perhaps the most effective source of data for professional services firms.
Face-to-face interviews, however, do come with a couple of important limitations. First, they are the most expensive interviews to conduct. A skilled interviewer must travel to the client, who could be located anywhere. Further, the interviewee may be reluctant to give up the extra time these interviews typically take.
Phone & Video Interviews
Phone or video interviews are often a better alternative for most firms. They offer almost the same set of benefits as individual face-to-face interviews but at a much lower cost. It is much easier for a busy executive to take a phone call than to sit down for a meeting.
The main advantage lost in these interviews is the interviewer’s ability to read body language. But with the increased use of video tools like Skype, Google Hangouts or Zoom, even that distinction is fading. It’s no wonder that video or phone interviews tend to be the best choice for many firms. We use them for many of our clients’ research projects.
Get a group of your target customers together in one place and ask them a series of questions. Voila! You have a focus group. Widely used in consumer products research, focus groups have the advantage of being both face to face (to observe body language, show prototype products or view sample advertising) and flexible enough to be adjusted on the fly by a skilled moderator. They can also be less expensive than individual interviews, as you are working with multiple people at the same time.
But focus groups have several limitations that make them impractical for most professional service applications. First, it can be very difficult to get a room full of executives to show up, let alone open up about their business in front of their peers. Also, since professional services typically have nothing to show, why bother? And a limitation of any focus group, of course, is that group dynamics can easily cloud the results — in the end you may not even get truthful answers to your questions.
- Secondary Research
Secondary research involves referencing someone else’s primary market research. It is a cost-effective way to gain insights, but it may not answer all the questions you have.
Using the same example as before, you might look at economic data to estimate market size, or turn to market studies on buyer behavior to guide the decision making process on whether it makes strategic sense to add a new service. Sometimes secondary research is publicly available and free. Other times it must be purchased.
Secondary research is often used for estimating the size and growth (or shrinkage) of markets. It rarely provides sufficient insight to help you tailor your service or gain a competitive advantage for your firm. For those insights you will typically have to do primary research.
Which types of market research should your firm be using?
It obviously depends on the questions you need to answer.
- Secondary research helps you judge overall markets and identify trends.
- Phone interviews allow you to zero in on individuals. You can gain an in-depth understanding of needs, attitudes, plans and reactions.
- Surveys help you bridge the gap between the two. For instance, suppose you have identified a service you can provide to clients who fit a certain profile. What percentage of the market fits that profile?
Research allows you to get practical answers to these types of questions. So it’s no wonder that firms that do regular market research often have a true competitive advantage.
- Our Professional Services Guide to Research gives you the tools and knowledge you need to lead your firm through conducting research.
- Read the latest findings from Inside the Buyer’s Brain, Second Edition, the biggest study of professional services buyers to date. It’s free!
- Join us on LinkedIn, Facebook, and Twitter for more insights on how to conduct research that will help your firm grow.
How Hinge Can Help
Don’t overlook the importance of business research for your firm. Research gets to the core of what will resonate with those audiences—and is an integral part of what Hinge does for clients. Learn more about our research services or contact us to learn whether research makes sense for your professional services firm.
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