The role of marketing research in B2B decision making
Editor's note: Andrew Silk is the account director at Euromonitor International. This is an edited version of an article that originally appeared under the title “B2B Decision Making: Don’t Underestimate the Value of Market Research.”
You wouldn’t expect a pilot to fail his pre-takeoff checks or not review the weather forecast. So why would a business fail to engage in market research before setting out on a particular strategy, product launch or important decision? Pilots today need to take account of an increasingly complex array of factors – increased air traffic movements, gridlocked airports, extreme weather events and new technologies, which are supposed to make their lives easier and less stressful.
Similarly, the business environment decision makers face today is fast paced, constantly changing and in a more connected world, more prone to shocks and challenges that were unanticipated even a few years ago. Now more than ever, it’s important to understand the market that a business operates in and accurately appraise the risks faced by the business today. How many investments in innovation, products and expansion initiatives could have been improved – or even avoided in the worst cases – if executives had truly harnessed the insights and guidance of proper market research?
Marketing research is crucial in a B2B context
The importance of market research lies in enabling a business to understand its market, customers, products and competitors. Independent market research places a business in context with its environment, providing a full appreciation to executives of the external factors that might influence its decision making capabilities and future performance.
While some B2B enterprises use market research, how many have successfully implemented comprehensive market research strategies into their decision making processes to add real value to the organization? Some B2B industries are highly concentrated with data and insights held in the hands of few, high-value stakeholders. Other segments are more fragmented, resulting in a more complex and disparate information landscape. Understanding how market research can aggregate useful insights can be a challenge given these fundamental differences, but external providers can add a wealth of experience to address these situations and help companies harness their data effectively.
As B2B companies face an increasing multitude of market disruptions, heightened competition and customer demands and pressures for profitable, sustainable growth from investors, they must increasingly rely on market research to provide the insights they need to make smarter business decisions.
B2B market intelligence drivers
All businesses must continually define their strategies, manage their operations and pursue growth initiatives amidst an increasingly complex and evolving economic, regulatory, competitive and supply landscape. The business environment in recent times has been more uncertain than it’s ever been, with specific market dislocations such as COVID-19, the war in Ukraine and supply chain disruptions impacting businesses to some degree. Businesses are also facing macro-level trends that they must navigate including digitalization and an increasing focus on sustainability and climate-friendly business practices.
Secondly, heightened competition is forcing B2B companies to seek efficiencies, develop new pricing strategies and seek new markets. Existing customers of B2B suppliers are driving demand for a greater level of insights and sustainable innovation – typically, this information wasn’t available or wouldn’t be shared widely, but now represents an essential tool to attract new and retain existing customers.
The third driver is a renewed focus on performance improvement from the stakeholders of enterprises – maximizing investments in growth opportunities while avoiding mistakes of the past. Shareholders are demanding scrutiny on sustainability and how the business is impacting the broader space it operates in. Perception and reality are converging so appreciating the market context here is vital for the business.
However, there is a lack of information for most B2B verticals, leading many B2B organizations to rely on internal or anecdotal information to inform decisions. Or they run biased or incomplete research processes. As a result, blind spots are created, the echo chamber gets louder and B2B companies lack the objective, unbiased information and know-how to address growth opportunities through meaningful market research.
Reaching the decision makers
Whether an organization faces a competitive threat or needs to take advantage of a new market opportunity, the need for clarity is paramount. The only constant in today’s business environment is continual change. B2B market research can provide business leaders with insights to make better informed decisions throughout all levels of the organization. From functional leaders, like those in sales or marketing, product developers or partner and channel managers, right up to the executive leadership, market intelligence can help bring a fresh perspective and drive better decision making.
High-quality market research helps make these market truths self-evident, supported with insightful conclusions and recommendations. Decision makers can incorporate market research into many of their existing tools and processes. For example, in strategic planning or product and demand planning; business expansion initiatives such as new market entry evaluations and M&A target identification and selection; competitive reviews, market share tracking, sales pitch development, goal or target setting; and innovation discovery projects.
Solving B2B pain points
How can market intelligence help decision makers? Some of the more common issues faced by organizations can be addressed by certain market research tools and methodologies, but all share the same objective – independent, unbiased research driving insights for better decision-making.
Does your business need to expand by entering new markets or launching new products?
Preparing a detailed market opportunity assessment can provide clarity into new addressable markets, market size, an organization’s positioning within that market and their right to win.
Perhaps you need to penetrate deeper into existing markets with resonant value proposition? Are you using the right messaging and channels?
Now more than ever, it’s essential that your business understands the voice of its customers. Buyer persona research – identifying which people buy your product and why – is essential to driving your sales efforts. You need to know who to target and what motivates them. Coupled with an understanding of the buyer’s journey, the path buyers take to purchase products, you can gain clarity over the whole sales process, as well as helping informing marketing about improvements to lead generation for prospects and pipelines.
Are your current strategies successful? How do you protect your competitive position?
A competitive landscape analysis can provide a clear snapshot of the state of the marketplace you operate in, your position relative to others and an assessment of factors that differentiate you from your competitors. This analysis can help inform strategic decisions and more operational matters including how your competitors are meeting or failing buyers’ needs and expectations.
Do you need to build resilience into your supply chains to weather disruption?
Value chain mapping and partner identification can help strengthen your existing supply chains and develop partner programs that truly enable and incentivize partner engagement for your business.
Perhaps you want to understand the market perception of your products and services?
Brand research, how the marketplace views your specific company, can be an important tool for the marketer. Learning how prospects view your brand is critical to drive new sales. How do customers and users feel about your brand once they’ve bought a product or service? Methodologies such as customer satisfaction surveys, focus groups and in-depth interviews throughout the value chain allow you to learn the market perceptions of your brand within the context of the broader landscape.
Joana Maricato of Ingredion says “Market research is a crucial part of our business strategy to maintain a customer-centric approach. We view independent market research as a way of gathering unbiased and objective views of the marketplace and topics we’re exploring. Partnering with independent market research agencies also serves to challenge internal assumptions as well as advise on actions and next steps.”
She added, “Insights help to identify trends and changes in and around the marketplace, driving a fact-based understanding of our customers. In turn, teams are empowered to make informed decisions based on data and insights, which are more accurate, consistent and lead to better results. Insights-driven decisions have had a positive impact on how we create value through improved understanding of customer needs and preferences. Market research insights facilitate strategic planning by senior leadership, as it drives well-informed decisions, identifies impactful courses of action and helps to minimize risk.”
B2B market intelligence stressors
Many organizations attempt to conduct market research by themselves. The dangers in this approach are incomplete data sets, unstructured processes and biased information. That’s why supporting the organization with an experienced partner can deliver real value. Businesses want a partner who has extensive experience working across niche/complex/B2B industries, who is familiar with sound methodologies and frameworks, with a truly collaborative approach to understanding your business, its customers and context. At the end of the day, the most important driver is clarity. By providing clear, actionable insights, market research can be a real differentiator in helping B2B organizations make better decisions throughout the business.
Clients derive such insights when their research partner has global reach, a breadth of industry and supply chain knowledge, macro and socioeconomic expertise and the proven frameworks and experience in applying them to niche, complex and client-specific needs.