Chavanie Clarke | Research is top business tactic for times of turmoil

Businesses across the world are beginning to grapple with the consequences of a global pandemic. The outbreak of the COVID-19 virus has rapidly changed consumer behaviour and business forecasts.

Operations across several sectors will likely face financial challenges, driven by mild to severe declines in revenue stemming from contraction in consumer demand, production halts, diminished access to raw materials and supplies, cancellation of events and the redirecting of spend towards essentials.

Under these conditions, the typical business response is to begin cutting back in various areas to curb spending. Research and development spend tends to be deprioritised in difficult times. On the contrary, research spending should be seen as a competitive necessity. Evidence suggests that market research has advantages in maintaining and even increasing sales and market share during an economic downfall, and after, when there is an upturn. Below are four reasons why your business should engage in research during an economic downturn.

There is no truce

The fierce nature of business competition does not pause in times of downturn and crisis. Companies who take their eyes off the ball or skimp on studying the market become vulnerable to being overthrown by competitors. Companies should see the down-turn as an opportunity to expand their advantage over competitors and build momentum. To arrive here, companies must understand how the market stacks up and regularly tap into the market to refine their strategies, ensuring an explosion of momentum once the upturn gets underway.

Lifestyles are changing

Slowed economic and social activity, illness, and reduced earning potential can have profound impacts on the way consumers behave. They adjust their priorities, life goals, and behaviours to their new reality and, during this time, it also becomes more challenging for them to articulate their needs. Companies which build their brand strategies around alignment with consumer lifestyles and goals, especially in the aspirational products and financial services sectors, will need to understand these shifts, to tailor messaging and communication to align with new consumer mindsets. Moreover, business process and operation planning will benefit from knowing whether consumers will revert to previous consumption patterns when the crisis ends. Or will the crisis behaviour become the new normal? What new products and services will customers become open to?

Scarcity

Scarcity is a function of daily life. However, in recessive periods, the concept becomes more prominent. Business will need to become more targeted and deliberate with their spend. Marketing collateral (and yes, you should still advertise) needs to be effective and targeted. Amazon grew sales by 28 per cent in 2009 at the height of the recession by continuing to invest in research and innovation. It was then that the company developed the Kindle and continued to sell more e-books than printed books on the platform.

Undoubtedly, companies will cut some spending, including marketing, which makes it doubly important to have rigorous pretesting to avoid using a much needed budget on ineffective messaging. Media platforms are inundated with COVID-19 facts and fiction from across the globe. To cut through the noise, ads must be powerful and relevant. Using research tools to test marketing collateral ensures that chief marketing officers get a bang for their research budgets and appropriate focus is given to the products, brands and markets that are integral to their underlying business strategy.

Opportunities are ripe but not yellow

A few companies make money in an economic downturn, while many companies lose because the route to winning is not always obvious. Snickers was founded in the 1930s during the Great Depression, Groupon was founded during the 2008 recession and, at the same time, Netflix attracted three million subscribers by the end of 2009. Growing in a recession is not limited to new brands. Dominoes used research to reinvent its pizza recipe, using a data-driven process to evaluate each component of the pizza. In fact, an awareness campaign was developed for the launch using actual consumer feedback from taste tests.

Opportunities will present around new products and service lines. Even in the midst of public fear, there is a unique requirement to be satisfied. Research is essential in supporting companies in identifying, quantifying and exploring opportunities during the downturn.

COVID-19 presents some unique challenges for the traditional research space. Going door to door with clipboards goes against the preventative measures around social distancing, which are recommended to keep citizens safe. Bluedot Data Intelligence, through its online survey platform BluedotComuna, has direct access to a database of pre-profiled Jamaicans from varied social, lifestyle and demographic groupings ready to provide feedback in solving some of the nation’s most burning questions. Bluedot offers a suite of digital data collection capabilities, to engage consumers and collate meaningful insights to help companies during the imminent downturn and the leverage to excel once the market picks up.

Chavanie Clarke is an experienced data and business analyst and serves as chief insights officer at Bluedot Data Insights. Email feedback to columns@gleanerjm.com and insightsinja@bluedotinsights.com.