Market Research

Mark and I started this blog to indulge our shared passion for market research, particularly the analysis of data to spot trends and identify business opportunities.  Having spent four years collecting and analyzing data about the eHealth market in general and the Canadian eHealth market in particular as professional analysts, we both continue to do so as a “hobby” that spills over, to some degree, into our day to day work.

Having sold market reserach products and services, both Mark and I feel that the role and value of market research is sometimes not well understood.  Hence, we have decided to post our thoughts on market research and why it is an important component of successful sales, marketing, and product management.

3 responses to “Market Research

  1. I have been involved in various forms of market research for most my short working career. I have seen this field from the perspective within a vendor, as part of the investment community and as a full time market research analyst. In the end the value of market research to the end client (vendor, provider, your boss, etc) is about three key items: Accuracy of the data, Timeliness and Analysis.

    Accuracy and Timeliness are fairly obvious in their value, get it wrong or read the information to late and there is no value. The harder one to pull off in my experience is the Analysis part because the analyst has to draw the correct conclusions for the client/boss/etc that will either identify a new business opportunity or identify a potential threat. The ability to draw the right conclusions from a mass of contradictory data is 50% science and 50% art.

    What is also poorly understood by the consumer of the intelligence is the value of context and identification of where the opportunity does not exist or of threats that are overblown. In the case of eHealth in the Canadian market, understanding how healthcare services are delivered in each of the 10 provincial markets is incredibly valuable because to a large extent healthcare admin and clinical services are what drive IT purchases. Vendors from my experience tend to say “Ya Ya I know this” and gloss over the finer details….a classic market mistake. An equally large mistake is when vendors focus on what they see as large opportunities or big threats in the market based on their own experience or limited information. Analysts are not always right, but they do offer a rational third-party sober second thought for management on these issues.

    Do analysts get it wrong? You betcha we do. I always felt that I was judged based on what I go wrong and not on what I got right. If I was a vendor/provider paying X dollars for advice I would hold the analyst accountable as well. The trick is to put in the work on the front end and collect as much verifiable primary research from the market as possible. That way it is not just an opinion, but instead is based on solid evidence.

    One final note of caution to those who buy market research. Pay attention to how your research vendor gathers data. Those who spend the time and money to get good data, will maximize your market opportunity and minimize your market threats.

    Mark

  2. As Mark so rightly noted, analysts are typically trying to make sense out of a large number of data points, some of which might be contradictory. Further, it is often not to possible to assemble a complete set of data. Hence, the analyst is left to make sense of what data they are able to acquire.

    One of the key tools that an analyst can use to make sense of the many data points is what Mark and I refer to as “context”. If you have a good understanding of the market, the players, and, the politics involved then it is much easier to assess the data and, in many cases, fill in the gaps.

    There are many market research reports available that are based on single survey or set of interviews. The organizations preparing these reports often have a cursory understanding of the market and, hence, very little context. I believe that these firms have a limited ability to draw significant conclusions an and often miss important subtleties when interpreting the data collect.

  3. I was digging around the other day and looking at some of the US-based analyst shops and came across an interesting business model…open source analysts.
    (http://redmonk.com/about/)

    I knew of the founder of Redmonk from a previous job, but had not kept tabs on him or his company. They have taken an interesting tack in the Market Research and taken an open source model to generate revenue. Unlike traditional market research vendors, all of their “content is open and freely accessible”. They generate most of their revenue from yearly retained subscriptions with clients, but they do not do commissioned work. An interesting model because it directly addresses one of the key challenges…perceived credibility.

    It is common knowledge in the industry that many (but not all) market research vendors will produce public facing “independent research” that analyzes a particular market. The challenge is that often this research is funded by one vendor in particular, making it difficult to tell if Chinese Walls have really been erected and the information is not an infomercial for the vendor commissioning the work. I like what Redmonk has done by adopting the open source model, therefore to a large extent removing this issue. The real question is can you scale this? If you make a rough estimate of the revenue generated by their subscriber base I would find it hard to believe they can ever grow to a 100 person company. I guess my other question is do they want to grow big or remain a boutique?

    Very interesting model and very innovative.

    Mark

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