In Moneyball Brad Pitt turns a tiny little team into a huge success. How so? The power of analysis! Too good to be true? We think not.
We know that companies that understand their market will outperform competitors, and for our companies we are the voice of superior customer understanding.
A recent Market Research Executive Board survey asked 291 senior and junior level business line partners whether they believe that “Customer Focus is Critical to My Company’s success”. The answer was overwhelmingly yes, with 95% of both Senior- and Junior-level decision makers strongly agreeing or agreeing with the statement.
So we are all on the same page in thinking that customer focus is important. But is it empirically?
A stream of research on Market Orientation has sought to examine a linkage between a focus on markets and customers and company performance (See The Capabilities of Market-Driven Organizations, George Day, The Journal of Marketing, October 1994; The Effect of a Market Orientation on Business Profitability, Naver and Slater, 1990). General consensus amongst these academic articles is yes, “Market orientation positively affects various measures of performance, such as overall business performance, profits, sales, and market share” (Market Orientation: A Meta-Analytic Review and Assessment of Its Antecedents and Impact on Performance, Kirca, Jayachandran, & Bearden, Journal of Marketing, April 2005).
Great. So it does matter, but can we show that the Market Research Department is pivotal in this relationship?
In the same survey of business decision makers, we asked whether they believed that their “MR Department Is a Thought Partner”. Answers were fairly dispersed:
Market Research is a Thought Partner
We took this information from survey contributors, and matched it against data showing the performance of their companies relative to other companies in their industries (S&P 1500 Industry Indexes, ratio of 5 year total shareholder return for company to industry average, n=85 companies), and the results were in the best possible way unsurprising:
Ratio of company to industry performance, separated by “Market Research is a Thought Partner” responses:
Those companies where company decision makers believe that market research is a thought partner have been performing better relative to others in their industries. Everyone can quibble with the data but the point is – lots of different studies agree. Customer focus drives business success.
So how can Market Research achieve valuable thought partner status, and achieve shareholder returns for their company?
In the Analysis and Insight topic center on the Market Research Executive Board website, we lay out several ways to create an environment conducive to insight generation, get beyond conventional wisdom, and Increase researchers’ ability to convert insights into compelling recommendations for business partners.