7 Ways to Use Market Research in an Economic Downturn
Savannah Trotter • 9 Jun 2023
If we've learned anything in the last decade, it's that the market is unpredictable and always subject to change.
When faced with economic turbulence, we know that consumers will be tightening their purse strings. But this leaves many companies wondering how to adapt their strategies to survive or perhaps even thrive.
Often, the knee-jerk reaction is to pull back.
Unfortunately, market research and consumer insights departments often feel the brunt of the subsequent cutbacks. Forcing them to trudge forward with lower budgets, understaffed teams, and a "do more, with less" attitude.
Under normal circumstances, market research is crucial for understanding customers, competitors, and market trends. But during an economic downturn, it becomes even more essential.
By taking the time to truly understand the changing needs of the market and the opportunities on the horizon, organizations can thrive, even under poor market conditions. Here's how:
1. Identify shifts in consumer behavior: During an economic downturn, consumer behavior can change rapidly and without notice. With new economic stressors come new priorities and buying habits. Market research can help businesses understand how their customers are responding to the economic climate and what they can do to better serve them. This makes it an ideal time to dig into shifts in purchase behavior, preferences, and attitudes through targeted surveys.
2. Re-Evaluate your offerings: While it might seem counterintuitive, an economic downturn is a great time to re-evaluate products and services. Does the offering still meet the market's needs? What are consumers' priorities when shopping in a given category? What elements of a product or service matter most to consumers now, and why? Using a mix of traditional surveys, conjoint analysis, and/or maxdiff analysis can allow organizations to re-work their offerings to better fit changing expectations. However, before making any seismic shifts, run the ideas by core customers with concept tests to confirm the findings.
3. Assess your competition: In turbulent economic conditions, competition can become even more fierce as businesses fight for a slice of shrinking consumer spending. Insights from market research can reveal a competitor's strengths and weaknesses, and even illuminate how they are adapting to changing conditions. This information can not only help businesses strategize, but it can also show you potential gaps and opportunities to capture additional market share.
4. Build a healthier brand: Brand building isn't just a startup activity. Having a healthy, relevant, and memorable brand can improve customer loyalty and retention- both of which are crucial during economic uncertainty. Brand trackers are one of the easiest ways to get timely feedback on how key indicators like awareness, usage, consideration, and loyalty may have changed due to market events.
5. Evaluate your pricing and promotions: It's a fact that in an economic downturn, consumers become more price-sensitive. Because of this, businesses that re-visit their pricing and promotional strategies have the upper hand. Running price sensitivity and optimization studies (like Van Westendorp or Gabor Granger) can give you a price point that maximizes your revenue without compromising demand.
6. Explore new markets: If a business wants to maintain (or grow) its revenue streams during a downturn, exploring new opportunities through market research is key. This is a great time for organizations to branch out and survey consumers outside of their traditional market segments. The insights gained can help to guide new product and marketing strategies for the new audiences identified.
7. Monitor trends: Economic downturns can be unpredictable, and market trends can change rapidly. Market research can help businesses stay up-to-date on the latest trends and adjust their strategies accordingly. Perfecting products and messaging in a downturn requires staying on top of shifting behaviors and attitudes.
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