Authored by Peter Hunt
Most finance companies and industry suppliers do little or no research. Tucked away in an already-squeezed marketing budget, research spend becomes an irrelevance and has little impact on the business. Why should it be any different.
1. More sales, more profitability
Customers don’t always tell sales people the whole truth or all the reasons for their decisions. Fairly common organisational responses are to latch onto false headlines (often pushing margins down) or believe that it’s too hard to compete in a particular market segment. Before reducing profitability for the whole business based on poor information or the response of a limited proportion of the prospect base, research lets you get the facts from an unbiased perspective. Payback can be rapid and ROI high.
In all markets, it’s true that for some customers price is everything. But think of corporates like people and you’ll appreciate that we don’t always want the cheapest at any price. Research helps you segment and focus your proposition on customers who truly value a broader range of service, relationship or extended product features, driving increased product profitability, a more stable customer base and higher conversion ratios. Let the price-chasers self-select a different supplier.
2. Increased performance of existing business operations
Once a deal is on the books, a natural drive towards process efficiency and cost containment sometimes fails to pick up what’s important in terms of maximising profit for the business. Linked to a quantified understanding of the flow of deals running through your business and the cost and revenue impacts of in-life events, research lets you understand commercial situations to apply costs where they’re valued, and avoid loss situations.
Bizarrely it’s often great service that is the most damaging. As an example I go back to my days running the CRM programme for a FTSE 100 life assurer. The relevant customer services manager was very proud of the speed with which early terminations were dealt with and paid out – but didn’t appreciate that this had a negative impact on profitability. Research allowed me to show that in many cases, early termination was not the best course of action for the customer and could be avoided by providing advice to incoming callers, allowing us to retain and enhance valuable income streams.
3. Improved profile for customers and staff
Put simply and as long as you act upon its findings, research shows you care. Customers and staff want to feel that their opinions matter and that you will do something about their concerns. As a result, they increase their bond with you. If a research project aimed at understanding how to improve staff performance and morale saves two sets of recruitment fees in a year, it probably pays for itself – before you even consider its findings!
Companies are in the market for the best employees as well as the best customers. Thoughtful publication of research findings can create the impression of a progressive, dynamic organisation – exactly where the best talent want to work.
4. Payback on research
Research
is generally viewed as a budget cost. Yet it can drive increased
performance in every part of your business, including as an income
generator. Used wisely, it can achieve a rapid payback and strong
ROI, with a host an ancillary benefits.
To discuss these issues and understand how research can be used to improve the profitability of your business contact Peter Hunt on +44 (0)845 003 1000 or e-mail peter.hunt@invigors.com.
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