Why Market Research Is Worth Every Dollar
LMD is a change agency. And as change agents, we need to stay on top of evolving trends, changes in perceptions, and even shifts in language to help our clients make informed decisions. One of the most effective ways to measure change and its impact is market research.
When I talk to clients about market research, they’re generally positive if not enthusiastic. After all, what marketer doesn’t love the idea of getting inside the heads of their audience and understanding what and how they think? What business doesn’t want the tea on their competition? Who wouldn’t get excited about getting answers to all their burning questions about their brand and using the findings to write a brilliant marketing strategy?
Then they ask me how much it’s going to cost.
Not gonna lie, market research isn’t cheap. Even small research projects will take a chunk out of your budget. And looking at the price tag, I can understand how it can be easy for a client to wonder, “Don’t I know everything I need to know about my audience, my brand, my business? Is this effort going to tell me anything new? Is market research really worth it?”
I tell clients to think of market research as an investment that delivers significant returns. Here’s why allocating marketing dollars to research is not just justified—it’s strategic.
Market Research Helps You Make Confident Decisions
Market research's primary return on investment (ROI) is its ability to reduce uncertainty and risk. By understanding your audience’s needs, preferences, behaviors, and pain points, you’re no longer shooting in the dark or going on what you think you know. You’re not building your marketing strategy on a hunch. You have facts–and even if it confirms something you already suspected, research gives you demonstrable proof you didn’t have before. As the renowned American economist and composer W. Edward Demings said, “Without data, you're just another person with an opinion.” Whether you’re creating a new brand or launching a new campaign, decisions backed by data are significantly more likely to succeed.
Market Research Gives You Laser-like Focus
Target your campaigns. Personalize your messages. Customize your marketing strategy. All of this is possible using the results from market research. When you understand who your customers are, what they value, and where they spend their time, you can design efficient campaigns that get results—which translates to higher return on marketing spend, increased customer lifetime value, stronger brand loyalty, better customer engagement, and improved conversion rates. Knowing which customer demographics respond to specific messages or platforms means marketing efforts can be laser-focused vs. the “spray and pray” approach that can drain your budget.
Market Research Keeps Tabs on Your Competition
Markets are saturated with similar products, services, and messages. How can you cut through the noise? Differentiation. Market research–specifically, competitive analysis–can provide insight into your competitors’ positioning, messaging, and branding. It can also update you on their marketing strategy, current ad campaigns, and new product line entries. This information can help your organization carve out a distinct space in the market, identify unmet customer needs, and capitalize on gaps in service.
Market Research Is the Key to Brand Health
Your brand wasn’t built overnight, and the health of your brand isn’t a set-it-and-forget-it proposition. Market research supports long-term brand health by measuring awareness, sentiment, and loyalty over time. By assessing these metrics, you can proactively manage your brand and keep your position and messaging aligned with your audience’s perceptions.
Additionally, ongoing research on industry trends and customer satisfaction can help your organization stay agile and responsive instead of reactive in the face of emerging threats or market shifts, and set the foundation for a sustainable growth strategy and long-term profitability.
A Market Research ROI Case Study
If I haven’t convinced you yet of the value of research, here’s a real-world example of how research is worth your investment of money and time.
A few years ago, a client came to us wanting to rebrand. The brand hadn’t changed in many years, and the organization’s leadership suspected it had stagnated and thought a rebrand might revitalize it.
Our initial client discovery session indicated some signs that the brand was indeed ready for a refresh. The brand hadn’t received much love in the last decade and would benefit from being modernized, which could renew excitement about the brand and increase awareness of the organization’s mission among new audiences.
However, there were also indicators that rebranding was risky. The client had hundreds of assets, from social media accounts and websites to SWAG and fixed signage, that would need to be rebranded. The client also had some negative past PR related to their financials. Spending thousands, or potentially millions, of dollars on creating materials with a new brand without a strong rationale for rebranding could put them back in the public spotlight, and not in a good way.
Our research showed that the brand had very strong recognition, favorable sentiment, and positive equity. Research participants told us they associated the brand with high standards of quality, reliability, and trustworthiness. However, they also said the brand lacked a compelling story and “reason to believe.”
Based on these findings, we recommended that the client keep the current visual brand, but refresh the brand messaging with a strong case for why this enduring symbol of quality is as relevant and necessary today as it was when the brand was first introduced. This recommendation not only prevented the client from unnecessary spending, it also protected and preserved the organization’s reputation and credibility.
In Conclusion: Market Research Is An Investment in Clarity
The ROI of market research isn’t always immediate or directly quantifiable, but its value is undeniable. Market research offers a return that extends beyond your budget by reducing risks, sharpening strategies, and improving customer engagement. It provides clarity, confidence, and a competitive edge. So, the next time budget decisions are on the table, remember: investing in understanding your market isn’t a luxury—it’s a catalyst for growth.
Curious about what your audience thinks about your brand? Let LMD do the research.
