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Home Market Research

Business Research: Methods, Types & Examples

Business Research

Content Index

Business research: Definition

Quantitative research methods, qualitative research methods, advantages of business research, disadvantages of business research, importance of business research.

Business research is a process of acquiring detailed information on all the areas of business and using such information to maximize the sales and profit of the business. Such a study helps companies determine which product/service is most profitable or in demand. In simple words, it can be stated as the acquisition of information or knowledge for professional or commercial purposes to determine opportunities and goals for a business.

Business research can be done for anything and everything. In general, when people speak about business research design , it means asking research questions to know where the money can be spent to increase sales, profits, or market share. Such research is critical to make wise and informed decisions.

LEARN ABOUT: Research Process Steps

For example: A mobile company wants to launch a new model in the market. But they are not aware of what are the dimensions of a mobile that are in most demand. Hence, the company conducts business research using various methods to gather information, and the same is then evaluated, and conclusions are drawn as to what dimensions are most in demand.

This will enable the researcher to make wise decisions to position his phone at the right price in the market and hence acquire a larger market share.

LEARN ABOUT:  Test Market Demand

Business research: Types and methodologies

Business research is a part of the business intelligence process. It is usually conducted to determine whether a company can succeed in a new region, to understand its competitors, or simply select a marketing approach for a product. This research can be carried out using steps in qualitative research methods or quantitative research methods.

Quantitative research methods are research methods that deal with numbers. It is a systematic empirical investigation using statistical, mathematical, or computational techniques . Such methods usually start with data collection and then proceed to statistical analysis using various methods. The following are some of the research methods used to carry out business research.

LEARN ABOUT: Data Management Framework

Survey research

Survey research is one of the most widely used methods to gather data, especially for conducting business research. Surveys involve asking various survey questions to a set of audiences through various types like online polls, online surveys, questionnaires, etc. Nowadays, most of the major corporations use this method to gather data and use it to understand the market and make appropriate business decisions.

Various types of surveys, like cross-sectional studies , which need to collect data from a set of audiences at a given point of time, or longitudinal surveys which are needed to collect data from a set of audiences across various time durations in order to understand changes in the respondents’ behavior are used to conduct survey research. With the advancement in technology, surveys can now be sent online through email or social media .

For example: A company wants to know the NPS score for their website i.e. how satisfied are people who are visiting their website. An increase in traffic to their website or the audience spending more time on a website can result in higher rankings on search engines which will enable the company to get more leads as well as increase its visibility.

Hence, the company can ask people who visit their website a few questions through an online survey to understand their opinions or gain feedback and hence make appropriate changes to the website to increase satisfaction.

Learn More:  Business Survey Template

Correlational research

Correlational research is conducted to understand the relationship between two entities and what impact each one of them has on the other. Using mathematical analysis methods, correlational research enables the researcher to correlate two or more variables .

Such research can help understand patterns, relationships, trends, etc. Manipulation of one variable is possible to get the desired results as well. Generally, a conclusion cannot be drawn only on the basis of correlational research.

For example: Research can be conducted to understand the relationship between colors and gender-based audiences. Using such research and identifying the target audience, a company can choose the production of particular color products to be released in the market. This can enable the company to understand the supply and demand requirements of its products.

Causal-Comparative research

Causal-comparative research is a method based on the comparison. It is used to deduce the cause-effect relationship between variables. Sometimes also known as quasi-experimental research, it involves establishing an independent variable and analyzing the effects on the dependent variable.

In such research, data manipulation is not done; however, changes are observed in the variables or groups under the influence of the same changes. Drawing conclusions through such research is a little tricky as independent and dependent variables will always exist in a group. Hence all other parameters have to be taken into consideration before drawing any inferences from the research.

LEARN ABOUT: Causal Research

For example: Research can be conducted to analyze the effect of good educational facilities in rural areas. Such a study can be done to analyze the changes in the group of people from rural areas when they are provided with good educational facilities and before that.

Another example can be to analyze the effect of having dams and how it will affect the farmers or the production of crops in that area.

LEARN ABOUT: Market research trends

Experimental research

Experimental research is based on trying to prove a theory. Such research may be useful in business research as it can let the product company know some behavioral traits of its consumers, which can lead to more revenue. In this method, an experiment is carried out on a set of audiences to observe and later analyze their behavior when impacted by certain parameters.

LEARN ABOUT: Behavioral Targeting

For example: Experimental research was conducted recently to understand if particular colors have an effect on consumers’ hunger. A set of the audience was then exposed to those particular colors while they were eating, and the subjects were observed. It was seen that certain colors like red or yellow increase hunger.

Hence, such research was a boon to the hospitality industry. You can see many food chains like Mcdonalds, KFC, etc., using such colors in their interiors, brands, as well as packaging.

Another example of inferences drawn from experimental research, which is used widely by most bars/pubs across the world, is that loud music in the workplace or anywhere makes a person drink more in less time. This was proven through experimental research and was a key finding for many business owners across the globe.

Online research / Literature research

Literature research is one of the oldest methods available. It is very economical, and a lot of information can be gathered using such research. Online research or literature research involves gathering information from existing documents and studies, which can be available at Libraries, annual reports, etc.

Nowadays, with the advancement in technology, such research has become even more simple and accessible to everyone. An individual can directly research online for any information that is needed, which will give him in-depth information about the topic or the organization.

Such research is used mostly by marketing and salespeople in the business sector to understand the market or their customers. Such research is carried out using existing information that is available from various sources. However, care has to be taken to validate the sources from where the information is going to be collected.

For example , a salesperson has heard a particular firm is looking for some solution that their company provides. Hence, the salesperson will first search for a decision maker from the company, investigate what department he is from, and understand what the target company is looking for and what they are into.

Using this research, he can cater his solution to be spot on when he pitches it to this client. He can also reach out to the customer directly by finding a means to communicate with him by researching online.’

LEARN ABOUT: 12 Best Tools for Researchers

Qualitative research is a method that has a high importance in business research. Qualitative research involves obtaining data through open-ended conversational means of communication. Such research enables the researcher to not only understand what the audience thinks but also why he thinks it.

In such research, in-depth information can be gathered from the subjects depending on their responses. There are various types of qualitative research methods, such as interviews, focus groups, ethnographic research, content analysis, and case study research, that are widely used.

Such methods are of very high importance in business research as they enable the researcher to understand the consumer. What motivates the consumer to buy and what does not is what will lead to higher sales, and that is the prime objective for any business.

Following are a few methods that are widely used in today’s world by most businesses.

Interviews are somewhat similar to surveys, like sometimes they may have the same types of questions used. The difference is that the respondent can answer these open-ended questions at length, and the direction of the conversation or the questions being asked can be changed depending on the response of the subject.

Such a method usually gives the researcher detailed information about the perspective or opinions of its subject. Carrying out interviews with subject matter experts can also give important information critical to some businesses.

For example: An interview was conducted by a telecom manufacturer with a group of women to understand why they have less number of female customers. After interviewing them, the researcher understood that there were fewer feminine colors in some of the models, and females preferred not to purchase them.

Such information can be critical to a business such as a  telecom manufacturer and hence it can be used to increase its market share by targeting women customers by launching some feminine colors in the market.

Another example would be to interview a subject matter expert in social media marketing. Such an interview can enable a researcher to understand why certain types of social media advertising strategies work for a company and why some of them don’t.

LEARN ABOUT: Qualitative Interview

Focus groups

Focus groups are a set of individuals selected specifically to understand their opinions and behaviors. It is usually a small set of a group that is selected keeping in mind the parameters for their target market audience to discuss a particular product or service. Such a method enables a researcher with a larger sample than the interview or a case study while taking advantage of conversational communication.

Focus group is also one of the best examples of qualitative data in education . Nowadays, focus groups can be sent online surveys as well to collect data and answer why, what, and how questions. Such a method is very crucial to test new concepts or products before they are launched in the market.

For example: Research is conducted with a focus group to understand what dimension of screen size is preferred most by the current target market. Such a method can enable a researcher to dig deeper if the target market focuses more on the screen size, features, or colors of the phone. Using this data, a company can make wise decisions about its product line and secure a higher market share.

Ethnographic research

Ethnographic research is one of the most challenging research but can give extremely precise results. Such research is used quite rarely, as it is time-consuming and can be expensive as well. It involves the researcher adapting to the natural environment and observing its target audience to collect data. Such a method is generally used to understand cultures, challenges, or other things that can occur in that particular setting.

For example: The world-renowned show “Undercover Boss” would be an apt example of how ethnographic research can be used in businesses. In this show, the senior management of a large organization works in his own company as a regular employee to understand what improvements can be made, what is the culture in the organization, and to identify hard-working employees and reward them.

It can be seen that the researcher had to spend a good amount of time in the natural setting of the employees and adapt to their ways and processes. While observing in this setting, the researcher could find out the information he needed firsthand without losing any information or any bias and improve certain things that would impact his business.

LEARN ABOUT:   Workforce Planning Model

Case study research

Case study research is one of the most important in business research. It is also used as marketing collateral by most businesses to land up more clients. Case study research is conducted to assess customer satisfaction and document the challenges that were faced and the solutions that the firm gave them.

These inferences are made to point out the benefits that the customer enjoyed for choosing their specific firm. Such research is widely used in other fields like education, social sciences, and similar. Case studies are provided by businesses to new clients to showcase their capabilities, and hence such research plays a crucial role in the business sector.

For example: A services company has provided a testing solution to one of its clients. A case study research is conducted to find out what were the challenges faced during the project, what was the scope of their work, what objective was to be achieved, and what solutions were given to tackle the challenges.

The study can end with the benefits that the company provided through its solutions, like reduced time to test batches, easy implementation or integration of the system, or even cost reduction. Such a study showcases the capability of the company, and hence it can be stated as empirical evidence of the new prospect.

Website visitor profiling/research

Website intercept surveys or website visitor profiling/research is something new that has come up and is quite helpful in the business sector. It is an innovative approach to collect direct feedback from your website visitors using surveys. In recent times a lot of business generation happens online, and hence it is important to understand the visitors of your website as they are your potential customers.

Collecting feedback is critical to any business, as without understanding a customer, no business can be successful. A company has to keep its customers satisfied and try to make them loyal customers in order to stay on top.

A website intercept survey is an online survey that allows you to target visitors to understand their intent and collect feedback to evaluate the customers’ online experience. Information like visitor intention, behavior path, and satisfaction with the overall website can be collected using this.

Depending on what information a company is looking for, multiple forms of website intercept surveys can be used to gather responses. Some of the popular ones are Pop-ups, also called Modal boxes, and on-page surveys.

For example: A prospective customer is looking for a particular product that a company is selling. Once he is directed to the website, an intercept survey will start noting his intent and path. Once the transaction has been made, a pop-up or an on-page survey is provided to the customer to rate the website.

Such research enables the researcher to put this data to good use and hence understand the customers’ intent and path and improve any parts of the website depending on the responses, which in turn would lead to satisfied customers and hence, higher revenues and market share.

LEARN ABOUT: Qualitative Research Questions and Questionnaires

  • Business research helps to identify opportunities and threats.
  • It helps identify research problems , and using this information, wise decisions can be made to tackle the issue appropriately.
  • It helps to understand customers better and hence can be useful to communicate better with the customers or stakeholders.
  • Risks and uncertainties can be minimized by conducting business research in advance.
  • Financial outcomes and investments that will be needed can be planned effectively using business research.
  • Such research can help track competition in the business sector.
  • Business research can enable a company to make wise decisions as to where to spend and how much.
  • Business research can enable a company to stay up-to-date with the market and its trends, and appropriate innovations can be made to stay ahead in the game.
  • Business research helps to measure reputation management
  • Business research can be a high-cost affair
  • Most of the time, business research is based on assumptions
  • Business research can be time-consuming
  • Business research can sometimes give you inaccurate information because of a biased population or a small focus group.
  • Business research results can quickly become obsolete because of the fast-changing markets

Business research is one of the most effective ways to understand customers, the market, and competitors. Such research helps companies to understand the demand and supply of the market. Using such research will help businesses reduce costs and create solutions or products that are targeted to the demand in the market and the correct audience.

In-house business research can enable senior management to build an effective team or train or mentor when needed. Business research enables the company to track its competitors and hence can give you the upper hand to stay ahead of them.

Failures can be avoided by conducting such research as it can give the researcher an idea if the time is right to launch its product/solution and also if the audience is right. It will help understand the brand value and measure customer satisfaction which is essential to continuously innovate and meet customer demands.

This will help the company grow its revenue and market share. Business research also helps recruit ideal candidates for various roles in the company. By conducting such research, a company can carry out a SWOT analysis , i.e. understand the strengths, weaknesses, opportunities, and threats. With the help of this information, wise decisions can be made to ensure business success.

LEARN ABOUT:  Market research industry

Business research is the first step that any business owner needs to set up his business to survive or to excel in the market. The main reason why such research is of utmost importance is that it helps businesses to grow in terms of revenue, market share, and brand value.

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Which are the best business research methods.

12 min read Business research is a well-established way to get an edge in your market. In this article, we’ll cover some of the most valuable business research methods.

Business research is a well-established way to gain an edge in your target market . But less than 40% of US marketers use consumer research to make decisions, according to data from Google. Could the huge range of methodologies and techniques be preventing business research takeup?

In this article, we’ll lay out some of the most popular and valuable business research methods, from general approaches to industry-specific techniques, to help you decide which business research process is the best fit for you and your company.

Free eBook: The ultimate guide to conducting market research

What do we mean by business research?

There are two primary areas of business research – understanding the market in which you’re operating, including the target consumers out there who don’t yet buy from you, and understanding your existing customers.

Market research

Market research is an umbrella term covering a wide variety of business research techniques which are used to help a business understand its target customer’s preferences.

This arm of business research often involves techniques like the focus group, where a moderated discussion helps companies understand their target audience, and survey research, including online surveys.

Customer feedback is an important part of any business intelligence process. This might come in the form of direct feedback, where a customer provides their opinion to a business either spontaneously or in response to a survey invitation or feedback form, or through indirect methods like social media listening .

As well as being able to assess customer satisfaction , this allows businesses to discover the unmet needs of their current customers. This kind of business research helps seed new product development, among other improvements.

Qualitative research methods for business

Qualitative business research techniques are all about the ‘why’ of what’s happening in your business. Rather than relying on data and statistics, they use description and human interpretation to investigate situations and events.

Qualitative research can be quite time-consuming and historically it has been harder to automate than quantitative methods, although nowadays tools are available to scale up qualitative data collection.

Even without these tools, qualitative research can be done with smaller sample sizes and still provides rich information that can offer lasting value.

Focus groups

Focus groups are a business research mainstay. They can help companies understand their current customers or target customers in a deep and authentic way using the power of conversation and connection. Focus groups can be valuable for nuanced topics, as well as controversial ones, since you can use the format to bring in multiple points of view from within your target audience.

As a form of qualitative research, focus groups are well-established with plenty of best practice advice and techniques available. They are also relatively familiar to the general public, which means low effort is required to on-board your participants.

At the height of COVID-19, Jittrapirom et al. (2021) used remote focus groups to study perceptions of car-sharing services in Bangkok, Thailand as a way of improving transport planning. They found that the ‘mental models’ of different stakeholder groups were significantly different depending on their understanding of the car-sharing concept. Working with the focus group, the researchers were able to collaboratively build a diagrammatic representation of how car-sharing works, which could then be used to help roll it out as a more sustainable means of transport in developing countries.

Ethnographic research

In ethnographic research, you study people in a naturally occurring setting. Rather than bringing them into your offices or restricting your data collection to a survey, you’re looking at the person and their environment as a whole.

In this sense, ethnographic research is all about understanding the context. You might be observing customers in a store, or interviewing them as they interact with your products and services. Ethnographic research in contexts like shopping malls, online discussion boards or social media can help you understand your target consumer too. Business research of this kind can be especially valuable in consultancy and B2B settings, where one business is looking to gain a deep understanding of another in order to help them improve.

Autmaring et al. (2018) studied SMEs working in B2B to investigate the potential for ethnographic research to improve product development. They found that although SME-level businesses had good access to their customers, their uptake of ethnographic research was low because of a lack of familiarity and concerns about expense. The B2B SMEs studied had low awareness of the benefits of ethnographic research and did not recognize that they were in a strong position to carry it out. This suggests that ethnographic research is an underused technique in business, and one that could offer significant advantages for SMEs especially.

Quantitative research methods for business

Like qualitative research methods, quantitative research methods help you understand your customer and your market better. Quantitative research can also be used to make forecasts and predictions about what might happen in the future. You can develop an in depth knowledge of your customers using existing data, or you can carry out business research to find out more about a specific research question.

Experimental research

In experimental research, you start out with a hypothesis about something happening in your business, and test it by manipulating an independent variable – or multiple independent variables – to find out the effect on a dependent variable. Strictly speaking, experimental research should follow rigorous scientific principles, but in business it’s more likely you will adopt a quasi-experimental approach with less emphasis on method and more on results.

One of the most popular applications of experimental research in business is A/B testing. A/B testing pits two or more variations of something against one another to find out which is more successful. It’s commonly used in marketing management when developing ads or marketing campaigns. In A/B testing, the hypothesis you’re testing is that both or all variations are equally successful. You’ll disprove this if one of the variants gets better results.

One of the benefits of A/B testing is that you can test multiple variants simultaneously by segmenting your audience.

For example, Kornitzer et. al (2020) used A/B testing in a healthcare setting to compare 9 patient messaging options to see which were more effective at preventing hospital appointment no-shows. The options each used a behavioral ‘nudge’ to encourage patients not to skip their appointments. By randomly assigning patients with upcoming appointments into groups, the researchers were able to test all 9 messaging approaches simultaneously. They determined that the most successful messages were those reminding people that skipping their appointment negatively impacted other patients who needed care.

Correlational research

Unlike causal research and experimental research, which look at relationships between a dependent variable and the independent variables acting on it, correlational research doesn’t deal with cause and effect. Instead it looks at phenomena that occur in proportion to one another, without one necessarily having to act on the other.

This kind of business research is helpful because it acts as a starting-point for further research. It can provide promising hypotheses that are worth investing in, as opposed to just guessing which variables might be related causally. Correlational research can also be used to bust myths and remove unhelpful assumptions.

For example, a correlational study by Stanley (2011) explored the relationship between corporate social responsibility and financial performance, using quantitative data to challenge assumptions that socially responsible behavior is negatively associated with financial success in business.

Combined qualitative and quantitative research methods

Mixed mode research.

Mixed mode is a form of business research that combines quantitative and qualitative research methods in a single research project. Qualitative business research can be used in an exploratory way to uncover the questions that should be addressed more deeply. Quantitative research is used to investigate specific research questions arising from the qualitative study. Then, a second round of qualitative research might be used to add depth and nuance to the quantitative verdict, bringing the insights to life.

Survey research

Surveys are a staple among business research methods, as well as being to collect data in other forms of research such as academic studies. A survey can generate both qualitative and quantitative data, depending on the question formats used. It’s a familiar format for most people, and can be taken in a variety of formats from online surveys to telephone surveys. This makes it a very inclusive method, giving you maximum access to your target audience. Survey business research can be used for everything from customer satisfaction to concept testing.

Today’s technology means that surveys can be integrated right into the experiences they’re measuring. This helps offset some of the weaknesses of the survey method, such as participants misremembering or generalizing their experiences, or forgetting details because of the time lag between the events being studied and the participant taking the survey.

For example, Virgin Media used on page surveys to gather user feedback from website customers who had abandoned their carts. These in-the-moment insights helped them not only to understand the customer pain points , but to put them right quickly and efficiently.

Case study research

In case study research, the emphasis is on depth rather than breadth. Researchers explore a particular phenomenon in situ, looking at how a group or organization behaved in a specific time and place, and what happened as a result. It is both a quantitative research method and a qualitative research method, as the research involves both types of data.

Case study research can be very helpful in business, as it offers an opportunity to learn how other companies approached a challenge you might be facing, and to learn from the solutions they devised and the obstacles they faced. However, this research method does require care and attention on the part of the researcher to make sure the research involves relevant cases. They must fully understand the similarities and differences between their own business goals and the situation being explored, in order to avoid incorrectly assuming equivalence and coming to faulty conclusions.

Case study research really comes into its own in emerging areas where best practice approaches are not yet firmly established.

For example, Urbaniti et al. (2020) conducted case study research on circular economy practices in multiple European manufacturing businesses. They noted different managers’ peculiar and innovative approaches to achieving the circular economy business model, taking into account environmental factors like legislation which helped shape the approaches.

Free eBook: The ultimate guide to conducting market research

Related resources

Qualitative research interviews 11 min read, market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, request demo.

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8 Ways Market Research Can Help You Grow Your Business

research can help business organization to

You’ve probably heard about market research a million times now. That’s because every business needs to conduct successful market research to get a proper understanding of their customers, prospects, suppliers, competitors, and many other factors.     

Several essential elements like competitors, potential customers, and other market players, when combined, make up a market. You need to effectively research this market to spot customer perspectives, buying patterns, and market trends to stay ahead of the curve.

According to Uplers , 90% of the agencies that saw an increase in leads were actively spending on market research via multiple channels. Out of those, 29% were small-scale businesses. 

Successful businesses conduct market research for various purposes, including:

  • Identifying potential customers
  • Learning more about existing customers
  • Uncovering new markets
  • Analyzing the level of competition.
  • Make informed decisions with their products and services.

At this point, you probably find market research a bit overwhelming and obscure. 

But the benefits of market research lie in making sense of this obscurity. We will take this opportunity to separate fact from fiction and give you a crystal clear picture of how successful market research drives business growth. 

You can’t base research on just hypotheses and assumptions. That’s a recipe for disaster right there. Instead, learning from customers is the best way to go about it to respond to their needs and wants. After reading this blog, you’ll understand how this works and how you can have a kickass market research program to make your business grow.  

What do you mean by Market Research?

Market research can be defined as a process that aims to determine the viability of a product or service in a specific market with the help of research conducted directly with potential customers. The market research also allows the organization to better understand its target market by uncovering opinions and insights from customers about their preferences and interests. 

Market research can either be conducted by organizations in-house or outsourced to other organizations specializing in market research.

Importance of Market Research

We earlier mentioned that market research questions provide important data for different operations like product development, marketing campaigns, sales pipeline, and more.

But to what extent?

Let’s break it down to individual processes and understand the impact customer insights from your market analysis survey can have on them:

To Know Your Target Market

Understanding your target audience is the fundamental aspect of market research, be it a new target market or existing customers. If you know what marketing research survey questions to ask your target market, you can identify different customer types’ unique traits and preferences.

research can help business organization to

The data can help you segment the users based on demographic, psychographic, geographic, and other attributes. These include their behavior, purchase preferences, age, location, habits, delights, frustrations, and more.

You can then create various customer personas and fuel your sales strategies to maximize ROI.

Case study – How Avis increased its revenue per customer

Avis, a leading car rental company, was looking to enhance customer experience by offering useful car add-ons like navigation systems, child seats, insurance, etc., to customers with their booking. So, it reached out to AWA Digital to find a way to promote these products and increase its sales.

AWA digital implemented customer research campaigns using targeted surveys to determine which add-ons were popular among the customers and why. 

Using these insights, the team added an interstitial pop-up just before the booking page to show relevant add-ons to the customers.

This simple update dramatically increased the sales of add-on items and helped Avis generate more revenue per customer.

Read the entire case study here .

2. To Plan the Product Roadmap

A product roadmap is a visual representation of the current status of your product and planned updates over time. It shows a high-level summary of planned activities and priorities for different teams to take the product to the next level.

Steve Jobs famously said – “You’ve got to start with the customer experience and work backward to the technology. You can’t start with the technology then try to figure out where to sell it.”

And market research helps to align your product strategies with customer demand. Using targeted marketing survey questions, you can gauge what new features or functionality customers want to see in your products.

It helps to plan product development strategies based on customers’ consensus to prioritize the ideas that can have the most impact on customers and replace intuition-based approaches with data-backed decisions.

research can help business organization to

Customers’ demands change with market trends and technological advancements. That’s why your product map also needs to evolve constantly with time to reflect these changes in your product development cycle.

By designing targeted market research questions to ask the customers, you can uncover their expectations to deliver optimal product solutions. 

That’s what our next case study demonstrates.

Case study – How customer research drives Twilio’s operations  

Twilio, a cloud communications platform places customer discovery and research at the core of their product development strategies. It helps its teams to anticipate customer needs in a constantly changing market.

Lack of time and budget are the two biggest challenges that the company faces in its product development cycle. So, the team uses a targeted market research questionnaire for a product to understand the challenges the customers face today and the ones they will face tomorrow. 

research can help business organization to

With an abundance of ideas and no time to test them all, the feedback data from surveys is used to prioritize the hypotheses to run the tests . It makes the process more efficient and effective in producing positive results. 

This data-backed approach is used across 18 different teams at Twilio to release new functionality every week and deliver optimal solutions to the clients.

Read the complete case study here .

3. To Reduce Acquisition Costs

Your customer base consists of multiple customer segments with different preferences and purchase potential. That’s why you cannot sell to everyone and need to find the right audience for your products.

If an acquired customer doesn’t bring in more revenue than it costs to acquire them, it will increase your acquisition costs over time.

We don’t want that, do we?

For example, let’s say you are targeting the entire market population using the same campaign. If your acquisition cost per customer is $300 and you acquire 20 customers from one campaign, you need to make more than $6000 to register profits.

The difficulty is you don’t know about these customers’ purchase behavior and capacity, so you cannot be sure if you will reach your goals. It adds unnecessary risks to your marketing ventures.

But, if you were targeting a specific segment with high income, regular shopping habits, or proven history of brand loyalty, You can obtain better results.

Now, the question is – 

How will you separate these potential long-term customers from one-time buyers and high-value targets from other segments?

One way to do this is by building customer personas using the data from the market research survey questions. A buyer persona defines different attributes of a particular customer segment so you can hone in on the right audience to funnel your marketing efforts.

Here’s what a typical persona includes:

  • Target regions
  • Target demographic (age, marital status, gender)
  • Ideal psychographics (hobbies, social channels, activities they indulge in, goals)
  • Preferred interaction channels
  • Favorite brands and products
  • Total revenue till date
  • Estimated lifetime value

research can help business organization to

Once you have a clearer picture of different customers, you can find high-value prospects with the potential to be long-term customers looking for product solutions that your business offers. 

You can then design the correct pitch using the market research data to bring in these customers and control the overall acquisition costs.

For example:

  • Plugin the demographic and psychographic data into CRM software like BIGContacts or Salesforce to convert high-value targets.
  • Use your CRM to create segmented lists of prospects based on estimated value, location, current status, and more. Then target these groups individually with personalized value propositions to increase conversion rates.
  • Identify their preferred mode of communication and technographic inclinations to find the right opportunities to pitch your product offering at the precise moment.

Even if acquiring and retaining such customers costs more, their overall revenue can balance the acquisition costs to deliver higher profits.

4. To Design Targeted Marketing Campaigns

By knowing how your target audience behaves and interacts with your business, you can find the exact opportunities to target them with personalized campaigns.

research can help business organization to

  • You can use mail campaigns to target website users with app-exclusive offers to encourage them to download your app and improve app adoption.
  • Add in-app broadcast messages about upcoming offers, exclusive membership benefits, and other incentives for new users to push them towards the end of the funnel.
  • Create multiple landing pages to target different customer types.
  • Design location-based ad campaigns with personalized value propositions based on audience preferences and problems at each location. 

Case Study – How Canon’s campaigns generated 700% ROI

AWA digital was tasked by Canon, one of the biggest electronics companies worldwide, to assess and increase the demand for their products in different geographies. So, the AWA team conducted customer research using target market survey questions and discovered the following attributes about customers’ purchase behavior and reservations:

  • In some regions, people were reluctant to spend money on a Canon camera as they weren’t sure if Canon was an authoritative brand.
  • In other regions, authority was not as important to the users.

Using these insights, AWA optimized the ads campaigns’ messaging for different locations to include what consumers deemed important purchase factors.

The results?

With in-depth customer feedback, Canon generated an overall ROI of 700% in all regions using personalized campaigns to target the audience.

5. To Improve Brand Awareness

Whether you are into soft drinks or not, You probably would have heard of Coca-Cola’s 2011 Share-A-Coke ad. This single campaign put the Coke brand back on the map and reversed the 10-year steady decline in sales in the US.  

Coke understood what motivates their customers and delivered a product offering that appealed to the masses to increase its brand equity- the excitement to get a Coca-Cola bottle with their name on it.

How did they do it?

In 2011, Coca-Cola rolled out its share-a-coke campaign in Australia. The company debranded the traditional Coke logo from the bottle and replaced it with the phrase “Share a Coke with” followed by a name.

research can help business organization to

The campaign used the list of the country’s most popular names (nicknames). The purpose was to make people go out and find the Coke bottle with their name on it and share it with their friends. The campaign was subsequently rolled out in 80 countries.

How did it impact Coca-Cola as a brand:

  • In Australia, it’s estimated that the campaign increased Coke’s share by 4% and increased consumption among young adults by 7%.
  • #ShareACoke became the top trending hashtag on Twitter globally and received over 1 billion impressions.
  • In the USA, the campaign increased Coke’s market share by over 2% and brought 11% more sales compared to the previous year.

It’s not limited to big brands only.  

Understanding the customers and placing your product’s value offering along with their habits, lifestyle, and behavior can help you extend your brand’s reach.

Today, there are multiple touchpoints to connect with your customers and map their journey to uncover their issues, motivations, and fears to address in your campaigns.

  • Monitor brand mentions on social media and engage with the users to cultivate an online community and promote your brand.
  • Reach out to satisfied customers and turn them into your brand ambassadors.
  • Use targeted ad campaigns that connect people’s emotions and general behavior to imprint your brand’s image in their minds.

Types of Market Research

Any research you are planning to conduct can always be clubbed into one of the four main types of research. These types are:

1. Primary Research

Primary research stands for the type of research where first-hand data and information is collected. The researcher acquires this type of data without using or citing any other sources. Primary research involves indulging with the respondents at different levels to gather information . 

Examples of primary research include:

  • Focus groups

research can help business organization to

2. Secondary Research

Unlike primary research, secondary research involves gathering second-party or third-party information from different sources. 

This type of data already exists in the market, and the researchers have to look for suitable sources to uncover the data that will be relevant to them . 

To give you a perspective, Uplers conducted a study to show the ‘Impact of Covid-19 on digital agencies’, which involved the data from 130+ organizations. A survey report was then created for the same.

The below infographic depicts how Covid-19 has impacted the approach of organizations towards outsourcing. The report, published online by Uplers, uses data from already conducted research. Hence it can be termed secondary research. 

research can help business organization to

Examples of secondary research include:

  • Online sources
  • Infographics

3. Quantitative Research

Quantitative research involves collecting numerical data for the purpose of statistical analysis. 

Unlike qualitative research, this involves gathering accurate and quantifiable data that marketers can use to find patterns and averages, test hypotheses and relationships, make predictions, and generalize results to a broader population . 

research can help business organization to

Like qualitative research, quantitative research can also be primary and secondary but is specifically tailored to collect numeric data and responses. Quantitative data collecting methods involve:

  • Controlled or manipulated experiments
  • Systematic observation
  • Secondary research

4. Qualitative Research

When the data collected cannot be measured or quantified; it can be termed qualitative research. Qualitative research can be both primary or secondary and involves a firm understanding of the respondents’ concepts, opinions, and experiences. 

It also aims at finding out and analyzing consumer behavior that is entirely subjective and cannot be quantified for assessment. 

Quantitative research will help you discover what’s happening while qualitative research will help you uncover why it’s happening to give you the right insights in market research.

Qualitative Research

Qualitative research involves asking questions like:

  • What made you buy our product?
  • How satisfied were you with our product/service?
  • What features did you like about our product/service?
  • Would you consider recommending our brand to your family and friends?

Now that we know about the different types of research, let’s take a look at the role of customer feedback in market research.

The Fundamentals of Feedback and Surveys

Collecting feedback from customers is one of the most important things you can do as a business owner. Feedback gathered as part of market research helps you in product development, conducting business operations, and launching marketing campaigns, yet it remains one of the most overlooked activities in the business. 

Here are five reasons why you should focus on collecting customer feedback:

  • Understanding your customers
  • Engaging with your customers
  • Product development and improvement
  • Acquiring positive testimonials and reviews
  • Evaluation and moving forward.

But did you know, surveys are an excellent way to collect feedback ?

Surveys are arguably the best and most effective way of collecting genuine feedback, reviews, and testimonials from customers. 

This information is especially important for businesses. 

Because business owners can assess customer feedback and identify bottlenecks and deficiencies in their products and services to improve their offering and elevate the customer experience. 

Survey responses can provoke or confirm strategic business decisions by providing unbiased data to guide decision-making. Customer feedback collected from research surveys indicates what they think and feel about your brand.

But surveys don’t work in isolation. 

It would be best if you had a comprehensive online feedback tool to collect all sorts of data from all sorts of respondents. Using a carefully designed survey will uncover insights that will prove to be crucial for your business at multiple levels. 

research can help business organization to

For instance: Qualaroo is one of the best online market research and customer feedback tools out there in the market. With its easy-to-use interface and professionally designed research templates , you can set up your surveys and start collecting feedback within minutes. It also supports advanced targeting that allows you to segment your audience and conduct research strategically. 

Qualaroo also offers some of the best research functionalities in the form of NPS, CSAT , CES , and UX surveys to:

  • Test prototypes for new product launches 
  • Analyze customer sentiments with Voice of Customer surveys to improve customer experience
  • Create buyer personas to understand your perspective customers’ needs & wants
  • Develop customer journey maps to learn where to capture their interest and solve their pain points
  • Develop hypotheses to conduct A/B testing for Conversion Rate Optimization and more.
  • To know more about why feedback and surveys are important, take a look at

Related Read – Benefits of Customer Feedback: 3 Reasons Why You Can’t Ignore It

Market Research Case Studies: Learn From the Best

Companies all around the globe conduct business market research at various magnitudes, and they are highly dependent on a well-rounded research process. Here are some of the most prominent organizations with their market research success examples:

1. Starbucks Coffee Company

Starbucks is not only the largest and the most successful coffee brand in the world but also the most popular name that comes up whenever you think of coffee. A major part of their success story is backed by successful market research practices.

However, much of their secret to reaching this position can be delegated to the value of their successful market research. 

Starbucks’s market research approach includes:

  • Tracking cultural trends
  • Gathering customer feedback
  • Monitoring social media
  • Regular product testing

research can help business organization to

Over the past decade, Starbucks has deployed its own ‘My Starbucks Idea Platform’ to conduct market research by gathering customer feedback. This platform allows their customers to freely pitch new ideas or modify existing products without any limitations.

This is how Starbucks’ innovation and product development are fueled by always keeping in mind the customer’s perspective, and the company has presented one of the biggest market research success examples.

2. Apple Inc.

Apple is the most successful technology company that has ever existed, and they made it possible by constant product innovation, market research, and understanding what their customers want

research can help business organization to

Apple deeply appreciates their market research business, and they have actively demonstrated it through their in-house research team. Apple’s research panel is called “Apple Customer Pulse”, an online community dedicated to catering to the needs of consumers through data analytics. 

Apple focuses on increasing customer loyalty and retention through successful market research and increasing its NPS score at the same time. 

This is done primarily through:

  • Relieving purchase anxiety from customers
  • Paying great attention to details
  • Delivering value and not just the product
  • Collecting feedback at every step

As a result, Apple was able to reach an NPS score of 72 in 2017, which is much higher than the global average. 

Apple conducts research through multiple online survey platforms. As a result, they have effectively laid the foundation for new product development and modification to their existing products for a better user experience.

Twilio is an American cloud communication platform that works in an ever-evolving market. To expand under such circumstances, the organization has integrated market research as its core business strategy to match the pace with the oncoming challenges. 

Anticipating customer needs and critically understanding them is the critical focus of Twilio as it defines its overall business strategy. 

research can help business organization to

Twilio deployed Qualaroo as their market research tool to directly connect with the customers and collect feedback seamlessly. The organization then used the data to test different hypotheses and came up with the best possible alternative. 

Here’s how Twilio conducts market research using Qualaroo:

  • Asking specific consumers about how they would like to achieve their objectives.
  • Planning for user testing and product feedback interviews for the customers.
  • Collecting data that is to be shared between groups to account for differences in opinions.
  • Providing step-by-step guidance about the type of support that new customers will receive. 

Conducting market research using Qualaroo allowed Twilio teams to ditch opinion-based ideas and jump to data-based insights in no time. Overall, this made the customer discovery process much more efficient and increased the chances of yielding a positive result. 

Related Read: Case Study- Twilio’s Process for Studying Customers

Market Research Questions You Need to Ask

An effective way of scaling your market research for business is by knowing what questions to ask at what point in time. Right questions targeted at the right people at the right time will deliver much better results. Here are some examples:

How your customers found out about you

  • How did you first hear about us?
  • What made you choose us?
  • How did you find our website?
  • What search term did you use to find us?

Purpose of their visit

  • What brings you to our website today?
  • What were you hoping to find on this website?
  • What products/services are you looking for?

Uncover reasons behind bounce rate

  • Does this website meet your expectations?
  • Did you find what you were looking for?
  • Would you revisit this website in the future?
  • Was our pricing compelling to you?
  • Do you think our prices justify the value we deliver?
  • Would you consider placing an order at this price?

Online visibility

  • Have you heard our brand name before?
  • When was the first time you heard about our brand?
  • Do you recall seeing an advertisement for our brand before?

Related Read – If you want a more detailed list of survey questions, you can find it at What Survey Questions Should I Ask?

How Can Market Research Help Grow Your Business

Now that you know the different uses of market research and how important it can be for business owners and organizations, let’s look at how it will help you grow your business.

1. Provides Competitive Advantage

Businesses worldwide are facing considerable challenges in the form of new market entrants, which is significantly surging the risks of losing market share and an overall drop in business. 

Businesses conduct thorough research of their target markets by analyzing customer demographics, historical sales data, and companies performing well to understand their position in the market. 

The most common form of market research is competitor analysis that every business conducts at some point.  

Here, the marketing team of the companies build a definitive list of all the competitors in the target market and then determine their strengths and weaknesses, which your business can capitalize on. 

Here are some of the details that you can research about your competitors:

  • Sales volume
  • Market share
  • Suppliers 
  • Strengths and weaknesses
  • Your window of opportunity for market entry
  • The importance of your target market to your competitors
  • Any barriers that may stop you from entering the market
  • Indirect or secondary competitors who may impact your business

By having a clear picture of the companies that lead your industry and with a bit of digging, you can effectively exploit their vulnerabilities and gather market share by your superior offering.

Finding out Voice of Customer will help you even further as it represents the collective sentiments of how your customers perceive the value of your product and services. 

Voice of Customers acts as a market response to your offerings, and you can use it to optimize your website, improve your customer service and announce new product features and service plans. It will also help you in better positioning yourself in the market with respect to your competitors.

2. Helps Identify Opportunities in the Marketplace

Effective market research widens your perspective and opens you up to new opportunities available in the market. 

For instance: you can quickly uncover new geographic regions for expansion and test market readiness for a new product by gathering data about customer preferences, product availability, rate of adoption, and many other factors. 

Existing data can be gathered and analyzed to capture the possible opportunities like government publications, previous reports, and statistics. The information that would be useful in identifying opportunities includes:

  • Market size
  • Potential market share
  • Demographics
  • Major suppliers
  • Market competitors
  • Market dynamics

Getting data about the market is the first stepping stone towards the expansion process of both the market and the product line . Successful market research will effectively help you size up the market and determine the optimal business strategy for maximum impact. 

3. Helps in Testing for Success

Testing for success simply means determining whether or not your new product/service will connect with your audience. 

Business market research is an effective way of doing that because you can test your ideas before you go pedal to the metal with them. 

Businesses can easily identify which product concepts and campaigns truly resonate with the audience by asking their opinions and preferences through surveys. This will allow the business to ensure success the first time around and save money from potential losses. 

For instance: the image below depicts that before the full-scale launch of your software product, you can conduct a pilot test to check the viability of your application and ensure that everything is in place.

Gathering a group of users and allowing them to test every feature is an effective way to minimize or terminate any shortcomings you may have had before. 

 Helps in Testing for Success

Here is a list of things to keep in mind before you test your concept:

  • Create a detailed list of concept testing questions 
  • Conduct your share of secondary research before you ask your questions
  • Contact publications and trade associations to see if a similar concept had surfaced before and collect all the available data
  • Get a broader sample audience for more accurate and reliable data.

The bottom line is that testing your idea before its full-scale launch is the ideal step to take. It is a ‘sure shot’ way of affirming that your product will yield the desired results once it is launched, resulting in significant business growth. 

Watch: Building a brand using feedback and user research

4. Provides a Better Understanding of Your Customers

A key factor for the success of every business consists of a proper understanding of the target market and the customers to reach them in a much better way. Gathering customer insights delivers a wealth of information to marketers, including purchase trends and high-selling services in various demographic regions. 

Market research will help you assess this information and anticipate what the customers are looking for and how the market will react or shift in the near future. 

Here are some of the customer information that you should typically look to answer while conducting market research:

  • How old are they?
  • Are they male or female?
  • Where are they located?
  • What is their family income?
  • Do they have children?
  • What is their marital status?

Successful market research will easily help you identify every detail about your targeted customers, using which you can effectively plan your strategy. 

Even if you have an established business, paying close attention to your customers will help you promptly identify rapidly changing customer needs and market trends. This can give you a significant advantage over the competition. 

The deployment of Customer Relationship Management or CRM systems helps marketers get a better sense of their target audience, find new customers, and identify audience trends and patterns for marketing campaigns.

To do this, you can deploy CRM software for small business like BIGContacts that’s specifically designed to simplify CRM, email, and contact management, allowing small teams to grow their business. It allows you to track sales pipeline and commissions, automate marketing and sales emails and customize as per your sales process.  

Therefore, better contact management and customer relationship will give you a much better understanding of your customers.

5. Develop Relevant Products and Services

As the old saying goes, ‘Change is the only true constant.’  And this stands very well in the 21 st century for businesses and the marketing industry globally. In simple terms, all businesses need to anticipate and adapt to the rapid changes to stay relevant in the market.

Market research greatly supports this cause by identifying the customers’ evolving needs and analyzing how the competition is reacting to the change. This will help you better strategize your new products and services to gain a competitive edge over the other market players while ensuring longevity.

For instance: the growing environmental and sustainability concerns have led almost all the major automobile brands to transition towards electrically powered vehicles. Customer feedback allowed automobile manufacturers to uncover the growing reluctance in consumers towards purchasing Petrol and Diesel cars. It also helped uncover the shift in preference towards clean energy, which made the transition happen. 

Market research helped the automobile industry adapt to this significant power source change and develop vehicles by highlighting the general consensus and the cause supported by the majority. 

Two prime examples of not adapting to change come from previous market leaders like Blackberry and Kodak. The companies failed to take advantage of proper market research to develop relevant software and hardware for their customers. They didn’t adapt to the changing technology, which resulted in them losing almost all of their market share.

The quickest way to understand the market and ensure relevancy is to run a tracking or index survey. Running these surveys on a regular basis and analyzing them through the reporting system will let you quickly catch the upcoming customer needs so that you can tailor your products and services accordingly. 

Watch: How to Create a User Research Survey

Bonus Read: How to Create a Survey – Detailed Guide

6. Spot Emerging Trends

Market changes are so rapid that keeping pace with them is not an easy task. 

Market research for businesses is conducted not just to analyze the size of the market but also to determine if the market is trending up or down. 

Businesses should acknowledge that they have to move with the times to stay ahead of the competition and ensure long-term business planning in an ever-changing industry. 

This is where market trend analysis is used. 

Marketers study and compare the industry data over a set period to recognize any consistent trends that could prove to be helpful in mapping business strategy. Market trend analysis is a significant part of market analysis, and there are a few things to keep in mind while conducting market trend analysis: 

  • Keep track of publications and industry influencers
  • Go through all the relevant industry research and trend reports
  • Deploy any available analysis tool to determine industry behavior accurately
  • Always listen to your customers
  • Observe your competition

Consumer habits and behavior heavily influence market trends, and one cannot simply predict where the trend line would go. Conducting market trend analysis by analyzing industry data is crucial to pinpoint the trends accurately and spot newly emerging trends for continuous business growth. 

7. Helps in Minimizing Risk

Doing business without any market research is like sailing without a compass. 

Successful market research is a catalyst that helps reduce the risk by identifying options, increasing confidence, and also providing an objective perspective to grow your enterprise. And when you are armed with research, you can take even more necessary risks to grow your business. 

Market research also proves beneficial in tumultuous times because expert industry analysis can help you dodge costly mistakes and even forecast potential market fluctuations to save your finances.

Minimizing risk through business market research is primarily dependent on two factors:

  • Finding the right approach to conduct market research
  • Assessing cost-effective research

By having the correct data at your disposal, you will be better equipped to evaluate potential risks and make decisions that will pay off in the grand scheme of things. Even the data from customers who leave can be beneficial in understanding what went wrong and what can be improved. 

Market research is extremely crucial when you’re facing a ‘make or break’ situation like a new product launch expanding into new markets. You can’t jump into it and neither can you wait for years to learn how to do the right thing by simply hypothesizing.  Which is why having a good idea of what the customers may want help in modifying the offerings to retain them.

Popular online popup tools like Picreel are designed to do just that. Designed to capture leads even from prospects who are leaving, it helps you identify your most profitable segments and even set up A/B testing to find out exactly what they respond to.

When you have gather the right data using Picreel, you can create customized campaigns to target the right users and maximize conversions. 

Watch: How Picreel helps engage and gather data

8. Helps in Evaluating Business Success

Whether you have a newly started business forming an LLC in your state or are in the expansion stage, successful market research will help you at every stage.

It includes understanding the vital components of your target market to increase your profits, sales revenue, return on investment, and overall business success. 

Market research for businesses uncovers details about several crucial factors for marketers to understand to capitalize on them for better results. These factors include:

  • Insights into existing customers
  • Customer behavior 
  • Customer needs
  • Identifying opportunities 
  • Resolving conflicts and issues

Researching data about all the above factors can help you develop product and service pricing, distribution, advertising, logistics, and many more. Also, market research will accurately guide you in starting, diversifying, or reducing business activities. You can then compare the results to the historic data for assessing or evaluating the overall business success.

Rewrite Your Business Growth Story With Market Research

Markets are rapidly evolving worldwide, and businesses need to match the pace of this evolution now more than ever. Market research is one way of doing that. 

But that’s not the only reason because market research also ensures the business’s longevity by minimizing risks and identifying shortcomings. Keeping everything in mind, there are plenty of benefits of market research that businesses of all scales can benefit from.

If you need help with your market research efforts, Qualaroo is here to help you deploy surveys that give you actionable insights by asking the right users the right questions at the right time.

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Why Market Research Is Important for Strategic Decision Making

by Sarah Schmidt , on May 29, 2018

why is market research important

Consider the following scenarios:

  • A CEO who is thinking about making a large acquisition to enter a new market
  • A product developer working to stay ahead of shifting trends
  • A management consultant advising a client on how to reboot their business
  • A brand manager creating buyer personas to shape marketing efforts
  • An entrepreneur building a pitch to secure funding from venture capitalists

Each of these individuals may have previous experiences and gut instincts that inform their thinking and planning, but they must also incorporate high-quality data and analysis into their decision-making process in order to understand the bigger picture, persuade key stakeholders, and back up their conclusions.

Risk is inherent in each of these situations, and a fumble at the wrong moment can lead to serious consequences for an individual’s career success and a company’s longevity. When the competition is fierce and the margin of error is thin, relying on faulty assumptions can be fatal.

As we explore in the white paper The Importance of Market Research for Validation and Decision Making , high-quality industry research can mitigate these risks by helping to test your hypotheses, validate your insights, and build your sense of confidence.

Why You Need an Outside Point of View

Since 2000, more than half of the companies in the Fortune 500 have merged, gone bankrupt, or been acquired, according to Forbes . A new generation of innovative companies has sprung up, creating unique business paradigms for the organizations of tomorrow.

In this volatile environment, it’s not enough to just predict or forecast within the existing scope of business (though you should). To avoid getting “Ubered” like the cab industry, companies must leverage accurate data and qualitative assessments about the industry direction and identify gaping holes in customer satisfaction that outsiders may prey on. Rigorous analysis should be used to drive decision making and adapt in a timely manner, and in this regard, third-party market research can protect you in more ways than one.

Market research can open your eyes to products and trends beyond your own company and help you become more aware of influential variables such as:

  • New technology
  • Rising competitors
  • Shifting consumer preferences
  • Socio-economic changes
  • New regulations
  • Growing and shrinking markets
  • Potential new partners and suppliers

With adequate research, you can seize valuable opportunities for product development and new market entry. You can also make more prudent investments — increasing spending on markets that still have room for growth and re-evaluating investments in markets with lower demand.

Market research can also give you the foundation you need to make other pivotal shifts in your business. For example, you may find that you need to build new external partnerships to quickly adapt to technological changes (such as cloud computing, virtual reality, or automation), or it may be in the best interest of your company to acquire a start-up to maintain a foothold in an evolving industry (such as Walmart acquiring Jet.com to boost its e-commerce side of the business).

Making smart business decisions — and gaining buy-in from stakeholders along the way — is much easier when you have credible evidence to back up your strategies.

Interested to learn more? Download MarketResearch.com's free white paper for more practical insights and recommendations.

The Importance of Market Research for Validation and Decision Making

Additional Articles

  • What Is a Market Analysis?
  • 5 Benefits of Market Research Reports
  • The Power of Market Research: One MBA Student's Story

Download "The 5 Keys to Estimating Market Sizing for Strategic Decision Making"

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Why Isn't Business Research More Relevant to Business Practitioners?

Like many business leaders, Donovan Neale-May routinely seeks out information on business innovation and management trends. He reads reports from market analysis firms, white papers from companies in his field, and articles in online trade magazines. But he rarely bothers with academic business journals.

“Academic research can be helpful, but it tends to be overly complex, hard to digest, and not backed by real quantitative insights from customer populations or engagements,” says Neale-May, executive director of the Chief Marketing Officer (CMO) Council, a global affinity network of more than 10,000 senior marketing executives based in San Jose, California. “There is often a disconnect between practitioners and academics, who tend to be far removed from operational complexities and market dynamics.”

research can help business organization to

Neale-May illustrates a pervasive paradox in academia: Research conducted at business schools often offers no obvious value to people who actually work in the world of business. Contrast this with other scientific disciplines, where academic research is leading to the development of a second skin that could improve drug delivery or alerting farmers and scientists on how to reduce nitrous oxide emissions from agricultural farming.

Harvard Business School’s Michael W. Toffel addresses this issue in Enhancing the Practical Relevance of Research , forthcoming in Production and Operations Management . “This is my soapbox message to academics: be more relevant,” says Toffel, the Senator John Heinz Professor of Environmental Management and faculty chair of the HBS Business and Environment Initiative.

“The lack of practical relevance of much of our research might suggest that few of us also have the ambition to improve the decisions of the managers and policymakers whose actions we study”

Toffel’s paper serves as a call to arms for scholars to conduct research that matters to managers and policymakers. “Most [business scholars] would agree that our primary duties include teaching our students and generating new knowledge in our research,” writes Toffel. “But the lack of practical relevance of much of our research might suggest that few of us also have the ambition to improve the decisions of the managers and policymakers whose actions we study.”

The consequence of the lack of relevant research is that the business world—and the rest of the world, for that matter—is losing out on some serious brainpower and analytical reason.

Consider the 2014 New York Times op-ed titled “Professors, We Need You,” in which Nicholas Kristof wrote, “Some of the smartest thinkers on problems at home and around the world are university professors, but most of them just don’t matter in today’s great debates.”

Or the 2015 Chronicle of Higher Education commentary, “Isolated Scholars: Making Bricks, Not Shaping Policy,” in which University of Michigan Professor Andrew J. Hoffman wrote, “One of the reasons (among many) that the public discourse on critical scientific issues of our day has become so confused is that too many academics, according to a 2014 study by John Besley in Science and Public Policy , do not see their role ‘as an enabler of direct public participation in decision-making through formats such as deliberative meetings, and do not believe there are personal benefits for investing in these activities.’ And yet if society is to make wise choices, those who create knowledge must move it beyond the ivory tower.”

The priority paradox

So why aren’t more scholars at business schools striving to make their work practically relevant? One reason is that for many, working on relevant problems has little impact on faculty members’ academic success. When it comes to making tenure, budding professors are evaluated in part on the number of papers they publish in peer-reviewed journals. Primarily written for and read by other academics, many of those journals tend to reward novelty over applicability.

In academia, “basic” research sets out to increase general knowledge of how the world works, while “applied” research sets out specifically to address a practical problem, with the intent of solving it.

That poses a potential dilemma for scholars who want to influence business practice and achieve the requisite journal publications for a successful academic career. But that balance, while challenging, is achievable.

Take HBS colleague Benjamin G. Edelman, an expert in online markets whose research focuses on consumer protection related to online businesses. “My research is made better by choosing questions that are relevant to practitioners,” says Edelman, an associate professor in the Negotiation, Organizations & Markets (NOM) unit. “My intended audience includes managers at companies as well as policymakers and regulators—seeking to inform and, to be sure, persuade these folks.”

In the course of his research, Edelman has exposed numerous privacy violations by Google, led successful fights against adware and spyware companies, and coauthored multiple studies that revealed racial discrimination among Airbnb hosts and guests. He also has published numerous articles in top academic journals.

That said, he has received his share of rejection letters from journal editors who deemed his work “excessively applied.”

“It’s surely true that many academics hesitate to prepare research that is relevant to, and accessible to, practitioners,” he says. “Junior academics have to consider journal priorities in light of the unavoidable pressure to publish in top journals. Write articles that journals don’t like, then you won’t get published in top journals and be an academic for long!”

Research that targets a specific business problem runs the risk of appearing too narrow in focus to editors of general-purpose disciplinary journals, which, in the field of academia, are considered to be especially important.

“I have had papers rejected because they are ‘of interest to a specialized audience and not to a general audience,’” says Shane Greenstein, the MBA Class of 1957 Professor of Business Administration and co-chair of the HBS Digital Initiative. “The problem faced by much applied work is the forum. It often gets relegated to specialty journals, and those are considered less prestigious in some disciplines.”

That is an issue faced by researchers from many disciplines—including economics, psychology, sociology—when they do applied work, Greenstein says.

The importance of spending time with business practitioners

However, novelty and relevance need not be mutually exclusive. In “Enhancing the Practical Relevance of Research,” Toffel argues that steering research toward real-world business problems can yield both.

“Engaging with practitioners to develop relevant research not only helps improve the research, but also increases the likelihood that practitioners will subsequently read and appreciate a translation of that work,” Toffel writes. “This can yield practitioner inquiries that can, in turn, provide access to new field sites and new datasets, including proprietary data that has never been shared with scholars before and can lead to novel lines of inquiry.”

research can help business organization to

Toffel, whose own research examines how companies and regulators can improve environmental management and occupational safety, offers several suggestions for how scholars can steer their research toward real-world business problems. It starts with climbing down from the ivory tower and actually spending time with business practitioners: inviting them to meet on campus, attending industry conferences, visiting their companies, interviewing them, developing a practitioner advisory team, and maybe spending some time working as a practitioner. (For his own part, Toffel worked as director of environment, health, and safety at Jebsen & Jessen, a Singapore-based manufacturing and engineering firm, before pursuing a full-time career in academia.)

That all takes time, of course, but Toffel argues that it’s time well spent. “Given the substantial time we already invest in any research project, a few days of due diligence does not seem too high a price to pay, even in one’s pre-tenure years when the opportunity cost of time seems especially high,” he writes.

Colleague David A. Moss concurs. “The first priority should always be to identify truly important problems to work on,” says Moss, the Paul Whiton Cherington Professor of Business Administration at HBS and founder of the Tobin Project , an independent, interdisciplinary initiative that uses academic research to tackle massive real-world problems like economic inequality, national security, and government regulation. “We’ve found that working with practitioners can be enormously productive in helping to identify critical real-world problems as the basis for new research.”

“I can’t help people if they don’t know about my work”

Interacting with business practitioners is especially helpful in garnering new ideas for behavioral scientists like Francesca Gino, whose research deals with the reality that humans are often irrational—and the fact that the logic of real-world decisions therefore sometimes flies in the face of established economic theory.

“Most of my research projects are motivated by puzzles or strange patterns of behavior I see in the real world,” says Gino, the Tandon Family Professor of Business Administration at HBS. “I’ve looked at questions like, Why is it that people often end up behaving in ways that are contrary to what they set out to do , despite their good intentions? Why is it that so many people are disengaged at work? What can leaders do to keep them engaged across time? Why is it that even people who care about morality end up behaving unethically? Why is it that people often feel inauthentic at work? What does that imply for their job satisfaction and productivity?”

Gino was motivated to investigate those questions by what she observed in organizations or society more broadly. “It is key for the research to make its way back to organizations and society: I want the answers to these questions to be known to [business] leaders and policymakers, since they have the power to make changes for the better based on scientific findings.”

In 2012, Gino and several other colleagues published an experimental study showing that organizations can encourage honest reporting on financial documents—for example, expense reports or tax forms—simply by moving the signature line to the top of the form so that signers declare they will tell the truth rather than declaring they have told the truth. In 2014, the White House assembled a cross-agency group called the Social and Behavioral Sciences Team, tasked with improving the efficacy of federal programs by leveraging the findings of behavioral science. The aforementioned study was one of the first that the team employed in a pilot test with the General Services Administration (GSA).

research can help business organization to

Vendors who make sales through the Federal Supply Schedules are required to pay an administrative fee (the Industrial Funding Fee), which is based on a fraction of their self-reported sales. To encourage more accurate self-reporting, the GSA moved the required signature box from the bottom to the top of the online payment form for a random sample of vendors. The result: The government collected an additional $1.59 million in fees within a three-month period. The median self-reported sales amount was $445 higher for those vendors signing at the top of the form.

But research doesn’t have to be explicitly applied research in order to prove practically relevant. In fact, basic research can help to predict—or even to prevent—real-world events years before they happen.

Case in point: In 1996, Max H. Bazerman and several colleagues published “Egocentric Interpretations of Fairness in Asymmetric, Environmental Social Dilemmas: Explaining Harvesting Behavior and the Role of Communication” in the journal Organizational Behavior and Human Decision Processes . The study looked at how individual self-serving biases can blur the judgment of decision-makers, who underestimate their inability to be objective. The core ideas of that basic research led to a 1997 MIT Sloan Management Review article, The Impossibility of Auditor Independence , which argued that “it is psychologically impossible for auditors to maintain their objectivity” and that “cases of audit failure are inevitable, even with the most honest auditors.”

That article “provided the most central criticism of the auditing institution— before Enron failed [in 2001],” says Bazerman, the Jesse Isidor Straus Professor of Business Administration at HBS, whose research focuses on business ethics.

Let business practitioners know the research exists—in language they can understand

That leads to an important point: Once a scholar has conducted research that’s germane to practitioners, it’s important to let practitioners know that the research exists.

“Ultimately, I conduct research to try to help people,” says HBS Assistant Professor Alison Wood Brooks, who studies how emotions influence workplace behavior . “I can’t help people if they don’t know about my work.”

Explaining research in person is one way to reach them.

“I make time to talk to practitioners, presenting at industry conferences, at trade association events, and in webinars; testifying to regulators; and even explaining my work one-on-one to the policy staff trying to apply the ideas,” says Ben Edelman. “It’s a big commitment, but it’s worth it.”

Many business professors do occasional consulting work for large companies, which can prove mutually beneficial in terms of identifying and fixing problems. Gino often delivers keynotes about her research at corporate events, routinely attends practitioner-only conferences, and talks about her research when teaching business leaders in the Executive Education program at HBS. In “Enhancing the Practical Relevance of Research,” Toffel notes that when he and his colleagues presented their research on occupational safety to managers at the Occupational Safety and Health Administration, “both they and we learned a lot.”

And let’s not forget small companies; some 90 percent of businesses in the United States have fewer than 20 employees, according to the Small Business and Entrepreneurship Council. “I think universities cater to recent alums and big corporations,” says Paul Davis, cofounder and CEO of Intelligent Integration Systems, a small, Boston-based analytic software company, who sought feedback from business researchers when the company was starting up in 2005. “We found it was hard for a small [company] to get much attention at big schools.”

Writing is another way to reach practitioners, which requires using language they will understand. Alas, some academic journals discourage plain communication. So while a layperson would undoubtedly understand words like “helpful,” “rule of thumb,” and “tendency to hang out with similar people,” the editor of an academic research journal might prefer the academic terms “prosocial,” “heuristic,” and “homophily”—a word that runs rampant in social science literature, but which gets the red-squiggle-underline treatment in Microsoft Word.

(Case in point, see above: “Egocentric Interpretations of Fairness in Asymmetric, Environmental Social Dilemmas: Explaining Harvesting Behavior and the Role of Communication” vs. “The Impossibility of Auditor Independence.”)

“[Journal] editors and reviewers have sometimes asked me to reduce the use of informal language and substitute ‘scientific’ language,” says Greenstein. “Sometimes it is annoying because the informal writing covers topics that could be useful to others, but that is just the way it goes.”

Time-crunched practitioners who try to read research papers can find themselves thwarted by the obscurity of scholarly language. Consider Christopher Bell, co-founder and CEO of Zoomergy LLC , a software consultancy in Los Angeles. Bell is unusual among business leaders in that he actually seeks out research papers, but only to a point. “Making the leap from the research results to the actions I should take is not often clear,” he says. “And of course, time is limited so if the research is described in peculiar terms only used in a highly subspecialized academic niche, I’m not likely to even get to the conclusion let alone act on it.”

Thus, to reach business practitioners in writing, the best bet may be to write articles for industry trade magazines, mainstream business journals, or op-eds for newspapers, all of which are hurting for good content these days. Researchers who don’t have time to pitch articles to the popular press can post to a personal blog, or, on a less time-consuming scale, provide brief synopses of their research on Facebook, LinkedIn, or Twitter. 

The slideshow below shows three examples in which the findings of an academic paper (top of the slide) were translated into plainer language for a business audience (bottom of the slide). 

Three examples of how academic language was translated into language that appeals to business practitioners.

research can help business organization to

For the past 20 years Greenstein has written a 1,500-word column for IEEE Micro, a bimonthly magazine published by the Institute of Electrical and Electronics Engineers, the world’s largest association of technical professionals. “The email responses can be very interesting and educational,” he says.

Gino has written articles for Harvard Business Review , the New York Times, Scientific American , and Huffington Post , among others—“with some pieces being rejected; that’s par for the course,” she says.

Edelman provides straightforward summaries of his research on his personal website . “I can’t imagine being excited about writing articles read only by other academics,” he says. “I think I could do it. But it wouldn’t get me out of bed in the morning.”

Making research easy to understand is not always easy

French mathematician Blaise Pascal famously wrote, “Je n’ai fait celle-ci plus longue que parce que je n’ai pas eu le loisir de la faire plus courte.” Loosely translated: “I have written a long letter because I didn’t have time to write a short one.” For sure, journal requirements aside, it can be a lot harder for an academic to explain research in layman’s terms than with academic jargon.

“For example, one professional statistician talking to another can cut a lot of corners by using specialized language,” says Greenstein. “It is very efficient. But sometimes it can be hard to explain to a non-statistician. It just is. Good statistics is actually quite challenging to do and explain. Econometrics is hard. That is an explanation, not an excuse.”

Fortunately, for academics, there are resources that can help them translate their research into accessible prose. For HBS professors, of course, there’s Working Knowledge , the publication you’re reading right now. But many general-interest publications employ editors who can help guide the process for scholars to write straightforward pieces about complex research.

Another good option for researchers: making business journalists aware of the research, and encouraging them to write about it themselves, in news articles and feature stories. Talking to journalists is an effective way to publicize research, but there are translation risks. For instance, journalists sometimes jump the gun and confuse correlation with causation.

research can help business organization to

The best way for scholars to mitigate that risk is to avoid jargon when talking to journalists, and to keep the conversation focused on the research. “I try to only say things to journalists and practitioners that are backed by sound scientific evidence,” says Brooks. “And if I mention my own thoughts or opinions, I make sure to give a big fat disclaimer such as ‘I don’t have data on this, but…” or ‘This is just my opinion or speculation.’”

A note to researchers who talk to journalists: Before the interview, ask whether they plan to quote you, and if so, can you review the quotes for clarity and accuracy before publication. Many journalists are happy to oblige, time permitting. But don’t ask them if you can review the whole story beforehand; the answer will be no.

And a note to business journalists deciding whether to write about research: don’t ignore new research just because it lacks an obvious tie to current events. New research can provide an opportunity to be prescient about real-world events rather than retrospective. The research itself can be the news hook, although it may not be as obvious as, say, a breakthrough in cancer research.

Remember the aforementioned research by Bazerman et al., which explained the unconscious biases that cause auditors to do a bad job of auditing? Bazerman first pitched a piece on the subject to a practitioner-focused publication in the late 1990s, but the editors weren’t interested. However, they became very interested in the research the following millennium, after auditor Arthur Andersen was convicted of illegally destroying documents related to the US Securities and Exchange investigation of its client, the Enron Corporation.

“They needed the collapse of Enron,” Bazerman says. “There’s an issue of managerial outlets not being interested in good ideas until they have become obvious.”

Harvard Business School’s Michael I. Norton and Duke University’s Dan Ariely have received a great deal of mainstream media attention on their research on wealth inequality , including this YouTube video , which has received more than 19 million views. But, Norton says, it took nearly 10 years for the media to pay attention to the line of research.

“We started that research in 2002,” says Norton, the Harold M. Brierley Professor of Business Administration at HBS. “Then some things happened in the world, and people started being interested in inequality.”

How academic institutions can change

It’s worth noting that Harvard Business School is unusual in that it stresses the importance of a strong interest in the concerns of practicing managers and in conducting theoretical, experimental, and field-based research that can influence “both academics and practitioners” among the faculty.

Institutional encouragement of practically relevant research is one way to shift the focus of academic studies, but Toffel argues for other fixes in his paper. He suggests academic journals do more to communicate with practitioners, inviting published authors to write companion pieces for practitioner readers, for example. In fact, the Strategic Management Journal now requires that accepted papers include managerial abstracts, and that journal and Academy of Management Perspectives have begun encouraging authors to create brief videos to explain their research to a broad audience.

Toffel also recommends that professional societies do more to promote and share relevant research with their members. Several societies already present awards to honor practically relevant research in their respective industries, he notes.

Finally, he argues that scholars need to learn the value of practical relevance from the start of their academic careers.

“We also need to encourage and train our doctoral students to nurture the desire to conduct relevant research and to acquire the knowledge to do so, including by encouraging them to engage with practitioners,” he writes.

In the end, the trend toward more applicable research will have to start with the researchers.

“My advice is to be true to yourself and your ideas,” says Edelman. “For those who have genuine and significant insights to provide to practitioners, the hope is that good ideas will ultimately get the audience and recognition they deserve.”

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Business Research Methods pp 3–12 Cite as

Introduction to Business Research

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In the present fast track business environment marked by cut-throat competition, many organizations rely on business research to gain a competitive advantage and greater market share. A good research study helps organizations to understand processes, products, customers, markets and competition, to develop policies, strategies and tactics that are most likely to succeed.

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How does market research help a business: 5 key benefits.

By Haley Noble

Tags: Research

research can help business organization to

Before we can dive into how market research helps a business, we first need context around the concept of “market research” itself. Some define it narrowly as “the act of gathering information about customers’ preferences and habits.” Others define it a bit more broadly to include the processes, policies, techniques and tools that are utilized to solicit, collect, analyze and interpret that information. At KL Communications, we uphold the broader definition, which includes both digital and in-person approaches to market research. In fact, we were one of the first to provide a market research online community (MROC).

Market research helps a business by informing strategy. As reported by Teradata, more than 60% of marketers do not conduct market research. As a result, they do not have data-informed marketing strategies. That’s a missed opportunity to deepen the engagement with consumers and drive loyalty. There are numerous benefits to conducting market research but we have identified the most critical ones.

Here are five key areas where market research will help your business.

1. You will understand your customers better.

Empathy is not a skill that every business considers. Even fewer businesses have mastered the art of studying and implementing improvements based on customer experience. Businesses should study what their customers do to make a purchasing decision. This includes all their considerations such as what savings they might obtain, how they evaluate competing options, the actual act of making the purchase, as well as any resulting feelings or actions after the purchase. Tapping into the mindset of your customers affords your business new opportunities.

Invite your customers to open up, but be prepared to take action on what they say as they will hold you accountable. Lose your bias, be transparent and authentic. Let them tell you what they want, need and what their pain-points are. Let them share how they feel about your brand, your competitors and what they think you should be doing differently. Only then can your business truly tailor products, services and marketing to them.

2. You will understand your non-customers better.

Non-customers may be the most important resource of all when it comes to market research. In contrast, loyal customers are already won over. They may not have a negative perception of your offering or they may not choose to voice it. Instead, tapping into those people who are not yet invested in your brand may provide your business with a fresh perspective you’ve never considered before

What’s keeping these non-customers from using your services or products? Ask former customers the critical questions regarding why they abandoned your product or brand. Ask them what changed and what would it take to win them back. Asking open-ended questions can be insightful and may serve as the key to harvesting valuable information which can be translated into actionable insights.

3. You will understand your industry and marketplace better.

That adage, “a bird in the hand is worth two in the bush” rings particularly true when it comes to how market research helps your business better understand your industry. Using online search tools is effective in helping break your industry down into discrete categories to refine your own classification and niche, but you need more. Sure, you can hire analysts to benchmark your brand, assess whether your messaging is current and if your strategy is on the same path that the industry is headed. However, it’s not quite the same as hearing it from your customers.

You can ask – and learn – where are the opportunities? The pitfalls? Who is stumbling and why? You’ll learn about the related activities, initiatives and products that your customers are excited about. There may be some new information that could spark innovation.

4. You will understand your competition better.

It can be challenging to understand what your competition is doing and downright difficult to predict their next moves. That said, asking consumers what they like versus dislike about your competitors’ products and brands gives you a window into your competitors’ own market research. Surely, they are hearing the same things that you are from their customers. This type of “social listening” is encouraged to enhance your business’s strategic planning.

Consumers know what they want and market research provides tools and techniques to help them articulate it. Once you have that knowledge, you can adjust your positioning, as you will likely learn more about your competition’s value proposition. Market research helps businesses understand their competition better and affords an opportunity to then “double down” on whatever makes your own business unique.

5. You will understand your business better.

It seems a bit counterintuitive that outsiders, both customers and non-customers, can tell you more about your own business. But, the truth is that they can, and they do so through an unfiltered lens. Cultivating conversation to secure that outsider’s perspective helps businesses do better.

Market research uncovers strengths and weaknesses that may or may not be known internally. If those gaps are known, employees may withhold sharing what they know for fear of retaliation or some other negative reaction. Even more importantly, market research will shine the light on what makes your business special, what makes your business better, what makes your business more interesting and better. Market research helps businesses see, with tremendous clarity, how their messages, products and brand resonate with their customers first-hand. Customers can see through any veil, perceived or real, that a business projects and they will, in very clear terms, call you out for a lack of transparency or a misfire.

What does all this mean? The message here goes well beyond how market research helps businesses do better, be better and grow. It means more customers, happier customers and growth for your business which makes shareholders happy, too.

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Organizational health is (still) the key to long-term performance

For decades we’ve seen companies’ fortunes rise and fall based on their ability to react to, and recover quickly from, geopolitical shocks, technological advances, economic uncertainty, competitors’ bold moves, and other disruptions. Amid this volatility, which these days is accelerating rather than abating, many have a hard time staying the course. But some continue to survive and thrive despite the challenges. Why do these companies manage to succeed, year after year—operationally, financially, and otherwise—while others don’t?

Twenty-plus years of proprietary McKinsey research tells us that one of the main reasons is organizational health.

Organizational health refers to how effectively leaders “run the place”—that is, how they make decisions, allocate resources, operate day to day, and lead their teams with the goal of delivering high performance, both near term and over time. Organizational health comprises three elements: how well the entire organization rallies around a common vision and strategy, how well the organization executes its strategy, and how well the organization innovates and renews itself over time.

Our latest research on the topic reiterates the degree to which organizational health is not just nice to have; it’s required for sustained performance and organizational success. McKinsey’s Organizational Health Index (OHI) continues to show, for instance, that, over the long term, healthy organizations deliver three times the total shareholder returns (TSR) of unhealthy organizations, regardless of industry. 1 Aaron De Smet, Bill Schaninger, and Matthew Smith, “ The hidden value of organizational health—and how to capture it ,” McKinsey Quarterly , April 1, 2014. Other findings point to greater resilience and higher financial performance in healthy organizations, even as the world around them has become that much more complicated (see sidebar, “What is the Organizational Health Index?”).

What is the Organizational Health Index?

The Organizational Health Index (OHI) is a diagnostic that measures critical elements of a high-performing culture in an organization. The index draws from a proprietary database of more than eight million respondents across more than 2,500 organizations in a range of geographies and industries. The index aggregates employees’ and managers’ views on the management practices (and employee experiences) that inform an organization’s performance across nine dimensions, or outcomes. An overall score is assigned so companies can see how they compare with others in the database. The result is a detailed view of the health and internal-network dynamics of an organization (exhibit).

Launched in 2003, the OHI model is updated regularly to reflect advances in organizational science and changes in the state of organizations more broadly. The 2023 update includes factors—such as agility, resilience, inclusivity, and employee experience and well-being—that have become more pronounced in the wake of the global pandemic, macroeconomic shifts, geopolitical unease, and other global trends.

In this article, we look at the latest OHI results and highlight a few of the more compelling insights that the index reveals about leadership, data and technology, and talent management. We also identify several principles for building or maintaining organizational health over time—something that leaders often tell us they have limited time and resources to do.

It’s important to make the time, however—not just to spin up new activities but rather to think about how to run the business differently and factor both health and performance into daily actions. The causes of, and conditions for, organizational health are always changing. Just as medical associations continually update their recommendations on diet and fitness, so must the business community regularly monitor its practices and performance. The companies that do can differentiate themselves from others in the marketplace. They can more readily identify the kind of talent they need and the specific behaviors it will take to achieve their organizational objectives.

Organizational health can put companies on a fast track to performance —and a commitment to sustained health can keep them there.

The staying power of organizational health

There is no one right path to sustained success, but the fact is, healthier organizations do tend to perform better than unhealthy ones, especially in times of uncertainty. And that performance advantage increases over time. 2 “ Where companies with a long-term view outperform their peers ,” McKinsey Global Institute, February 8, 2017. According to our research, organizational health is the strongest predictor of value creation and a critical factor in sustained competitive advantage. In one evaluation of 1,500 companies in 100 countries, for instance, we saw that companies that had improved their organizational health realized 18 percent increases in their EBITDA  after one year.

Consider the following data points.

Health and M&A . In merger situations, healthy organizations—those that applied various health interventions during the integration phase and emphasized organizational health throughout the integration—gained a 5 percent median change in TSR  compared with industry peers after two years. The change for unhealthy companies was –17 percent over the same period.

Health and transformations . In large transformations, companies that embedded organizational-health investments and initiatives in their change programs across an 18-month period saw 35 percent higher TSR  than companies that did not invest in health.

Health and resiliency . Healthy organizations are not just higher performers, they are also more resilient and better able to manage downside risk. For instance, from 2020 to 2021, during the COVID-19 pandemic, healthy organizations were 59 percent less likely than unhealthy organizations to show signs of financial distress .

Health and safety . Companies with superior organizational health are better able than their peers to provide safe work environments, thereby limiting their exposure to financial, operational, and reputational risks. Indeed, companies in the top quartile in organizational health have six times fewer safety incidents  than those in the bottom quartile.

The relationship between health and performance can be quantified in other ways, too, including in the areas of talent and culture . In our experience, employees and leaders in unhealthy cultures often focus on what made them successful in the past rather than on what may be required going forward—and their entrenched behaviors and ways of working can take on a life of their own. Consider the situation at one global company: employees had reported in company satisfaction and pulse surveys that they felt motivated to do their jobs—and yet, the company’s performance remained stagnant. The CEO and executive team could not determine how to break through.

An organizational-health diagnostic revealed the problem: misaligned behaviors had dulled the company’s performance edge. Employees were producing day to day—but not in the areas that mattered most for meeting the organization’s long-term strategic goals. They were engaged but comfortable—“like being in a warm bath.” To change the energy, the CEO and executive team embarked on a multiyear transformation in which they reengineered business processes, instituted different working norms for leadership teams, changed their protocols for meetings and communications, activated change agents across the organization, and pushed more decisions down to those on the front lines. Over time, employees’ enthusiasm increased, and descriptions of “what it felt like to work there” became livelier and more focused on achieving great things together. Performance was on the upswing.

A pulse check: How should leaders think about organizational health?

Clearly, organizational health matters as much now as it ever has. The latest OHI results reiterate what we know from McKinsey’s 2023 State of Organizations research  about how companies are faring in an era of unprecedented change. But in these latest OHI findings, three trends in particular stand out: how leaders are leading; the links between technology, data, and innovation; and the value of talent mobility.

1. Leadership is undergoing a generational transformation

It’s fair to say that few—if any—executives anticipated the deeply disruptive business (and societal) changes that would emerge because of the 2020 global pandemic and the speed at which organizations needed to transform themselves. As they have reckoned with changes in where and how work gets done, leaders are learning that they need to be both decisive and empowering .

To that point, the OHI research indicates that decisive leadership is now one of the best predictors of organizational health. Unlike authoritative leadership, in which leaders use influence and authority to get things done, decisive leadership reflects leaders’ quick decisions and their commitment to act on them. During the COVID-19 pandemic, senior leaders at Amazon made quick commitments—within days and weeks, not months—to prioritize essential supplies, protect customers from price gouging, raise the minimum wage for hourly workers, and increase overtime pay. They allowed unlimited paid time off, as well as two weeks of sick pay to those affected by COVID-19. The company also rapidly expanded the capacity in its data center to meet the surge in demand for cloud computing services, which resulted in increased operational efficiency and growth for Amazon Web Services. 3 Karen Weise, “Amazon’s profit soars 220 percent as pandemic drives shopping online,”  New York Times , April 29, 2021.

Would you like to learn more about the Organizational Health Index ?

Decisive leadership is not just for times of crisis, however; it’s a requirement for any business that just wants to keep up. 4 Aaron De Smet, Gerald Lackey, and Leigh M. Weiss, “ Untangling your organization’s decision making ,” McKinsey Quarterly , June 21, 2017. To that end, a number of organizations have taken steps to empower frontline workers. Senior leaders at TJ Maxx, for instance, have empowered more than 1,200 buyers across all stores, each of whom controls millions of dollars, to cut deals on the spot with manufacturers. By committing to a system of delegated decision making, leaders have ensured that items get into stores quicker—within a week, in most cases—than they would have under a more traditional, hierarchical review process. 5 “The Economics of T.J. Maxx’s recession-proof pricing strategy, explained,” Wall Street Journal , June 1, 2023. Leaders at Southwest Airlines have made a concerted effort to put critical customer information in frontline employees’ hands: “Not only are [employees] able to work more quickly, but they are also providing a more tailored experience to customers,” James Ashworth, vice president for customer support and services, told Forbes magazine. The end result has been “a lift in our customer satisfaction scores, as well as a decrease in our call handle times,” he says. 6 Tiffani Bova, “Southwest on the importance of employee experience,” Forbes , November 17, 2020.

According to the OHI research, companies with leaders who take decisive actions—and who commit to those decisions once they are made—are 4.2 times more likely to be healthy, as compared with their peers.

But it’s not enough just to be fast with those decisions; our OHI research shows that decisive leaders who empower their employees (giving those closest to the work the autonomy to make their own decisions) are 85 percent more likely to improve the quality of organizational decisions, as compared with their peers. This supports previous McKinsey research pointing to a paradigm shift in leadership and, among other new requirements, the need for executives to shift from being controllers to becoming coaches  who engage employees and help foster in them a bold mindset of testing, learning, and fast adaptation. 7 Aaron De Smet, Arne Gast, Johanne Lavoie, and Michael Lurie, “ New leadership for a new era of thriving organizations ,”  McKinsey Quarterly , May 4, 2023.

Bank Mandiri, for instance, is using digital tools to ensure that individuals across all parts of the company have access to data analytics. Previously, information requests and report generation at the bank could take weeks, and critical business information had to be pulled from a tangle of systems. Through a new self-service system, employees can now access the data that are most relevant to them in a timelier manner—in a matter of days rather than weeks—allowing employees to make better, faster decisions.

2. Data is the fuel for everyday innovation

Leaders have traditionally thought of innovation as a process for bringing “the next big idea” to life . But our latest OHI data reveal that companies are more likely to succeed with innovation initiatives if “big bang ideas” are supported by data-driven insights and supplemented with smaller, more frequent ideas that target improvements in everyday processes or ways of working.

In many organizations, the ideas for “little i” innovation often come from the people closest to customers— frontline employees . 8 People & Organization Blog , “ Empower the front line for a thriving organization ,” blog entry by Kelli Moles and Michael Park, McKinsey, August 28, 2023. And, as it turns out, it pays to listen to them: the OHI data show that organizations that actively listen and act on recommendations from frontline employees are 80 percent more likely than others to consistently implement new and better ways of doing things.

The research also reiterates that all forms of innovation are more likely to succeed when decisions are grounded in data and facts. According to the research, organizations that emphasize data-driven decision making are 63 percent more likely than others to adapt to a changing business environment.

One of the best recent examples of data-informed innovation comes from Major League Baseball. The rise of data analytics prompted significant changes in many teams’ operations; managers built their rosters and managed their lineups according to batting percentages, probabilities, and other data captured across the league. The downside of that data-driven innovation, however, was longer games (more pitching changes) and a product that was less appealing to younger viewers. Again, the league turned to data—this time conducting surveys, focus groups, and spending time with younger fans—to learn what was important to them. Based on that feedback, the league engaged in some experiments. It implemented rule changes in 2023 (pitch clocks, larger bases, pitching-change limits, and so on) that fundamentally altered the pace and action of the game. The league continues to embrace innovation and technology, not only to improve the game but the overall fan experience. 9 Erik Roth, “ The Committed Innovator: How Major League Baseball built an innovation machine ,” McKinsey, October 27, 2023.

3. The dynamic deployment of talent is becoming even more of a competitive advantage

Workforce dynamics have been completely upended over the past few years, which has left organizations with an increasingly difficult HR-related task: ensuring that they have the right talent on board to tackle the highest-value-creating activities and successfully execute on their strategies. 10 Patrick Guggenberger, Dana Maor, Michael Park, and Patrick Simon, “ The State of Organizations 2023: Ten shifts transforming organizations ,” McKinsey, April 26, 2023. Our OHI research shows that the dynamic deployment of talent can be a powerful lever for both employee attraction and retention. It can also help organizations pivot quickly as markets change or new technologies and global trends emerge. 

Companies that encourage and even facilitate internal role changes can sharpen employees’ skills, maximize their versatility, and provide avenues for growth. According to our OHI findings, employees that experience more mobility at work are 27 percent less likely to report feeling burned out, 47 percent less likely to report intentions to leave their organization, and 2.3 times more likely to recommend their companies to others.

Employee rotations and upskilling became core components of one Latin American bank’s digital transformation. When HR leaders realized that 62 percent of the company’s technology workforce needed to be upskilled to meet the bank’s transformation goals, they launched a large training initiative, which involved more than 1,500 courses focused on about 820 technology skills, 60 boot camps, and countless individual, on-the-job coaching sessions. The HR organization embedded this focus on technology coaching and capability building into all performance management discussions.

As a result of this effort, about 60 percent of the total technology workforce is engaged in upskilling, attrition is low, and what started as a “special transformation program” is now considered business as usual and a cornerstone of the bank’s learning and development efforts. 11 Vincent Bérubé, Dana Maor, Maria Ocampo, and Alex Sukharevsky, “ HR rewired: An end-to-end approach to attracting and retaining top tech talent ,” McKinsey, June 27, 2023.

It's worth noting that more and more organizations are following the bank’s lead and exploring the move to skills-based hiring —in part to address shortages in certain skill areas like technology but also to create pathways for “nontraditional” job candidates, or those who might not have a college degree or a formal certificate of expertise. 12 Bryan Hancock and Brooke Weddle, “ Right skills, right person, right role ,” McKinsey, October 25, 2023.

Getting and staying healthy

Sustained organizational success really comes down to leaders gathering the data that will help them understand which behaviors can help them to meet their performance goals as well as the type and scale of health improvements their organization should target.

It’s critical for leaders to establish a baseline of the organization’s current strengths as well as the strengths it is targeting. With that baseline in mind, leaders can set clear behavioral priorities and begin to act—but it’s also critical to remember that context matters. Organizations will need to launch health interventions that are specific to the business, their performance goals, and their customer value proposition. Two hotel chains—one luxury, one economy—may offer similar services in the market, but each requires different kinds of behaviors to deliver on their value propositions and meet their performance targets. Regardless of their starting points, each will need to track progress against goals and adapt as needed along the way.

McKinsey research points to four foundational behaviors, what we call power practices , that can have disproportionate effects on organizational performance—and whose absence can create a significant drag on organizations: strategic clarity, role clarity, personal ownership, and competitive insights. 13 It is worth noting that the list of power practices has changed over time, and likely will again, but three practices routinely show up: strategic clarity, role clarity, and personal ownership.

  • Strategic clarity . Healthy organizations effectively translate vision and strategy into actionable and measurable objectives that are clearly articulated and shared with employees at all levels.
  • Role clarity . Healthy organizations tend to have structures, processes, and working norms that speed up decision making, remove layers of bureaucracy, and make it easy for employees to get things done—even when situations are new or ambiguous.
  • Personal ownership . Healthy organizations hire and develop managers who have a deep sense of personal ownership for their work and who foster that same sense of ownership in their teams and employees.
  • Competitive insights . Healthy organizations tend to have a clear view of where and how they fit in the competitive landscape and of their value propositions; they use these insights to set strategic priorities, make decisions, and allocate resources.

If any of these power practices are missing or at risk, organizations should take steps to address them; it’s a no-regrets move for achieving good organizational health.

In addition to this list, companies also need to identify which kinds of talent and behaviors are required for them to truly differentiate themselves from competitors—the organizations’ so-called “secret sauce.” Industry insights and benchmarks can provide some direction, but the final list of behaviors that convey competitive advantage to one company and not others can only be identified by an organization’s senior leaders.

The “born remote” technology company GitLab provides a good example. Long before these days of remote and hybrid workplaces, the company established foundational norms  to get the most out of its distributed workforce. Ways of working were designed to be independent of time and place. Employees are encouraged to “write things down,” for instance, and playbooks are readily available online. GitLab’s operating model emphasizes a shared reality, equal contributions, decision velocity, and measurement clarity. The central behaviors at the company’s core have given it an advantage as other companies continue to try to define remote and hybrid working models . And GitLab has demonstrated top-decile performance against OHI benchmarks. As this and many other examples show, leaders in outperforming companies always have a plan to be “good enough” at everything and “truly excellent” at the handful of things that matter for them and the organization. And when it comes to how they run the place, they emphasize cultural consistency across the organization. 14 Carolyn Dewar and Scott Keller, “Three steps to a high-performance culture,” Harvard Business Review , January 26, 2012.

The leadership imperative

Our research makes a clear and compelling case that organizational health is the foundation for companies’ ability to successfully create value, attain profitability, build resilience, and thrive in so many other areas.

So why don’t more senior executives make it a priority?

In our experience, there are several common obstacles. The first is inconsistency in how leaders think and talk about organizational health: conversations about organizational health often anchor on employee engagement as the default, and executives often consider organizational health as being separate from performance. In fact, they are actually one and the same. Leaders should be asking themselves, “How do I run the place each and every day—in each and every meeting—in ways that are both healthy and conducive to creating high performance?”

Related, senior leaders may not see the trees for the forest; many will discuss organizational health as a top-level theme but are much less often involved in the interventions and implementation required to achieve and sustain organizational health. Third, realizing improvements in organizational health takes time—and executives often need to move fast. The default here is to focus on putting out fires rather than fixing the system.

And finally, there’s a sense that bad health implies bad leadership. C-suite leaders must make organizational health a central component of their leadership styles and manage it as rigorously as they do their P&L. Otherwise, they may not actually recognize unhealthy actions when they see them. For this reason, leaders may need to spend extra time, attention, and resources on health interventions. They may need to reframe quarterly discussions and incentives and other elements of performance management around the idea of maintaining organizational health.

Even for those companies that are seemingly in great shape, it’s important to continue to monitor the organization for symptoms of upset or disruption. Just as top athletes can lose time or distance or skill if they skip workouts for an extended period, so can companies fall behind competitors if they take a break and rest on their laurels. Commitment is crucial.

Alex Camp is a partner in McKinsey’s New York office, Arne Gast is a senior partner in the Amsterdam office, Drew Goldstein is a partner in the Charlotte, North Carolina, office, and Brooke Weddle is a partner in the Washington, DC, office.

The authors wish to thank Aaron De Smet,  Ben Fletcher, David Mendelsohn, John Parsons, and Laura Pineault for their contributions to this article.

This article was edited by Roberta Fusaro, an editorial director in the Boston office.

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How Web Research Services Can Help Your Business to Grow

How Web Research Services Can Help Your Business to Grow

We live in a world of technology, where getting information is just one click away. The Internet has blown the world since its inception, and today, we cannot imagine our lives without the Internet. In short, it has simplified our lives. The Internet has been a useful resource for business, not just for personal use. In the world of the digital age, businesses have shifted their way of performing activities. Since the world is online, businesses have taken a step forward to make the user experience more accessible and convenient. Web research, market research analysis, consumer behavior study, trends and patterns in the market, and much can only be made through the Internet.

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What are web research services, consumer insights, market trends, competitive analysis, more robust strategies, improved risk mitigation, why outsource web research services rather than doing it in-house, market research, product research, competitor analysis, ecommerce researching.

Since the digital presence has snowballed, businesses rely on collecting and gathering pieces of information from the Internet as being a pool of information. However, businesses searching for relevant information can be misled as the information present on the Internet may only sometimes be trustworthy. The larger the pool of information, the more authenticity will decrease. Hence, firms that are looking for information may have to get help from experts who can accurately gather relevant information that is trustable, authentic, and useful. On that note, web research is time-consuming and requires extensive attention to detail to gather and maintain the collected information data. This task may be simpler but is expensive and time-consuming if done by the in-house team of any business. Therefore, the best and most practical way out for an organization is to outsource web research services from a reputed outsourcing company.

Uniquesdata is a renowned outsourcing data digitization and web research company based in India, with extensive work experience with international clients, including USA, UK, Netherlands, France, and Europe. With the expertise, knowledge, and skilled team, Uniquesdata offers a wide variety of web research services, exceeding every expectation by clients.

Web research is a challenging task to perform. Hence, it is better to hand it over to experts to get the best and most desirable results that can help your business opportunities to expand. However, it’s vital to understand what web research is and how it will benefit any business, regardless of size and nature.

Web research service is a skill or function that allows businesses to use the gathered information for market analysis, study consumer behavior, and generate insightful reports for the business. In this competitive market, businesses must stay current regarding trends. Market research services range from basic industry-specific research to complex research projects requiring expertise in specific industries, topics, or trends. Outsourcing market research services will benefit you in myriad ways as web researchers use various tools and techniques to collect, analyze, and present data in a format that is easy to understand and use. Following is the list of the benefits of outsourcing web research services .

  • Secured and relevant data
  • Accurate quality outcomes
  • On-Time Delivery
  • Thorough Web Research
  • Cost Effective

How can Web Research Help Business to Grow?

Comprehensive web research is crucial to thrive in the competitive market. As a matter of fact, market research services help to bring new ideas, strategies, and business opportunities to any industry. Whether launching a new product, relaunching an existing product, market competition analysis, or generating an insightful market report, web research service eases the process and brings fresh business opportunities to the table.

Data research services entail diverse perks, especially for a company whose primary sales channel is the Internet; researching product demand is necessary. It is fundamental for any business to understand the price given by competitors and the price received by the client. Web research services can do much more for your business than gaining data to generate insightful reports. Here’s the significance of web research services for business prosperity.

Significance of web research services

With market research services, it becomes easier for organizations to study and understand consumer behavior. Due to the vast market, consumer preferences change constantly, and so does the desire. However, with deep web research services, a firm, especially a product-based organization, will benefit from understanding their customer’s psychology of the need and desire for the product. Hence, that insightful report will help to overcome the market challenges and provide effective solutions to their customers.

Market research will assist you in determining present performance and forecasting future performance based on multi-factor analysis. It also aids in deciding results by market segment and is most likely to prevent poor performance in the business.

To be one step ahead of the competition with proper corporate data research services, competitive analysis plays a crucial role. The obtained data is used to compare companies to competitors regarding sales volume, labor expenses and productivity, and other criteria that will help to discover ways to stand out in the market.

With web research, an organization can obtain relevant and focused market insights ahead of time. Moreover, extensive internet research will help determine how and when to launch a product or service.

Online research can forewarn and foresee concerns with an impending product or service launch, allowing you to take corrective action before it’s too late.

Companies outsource web research services to leading web research companies to increase productivity. The superior quality of online research activity is directly linked to an organization’s overall efficiency and production. Web research service providers can save businesses time and money by eliminating the need to hire and train a team of researchers, invest in expensive software, and provide office space and equipment. By outsourcing web research services tasks to experts, businesses can focus on their core competencies and allocate resources more efficiently. Web researchers have specialized data mining, data analysis, and market research skills and can access advanced research tools and techniques to collect and analyze data quickly and accurately. With such expertise allows businesses to gain insights for business growth.

Types of Web Research Services

Types of Web Research Services

Market research involves collecting data on customer behavior, competitors, and industry trends. Web research services can give businesses valuable insights into market trends, customer preferences, and competitor strategies to thrive in the market and get their customers satisfied with their products and services.

When launching a new product or updating an existing product, it is vital to do product research. Product research sometimes involves trial and test strategies to note consumer behavior toward the newly launched or relaunched product. Hence, with product research, a product-based business can excel.

Competitor analysis research helps gain an insightful report of the potential competitors in the market. With those insights, any business can be aware of various aspects and work accordingly in the market to attract potential consumers.

Ecommerce research is one of the trendiest research in the market. Since the world became more digital soon after the pandemic, ecommerce businesses have seen rapid growth and trust in their consumers. For building a successful ecommerce business, it is important to research thoroughly to make your place in the competitive market.

Web research is a need of every business today. Such services can assist them in being competitive, making informed decisions, and gaining valuable insights into client behavior or industry trends. With web research services, any business can stay updated in the market. By outsourcing market research tasks to experts, businesses can save time and money, gain a competitive advantage, and make informed decisions based on reliable and accurate data. As companies continue to rely on data to drive growth and success, web research services will become increasingly important for every business.

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Why Collaboration Is Critical in Uncertain Times

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Working together can catalyze innovation — even in risk-averse companies.

Recent research suggests that when resources become limited, many business leaders’ inclinations are to become risk-averse and protect their own interests, fostering a culture of conservatism and prioritizing stability over innovation. In such circumstances, the emphasis often shifts toward preserving existing assets, reducing expenditures, and maintaining the status quo, which can hinder the organization’s ability to adapt, pivot, and thrive in a competitive environment. However, it’s precisely during these challenging times that the untapped potential of collaboration can be a game-changer. If you’re a leader struggling with risk-taking, here are four strategies to make the mindset and behavior shifts to become more collaborative and unlock growth.

A client of ours — let’s call her Mary, a senior executive in the technology industry — faced significant challenges managing a large organization amid economic uncertainty. Both her company and industry were experiencing tough times, resulting in budget cuts and a hiring freeze. Moreover, she was tasked with exceeding her annual revenue goals to compensate for the underperformance of a struggling business line, which was beyond her direct control.

  • Jenny Fernandez , MBA, is an executive and team coach, Columbia and NYU faculty, and future of work and brand strategist. She works with senior leaders and their teams to become more collaborative, innovative, and resilient. Her work spans Fortune 500 companies, startups, and higher education. Jenny has been recognized by LinkedIn as a “Top Voice in Executive Coaching, Leadership Development, and Personal Branding” and was invited to join the prestigious Marshall Goldsmith’s 100 Coaches community. She is a Gen Z advocate. Connect with her on LinkedIn .
  • Kathryn Landis , MBA, is the founder and CEO of the global coaching and advisory firm Kathryn Landis Consulting, which helps senior leaders empower and inspire their teams, create a lasting positive impact, and become the best versions of themselves in work and life. She is an adjunct professor at New York University and a former leader at American Express and Automatic Data Processing. Connect with her on LinkedIn .
  • Julie Lee , PhD, is a clinical psychologist, NYU faculty, and a leading Gen Z employment and mental health strategist. Dr. Lee’s work spans Fortune 500 companies,  startups, and higher education institutions, including Harvard and Brown University. In her consulting work, Dr. Lee helps organizations to motivate and retain Gen Z professionals and coaches executives to lead with purpose and empathy. Connect with her on LinkedIn .

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U.S. Government Accountability Office

Small Business Innovation Research: Better Data and Clarity on Eligibility of Venture Capital-Owned Businesses Are Needed

Agencies make Small Business Innovation Research awards to help small businesses bring their technologies to market. In this Q&A report, we review agencies' awards to businesses owned by venture capital firms, hedge funds, or private equity firms.

These awards increased substantially in FYs 2021-2023—largely due to awards from DOD. But DOD found reliability issues with its data on such firms, so the extent of the increase is unknown.

And some agencies may not understand when small businesses owned by these firms are eligible for the program.

We made related recommendations to DOD and the Small Business Administration, which oversees the program.

Three people working in an office while a drone floats in front of them.

What GAO Found

For decades, the Small Business Innovation Research (SBIR) program has provided federal funding to small businesses for technology development and commercialization. In fiscal year (FY) 2022, the 11 participating federal agencies made over 5,000 SBIR awards to small businesses valued at nearly $4 billion. In 2011, Congress amended the Small Business Act to give participating agencies the authority to make SBIR awards to certain small businesses that are majority owned by multiple venture capital operating companies (VCOC), hedge funds, or private equity firms (i.e., "qualified small businesses"). Agencies that use this authority must first submit a written determination to the Small Business Administration (SBA), which oversees the SBIR program, and certain congressional committees. Four agencies have used this authority to include qualified small businesses in their SBIR programs.

Only two of those agencies—the Departments of Defense (DOD) and Health and Human Services—made SBIR awards to qualified small businesses in FY 2021 through 2023. Despite this, the number of awards to such businesses and the dollars awarded to qualified small businesses appear to have increased substantially compared to the prior 6 years. The increase is largely due to Air Force's use of the authority beginning in FY 2021. However, the full extent of the increase is unknown; as a result of GAO's review, DOD uncovered reliability issues with the data used to identify its SBIR awards to qualified small businesses. DOD is taking steps to address data reliability, but these steps did not include processes to monitor the effectiveness of its efforts. Without quality data, DOD may report inaccurate information to SBA and may have difficulty meeting requirements to track its use of the authority to make awards to qualified small businesses.

Most agencies in the SBIR program have not used the authority to make SBIR awards to qualified small businesses. However, GAO found that some of these agencies may be inappropriately excluding some small businesses owned by VCOCs, hedge funds, or private equity firms that are eligible to participate in their SBIR programs without the agencies submitting a written determination to SBA and Congress. SBA updated its regulations in June 2016 and made other efforts to clarify eligibility rules for such businesses. Nonetheless, not all agencies were aware of the information SBA provided or fully understood VCOC-owned companies' eligibility, and officials from some of the agencies said eligibility issues related to small business ownership are potentially confusing. Without fully understanding the eligibility of companies owned by some VCOCs, hedge funds, or private equity firms, agencies may continue to inappropriately exclude certain companies from applying for and potentially receiving awards—contrary to SBIR program regulations and SBA guidance.

Why GAO Did This Study

Small businesses have been a major source of technology development in the U.S. economy but can face challenges obtaining the funding and investment needed to fully develop and commercialize their technologies. The SBIR program was established to increase the participation of small innovative companies in federally funded research and development. Eleven participating federal agencies make SBIR awards to small businesses. To qualify for awards, businesses must meet certain ownership and other eligibility criteria. The Small Business Act, as amended, authorizes agencies to allow participation in their SBIR programs by qualified small businesses.

The Small Business Act includes a provision for GAO to conduct a study of agencies' use of this authority and submit a report to Congress every 3 years. GAO's previous reports covered FY 2013 through 2020. This Q&A report, the fourth report in the series, provides information from FY 2021 through 2023 on the extent to which the 11 agencies in the SBIR program have elected to include qualified small businesses and the factors that have influenced these decisions.

GAO reviewed agencies' data on SBIR awards to qualified small businesses from FY 2021 through 2023, analyzed SBIR solicitations and other documents, and interviewed SBIR program officials from SBA and the 11 participating agencies.

Recommendations

GAO is making two recommendations, one to DOD and one to SBA. GAO is recommending that DOD monitor the effectiveness of its efforts to address the reliability issues in its data used to identify DOD's SBIR awards to qualified small businesses. GAO is recommending that SBA take further steps to ensure that all agencies understand the eligibility of small businesses with differing levels of VCOC, hedge fund, or private equity ownership to participate in SBIR. DOD agreed with our recommendation. SBA disagreed with our recommendation, stating it already clarified eligibility in this area. However, we maintain that further steps are still needed to ensure all agencies fully understand the SBIR program regulations and do not inappropriately exclude eligible businesses.

Recommendations for Executive Action

Full report, gao contacts.

Candice N. Wright Director [email protected] (202) 512-6888

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Chuck Young Managing Director [email protected] (202) 512-4800

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    1. Employee Surveys A recent study found that only 20% of employees are actively engaged while at work. That's pretty low! Therefore employee surveys are critical for every organization and are one of the most common types of market research.

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    Regardless of your experience and knowledge, learning about business research can help you improve your organization's output. Researching the subject can also have a positive effect on your career trajectory.

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    Evaluating the strengths, weaknesses, opportunities, and threats facing a business within its market environment. This analysis aids in strategic planning and risk assessment. Gathering data from various sources, organizing and analyzing it to derive meaningful insights, and making data-driven decisions.

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    Business research: Definition. Business research is a process of acquiring detailed information on all the areas of business and using such information to maximize the sales and profit of the business. Such a study helps companies determine which product/service is most profitable or in demand. In simple words, it can be stated as the acquisition of information or knowledge for professional or ...

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    Mixed mode is a form of business research that combines quantitative and qualitative research methods in a single research project. Qualitative business research can be used in an exploratory way to uncover the questions that should be addressed more deeply. Quantitative research is used to investigate specific research questions arising from ...

  7. 8 Ways Market Research Can Help You Grow Your Business

    Successful businesses conduct market research for various purposes, including: Identifying potential customers Learning more about existing customers Uncovering new markets Analyzing the level of competition. Make informed decisions with their products and services. At this point, you probably find market research a bit overwhelming and obscure.

  8. 5 ways to improve your business with market research

    In this way, you can explore different topics in-depth and get feedback from the participants. The results will help you develop brand positioning and improve your marketing assets. 2. Understand your customers better. Sometimes entrepreneurs need better information on the size of their market, their target customers and how best to reach them.

  9. Organization Management Research from Harvard Business School

    Beyond pay inequities, research by Letian Zhang shows how Black employees are less likely to work at companies known for positive cultures or work-life balance. …. New research on organizational design from Harvard Business School faculty on issues including resolving workplace issues, HR, and culture.

  10. A Roadmap to Business Research

    1 Introduction The previous chapter provided some introductory guidance into the objective of this book, which aims to provide business researchers with enough academically sound knowledge to navigate the complex maze of scientific business research.

  11. 4 Business Goals Market Research Can Help You Accomplish

    Some of the overarching goals that market research can help organizations accomplish, include: making important business decisions, securing investments and funding, determining new business opportunities, and even avoiding business failures. Making solid business decisions.

  12. How To Use Quality Research To Impact Business Decisions

    The experts recommend no fewer than 500 respondents and 1,000 is even better. If it is important to have certain population segments represented (by age, ethnicity, geographic region, etc.), be ...

  13. Action research in business and management: A reflective review

    AbstractIn the context of business and management, action research operates in the realm of strategies, ... It is simultaneously concerned with bringing about change in organizations, in developing self-help competencies in organizational members, and in adding to scientific knowledge. Finally, it is an evolving process that is undertaken in a ...

  14. Why Market Research Is Important for Strategic Decision Making

    Market research can open your eyes to products and trends beyond your own company and help you become more aware of influential variables such as: Disruption New technology Rising competitors Shifting consumer preferences Socio-economic changes New regulations Growing and shrinking markets Potential new partners and suppliers

  15. 4 Ways Market Research Can Benefit Your Business

    3. Research can help you develop products that customers want to buy. Market research can help you know whether or not your product idea will appeal to your customer base. You can also gather competitive intelligence to find out how to differentiate yourself from other companies with similar products and services.

  16. What Is Research in Business? (With Definition and Types)

    Updated June 24, 2022 Research is an essential part of operating an effective business. By researching the market, industry and customers, a company can make an effective business plan or marketing strategy. Learning more about business research could help you start a new company or improve an existing one.

  17. Why Isn't Business Research More Relevant to Business Practitioners

    The consequence of the lack of relevant research is that the business world—and the rest of the world, for that matter—is losing out on some serious brainpower and analytical reason. Consider the 2014 New York Times op-ed titled "Professors, We Need You," in which Nicholas Kristof wrote, "Some of the smartest thinkers on problems at ...

  18. Introduction to Business Research

    Business research can be defined as a systematic and objective process of gathering, recording and analysing data that provide information to guide business decisions. It is used to understand the market trends, or find the optimal marketing mix, devise effective HR policies, or find the best investment options.

  19. How Does Market Research Help a Business: 5 Key Benefits

    Market research helps businesses understand their competition better and affords an opportunity to then "double down" on whatever makes your own business unique. 5. You will understand your business better. It seems a bit counterintuitive that outsiders, both customers and non-customers, can tell you more about your own business.

  20. PDF What is Research and How Can Research Benefit Your Organization?

    We define "research" as Research entails systematic collection of information about the activities, characteristics, and outcomes of programs, services, organizations and communities served by nonprofit organizations.

  21. A focus on organizational health can help businesses live longer

    McKinsey research points to four foundational behaviors, what we call power practices, that can have disproportionate effects on organizational performance—and whose absence can create a significant drag on organizations: strategic clarity, role clarity, personal ownership, and competitive insights. 13. Strategic clarity.

  22. Importance of Business Research for an Organization

    1. Differentiation In a cut throat competition in which most of the business have an identical offering, how does one differentiate itself to be better than its competitors? To be better than...

  23. How Fast Should Your Company Really Grow?

    The Problem. Sustained profitable growth is a nearly universal corporate goal, but it is an elusive one. Empirical research suggests that when inflation is taken into account, most companies ...

  24. How Web Research Services can help your business?

    Web research is a need of every business today. Such services can assist them in being competitive, making informed decisions, and gaining valuable insights into client behavior or industry trends. With web research services, any business can stay updated in the market. By outsourcing market research tasks to experts, businesses can save time ...

  25. How Companies Should Weigh In on a Controversy

    How Companies Should Weigh In on a Controversy. A better approach to stakeholder management. by. David M. Bersoff, Sandra J. Sucher, and. Peter Tufano. From the Magazine (March-April 2024) Susan ...

  26. Why Collaboration Is Critical in Uncertain Times

    Summary. Recent research suggests that when resources become limited, many business leaders' inclinations are to become risk-averse and protect their own interests, fostering a culture of ...

  27. Small Business Innovation Research: Better Data and Clarity on

    Agencies make Small Business Innovation Research awards to help small businesses bring their technologies to market. In this Q&A report, we review agencies' awards to businesses owned by venture capital firms, hedge funds, or private equity firms.. These awards increased substantially in FYs 2021-2023—largely due to awards from DOD.

  28. What Is Career Development, and Why Is It Important to a Business

    Whether employees are just starting their careers, mid-level, or at the top of the ladder, career development is important to help them learn new skills and progress within their roles. It can also help to build a strong, committed, skilled workforce. Training grants or bursaries. Organizations can use career development to support employees ...