This week I want to tell you a little story that I hope conveys to you the value of research as a method for growing your business.
Once upon a time…
Our story begins a LONG time ago, before the Internet was a thing (at least for us everyday folks), before email, before cell phones.
Once upon a time, way back in 1989, a college graduate took a position at a large health insurance company. As with most college graduates, this student had no concept of the inner workings of large organizations and was quite naïve when it came to how business is often done.
A math major in college, she set about working as a research analyst, using logistic regression to evaluate the performance of hospitals and physicians using health outcome data. This research project led to the creation of a company-wide decision support system to help select hospitals to be in a preferred network with the health insurance company, with negotiated prices up front.
Nowadays, this might seem like just your everyday algorithm-based AI type project, but it was pretty ground-breaking back then. So much so that the other people in the Market Analysis department were not typically allowed or encouraged to meet with hospital executives, as they really only spoke the language of statistics. But this new employee came armed with enough math knowledge to get by in her department, along with just enough communication skills to explain the math to non-math people, like the insurance company’s executives and the hospital executives.
So, they sent her on the road, armed with a three-ring binder full of data and regression outputs, and some charts and tables printed on transparencies to share with these hospital executives using an overhead projector. And as she shared the data and explained where it came from, she ended up becoming the key hospital rate negotiator, since it was hard to argue with the facts that she had in her three-ring binder.
From binders to datasets
And so began her path toward data-driven decision making. Over the course of her career, she took on many other roles that involved gathering, analyzing and utilizing data to make business decisions. Sometimes the organizations made use of them; sometimes the organizations chose to ignore them. She was confused why anyone would choose to ignore data, and frustrated when decisions at big companies were made without relying on this highly relevant information.
Many years later, the college grad grew up into an entrepreneur. She was sick and tired of being told what to do and when to do it, and frustrated by the seeming lack of direction at many of the companies.
“If big companies won’t make use of data, maybe small companies will,” she thought.
Sadly, this entrepreneurial analyst (analytic entrepreneur?) found that many small companies had no easy way to collect data or access data, and they didn’t have time to think about it much either.
Many of the small businesses were run by one or two owners, and maybe a few hourly employees. There wasn’t much time or overhead to do data analysis or market research, when everyone was already so busy keeping the company afloat. Sure, by this time, there were software, tools and databases to assist small businesses, but they all involved time, money, and capability to navigate and turn the numbers into decisions.
Big vs Small
“It’s just not fair that the big companies seem to have all the advantages when it comes to research, when it’s the small companies who could actually figure out how to make use of the research findings and make changes to meet the needs of customers,” she thought. “How can we level the playing field and help small businesses get the information they need to navigate their business path faster than the giant companies?”
The more she thought about it, the more she decided to focus her efforts on helping small businesses grow through the use of data and research. But data and research aren’t glamorous like advertising or sales. And they aren’t easy to explain to busy business owners with limited time and budgets. Fortunately, there were some programs that paid for research to help small businesses grow. And after a few years of experience, this research entrepreneur started to see where she could help businesses connect with new customers without the budget or the team of marketers that a big business might have. And how to make the most of limited marketing dollars to connect with the customers who are ready to buy.
And when a global pandemic put a halt to many businesses, a kink in the supply chain, and a temporary end to trade shows, these business owners were forced to be even more creative than ever to stay in business. Do they have to move all their sales and marketing online? Is a virtual trade show as effective as an in-person one? Can they reach more potential customers online now? And how can anyone get to the top of the Google search these days when the big companies dominate online and always favor themselves?
Research Questions for Small Businesses
There is no one right answer for all small business owners. But there is a great path to help find the right answer for each business. What it requires, though, is setting aside some time each week to pay attention to the world around your small business, and to your customers, suppliers, and competitors. The best way to do this is to focus on these three questions:
- What would make your potential customer decide to change from their existing vendors to try out your product or service? In other words, what makes you stand out from the rest? Put yourself in your buyer’s shoes. (Be careful with this answer and consider how you might stand out from the big competitors as I mentioned before in this blog post.)
- When are your customers most in need of your help/products/services? Look for disruption in the industry of your customers, such as when businesses are shifting, acquisitions are occurring, or executives are moving chairs. This is when a business is most open to trying something new. Make sure you are already in front of them when they start looking for it. See #3 for that.
- Where do your customers get the information they need to make a purchase decision? Put yourself there! Write articles in the trade journals that your customers follow. Offer informational webinars that don’t include any sales pitch. Become a resource by sharing educational content on your website and through social media. Then you are more of a trusted partner when customers are ready to buy.
The moral of the story is…
Research has value no matter how small your business. Take some time each week to see what you can uncover and consider how it might help you connect with your customers. What information would you put into your three-ring binder to support your encounters with potential customers?
P.S. Just in case you were wondering, the girl in the story was me! And now I am a passionate supporter of small businesses and come armed with research to help support marketing decisions. Curious how to get started on your own “three-ring binder”? Contact me for a free 30-minute Zoom call for some pointers specific to your own business.