An Approach to Developing Innovative Financial Services Solutions
For managers in financial services organizations, making decisions that can have a significant corporate impact is part of the job. However, being placed in a position of having to make those decisions without sufficient, reliable information concerning possible alternatives is a major management problem. An effective research support system can provide the competitive and marketplace intelligence that provides a solid foundation for sound and informed management decision-making.
The Value of a Marketplace Perspective
“Research is seeing what everyone else has seen and thinking what nobody else has thought.” These words from the Nobel Prize-winning biochemist Albert Szent-Gyorgyi wisely convey both the importance and the proper role of research in any creative process. The ability to see things from the point of view of “everyone else” is especially important to those charged with strategic marketing planning and implementation. A financial services organization must first understand marketplace perceptions, priorities and preferences in order to identify (or create) the marketing and brand elements that will help it create relevant marketplace differentiation for the firm and its products. Marketing research can also provide valuable insights in areas such as product development, messaging, distribution channel effectiveness and campaign tracking.
Marketing research is also a valuable tool in ensuring that an organization remains “market driven”—the mantra of a flood of management books over the last decade or two. Experience shows that failure to stay attuned to the marketplace can cause financial services firms to
- ignore important market shifts or fail to realize when a market has peaked
- abandon core customers and focus on a tempting new niche market
- launch products but have no target in sight
- miss valuable marketing opportunities and fail to successfully reach targeted segments.
What’s the Point
The primary goal of financial marketing research is to help companies ensure that the right distribution channels deliver the right product to the right markets using the right messaging. The keys to a successful research initiative are a specific goal and a focused plan of action.
There are a host of valid research techniques and approaches. As the old adage goes, “There are many roads to the top of the mountain, but when you get there the view is all the same.” As a result, it is generally wise to examine alternative approaches before undertaking extensive research. The goal is to work smarter rather than harder, to select the marketing research approach that provides the right answers in a timely and cost-effective fashion.
Over the years we have developed a variety of “pragmatic research” techniques that inform and support management decision-making. Here are a couple of examples:
- A company that needs to gauge the potential for a new product would generally launch an extended research project involving interviews and focus groups. However, a company using pragmatic research would begin the quest by studying the historical successes and failures of similar competitive products to unearth some very strong and immediate clues concerning the product’s possible fate. As Lord Byron said, “The best prophet of the future is the past.”
- A company looking for the best area for a new branch would traditionally expend research resources for site selection studies. With pragmatic research, the company would first look to the sites already chosen by the competition. The fact that a Burger King appears around the corner from most successful McDonalds locations suggests that Burger King has used pragmatic research to minimize the costs of their site selection research activities.
The Bottom Line
Research—like so much else in life—is a good thing that is often used irresponsibly. Responsible marketers understand that a properly conceived and executed research initiative can provide the insights needed to develop new, relevant and differentiated marketing solutions. They use marketing research to support—rather than to substitute for—focused decision-making.
Less-confident marketers tend to “hide behind the data,” using reams of statistics to lend credibility to their conclusions. These are the ones who repeatedly declare, “The research shows…” and then trot out an array of statistics and charts. Responsible marketers, on the other hand, understand that no research is precise and those who use this imprecise art as a hammer, rather than as a management guide, are both missing its benefits and putting their organizations at a disadvantage.