Professional Services Marketing Blog

The More You Know, The Faster You Grow

By Lee W. Frederiksen, Ph.D.; Infographic by Brian Lemen

growth and profitability chart

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The Importance of Market Research for Growth and Profitability

As professional service providers, we think that we know our clients pretty well. But how well do you know your audience... really? Can systematic research on your target market impact the growth of your firm?

We investigated the importance of market research as part of a recent study of professional services firms. We knew from our experience working with professional services firms that such research can be very useful. But because so many factors affect growth and profitability, we were skeptical that research would play a significant role.

We divided the firms into three groups:

  • Those that did no systematic research into their target market
  • Those that did systematic research occasionally
  • Those that did frequent research (at least quarterly)

 
To our surprise, we found a clear — even dramatic — correlation between systematic research and firm growth and profitability. The more frequently you do research, the faster you grow and the more profitable you are.

What kind of research? It's important to note that we ruled out informal research, such as talking with clients or keeping up with industry publications. We also did not include client satisfaction surveys. Instead, we focused on systematic, structured research that helps you understand and track your target market.

Why would research have such a powerful impact? We believe that when you understand your target market you can better anticipate prospective clients' emerging needs to develop high margin services and efficiently market them. What is your interpretation?

You can learn about the importance of market research and other growth strategies in our Professional Services Guide to Research.

 

 

 

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Aug 29 2011