NEWS5 July 2016

MR agencies must target SMEs

Behavioural economics News UK

UK – In his presentation ‘Turning a nation of shopkeepers into a nation of market researchers’ Alex Johnston, director at Jigsaw Research, urged market researchers to hone their communications and target their skills at SMEs.

Speaking at last week’s Market Research Society B2B conference, Johnston said that the traditional market for market researchers – large corporations – was small and getting smaller. They account for only 0.01% of businesses in the UK.

The 99.9% of SMEs account for 47% of private sector turnover and 60% of private sector staff.

But Johnston warned that this group of businesses did not embrace marketing – with an average marketing spend of just £24,000 and only 30% of SMEs advertising. The barriers most often cited were: expense, lack of expertise and lack of time.

"SMEs lack knowledge of the ‘why’ not just the ‘how'," said Johnston.

  • 45% of SMEs said they didn't know what sort of research to do
  • 41% didn't know how to go about doing market research
  • 40% didn't know how to apply the results
  • 43% said they didn't know what benefit they'd get from doing market research
  • 27% said they had no need to do it.

Johnston pointed to a number of reasons for SMEs reluctance to partake in market research, not least it’s low priority ( 47%) and being put off by the marketing jargon ( 45%). He said other behavioural biases were at play such as status quo bias – ‘I'll do it next quarter when we're quiet'; social norming – ‘my competitors will do it, we'd be daft not to'; regret aversion – ‘I'm worried about buying the wrong thing'; and over confidence – ‘I don't need anyone else to tell me about my customers'.

However Johnston said the good news for market researchers was that 60% want to find out more about customer experience, 34% about pricing, 33% NPD and 33% branding. So there is the desire to find out more among this group of businesses.

He closed his session asking researchers to think about a number of things including what products could be developed to best help SMEs and how agencies could overcome the barriers of time, money and knowledge.

Alex Johnston won the award for best overall contribution to conference (pictured).