Market Research is an essential tool for businesses striving to remain competitive and understand their customers better. However, with cost-cutting initiatives becoming increasingly common, many companies may consider eliminating the external research provider budget and relying solely on their internal research department. While this approach might appear to be a convenient and cost-effective solution, it can lead to several significant challenges that undermine the accuracy and value of the insights gained.
Relying entirely on internal market research is like marking your own homework. While it may seem easier and more efficient, doing so can jeopardize your insights and ultimately impact the growth and strategic direction of your company. Below, we explore three major pitfalls of relying solely on internal research and provide suggestions for avoiding these challenges.
Market Research Problem #1: Lack of Objectivity
One of the biggest problems with internal research is the lack of objectivity. An internal research team, while knowledgeable about the company, is still part of the organization. This means they often share the same biases, assumptions, and internal knowledge as the rest of the company. As a result, research is approached from a pre-formed idea of the desired outcome rather than from a neutral starting point.
This lack of objectivity can lead to surveys and other research methodologies being designed to confirm existing assumptions rather than to uncover new insights. Even if the findings support your current strategic direction, that doesn’t mean you’re on the right path. The danger lies in reinforcing the status quo without challenging underlying assumptions or exploring alternative possibilities.
Solution: To counteract this problem, external research providers can offer a fresh perspective. They approach research with no internal biases or preconceived notions, ensuring that insights are genuinely reflective of the customer experience rather than the company’s internal agenda.
Market Research Problem #2: Blurring of Business and Research Objectives
There is a fundamental difference between business objectives and research objectives. The role of research is to uncover objective, unbiased insights, even if they contradict business goals. However, when internal teams conduct research, the line between these objectives can become blurred. When the same people responsible for business strategy are also conducting the research, there is a risk that findings will be cherry-picked or framed in a way that aligns with the company’s desired narrative.
This phenomenon can lead to what’s known as “confirmation bias,” where only the positive or supporting data is highlighted, and critical insights are downplayed or ignored. For example, think about how people often crop their social media profile pictures to show off their best side—it’s still an authentic image, but it may not be a true representation of the whole picture.
Solution: Working with an external market research provider ensures that the research remains independent of business objectives. Even when findings are difficult or contradict company strategy, external partners can present the full picture, offering unbiased insights that allow leadership to make informed decisions.
Market Research Problem #3: Lack of External Perspective
Internal research teams are often too close to the business to provide a genuinely fresh perspective. When you only examine your company through an internal lens, you’re more likely to see everything in relation to your position rather than the customer’s point of view. This can create blind spots, where opportunities for improvement are missed, and decisions are made without considering the full breadth of customer needs and market conditions.
A lack of external perspective can lead to what’s called “perspective paralysis.” This occurs when internal research focuses too much on reinforcing the company’s existing position and does not take into account the wider market or changing customer expectations. In other words, you end up researching yourself into a corner, reaffirming what you already believe instead of gaining new insights that could spark innovation or change.
Solution: External research providers bring the crucial outside perspective necessary for challenging assumptions and identifying opportunities for growth. By incorporating external viewpoints into your market research, you ensure that your insights reflect both the internal and external landscape, offering a more balanced and comprehensive view of the customer experience.
Striking the Right Balance: Internal and External Market Research
This isn’t to say that internal market research is inherently flawed or doomed to failure. In fact, internal teams often have valuable insights and deep knowledge of the business that can enhance research outcomes. However, relying solely on internal research is risky, as it limits the scope and objectivity of the insights gained.
To avoid the pitfalls outlined above, it’s crucial to strike a balance between internal and external market research. Here are a few strategies to achieve this balance:
- Diversify Your Research Suppliers
Just as having your best friend grade your homework might not provide the most objective feedback, relying on a single research partner—whether internal or external—can limit the scope of your insights. Instead, vary your research suppliers to gain a broader range of perspectives. Different research providers bring different methodologies, expertise, and viewpoints to the table, ensuring a well-rounded and accurate set of findings. - Mix Internal and External Research
Having a healthy mix of both internal and external research is essential. Internal teams can provide valuable context and deep company knowledge, while external partners bring objectivity and an outside perspective. This combination ensures that your market research reflects multiple viewpoints, leading to better-informed strategic decisions. - Be Mindful of Research’s Role in Decision-Making
Ultimately, market research should inform and shape business decisions—not the other way around. Be mindful of the role that research plays in shaping your organization’s strategy. Ensure that insights are used to challenge assumptions, identify opportunities, and drive innovation rather than simply supporting existing business cases.
Conclusion
Market research is a vital tool for understanding customer needs, tracking market trends, and driving business growth. However, relying solely on internal research carries significant risks, including a lack of objectivity, blurred objectives, and limited perspectives. By balancing internal and external research efforts and being mindful of the role research plays in shaping business decisions, companies can gain more accurate, comprehensive insights and make better-informed strategic decisions.
In today’s competitive business environment, the companies that thrive are those that leverage market research to its fullest potential—combining internal knowledge with external expertise to unlock new opportunities and drive sustained growth.
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