The Value of Market Research

Starting a New Org? Don’t Skip the Market Research

Having been involved in the design and formation of hundreds of consortia and associations, I’ve had the pleasure of experiencing many groups make the exciting transition from idea to execution. As we’ve shared in past articles, there are many factors that optimize a group’s chances for long-term success. One element that can be imperative for any newly forming group: market research.

In its most simple form, market research aims to answer the simplest of questions: if I try to sell this product or service, will anyone buy it? While industry collaborations are not generally selling products and services, they are offering memberships into their organization. At the end of the day, becoming a member of a group is a purchasing decision for the prospective customer.

Performing market research around the formation of a new industry consortium, professional association, or standards group does not need to be hard or complicated. At a minimum, it generally entails sharing a high-level outline of your plans for the organization including: its purpose, its structure, what you intend to provide or do, the projected cost to participants – all in the hope of gathering feedback and potential interest. These can (and should) be casual conversations that are more geared toward collecting feedback than commitments to participate. The more decided “sales pitch” should come later. In my experience, when you share an idea and ask for feedback, most people tend to give it to you. And this doesn’t have to be an exhaustive process. If each founding member of a newly forming group picks 3-4 companies already in their peer or partner network to solicit input, that should be sufficient to gather some truly valuable recommendations and perspectives.

So, what can be expected when groups go through the process of collecting market feedback? The results can vary. Sometimes, the feedback coming in can be showstopping (i.e., “really, really bad idea – don’t do it!”) and sometimes it can be focused on optimization (“great idea, but what if you focused on this,” or “we’d definitely sign up for this, but only if the dues were a little lower”). Even better is when your organization reflects and includes the feedback you gathered in the market research phase, you’ll find that prospective members are more likely to join.

Recently, here at Virtual we did some work with two newly forming organizations that took contrasting approaches on market research – and ended up with very different results because of it.

One organization ran three different “stakeholder feedback sessions,” collected feedback from each in a formal way, and then took nearly two months to reflect on the feedback provided and used it to optimize their organization’s mission and model before moving toward launch. The result: a soft pre-launch membership campaign netted more than 50 member companies. They expect dozens more to join when they officially open their doors.

The other organization we worked with took a very different approach. Their founders group kept their heads down and kept ideas to themselves. They quietly planned the launch of their organization and built out a robust operational infrastructure that would be ready for members to enroll – once they opened the doors. Relying on their own expectations and avoiding external input. Guess what: they launched and nobody joined. It was then that they reached out to some of the companies they thought would join, and they received consistent response: “Interesting idea, but it’s just not something we see value in joining.” Had they asked first, their launch and expectations may have resulted in different planning.

As the saying goes, a little of the right effort up front can lead to great success down the road.

To learn more about Virtual’s services and how we help organizations that are forming, growing, or transforming, click here.