08 Dec 2014
The ringing of the tills
Years ago Marks & Spencer used to brag that the only market research they did was to listen to the sound of the ringing of the till. It told them all they needed to know about quality, product popularity and customer needs. It sounded arrogant, complacent and short sighted then, and it was. M&S lost its way in the last 10 years, with shrinking sales and a tumbling share price. Now, they seem to be repairing their reputation and refocusing. Their Christmas ad is a success and although clothing sales are still down there has been some progress in womenswear. Food is a star and cash flow is strong.
M&S listened to the tills but what they didn’t hear was the sound of competitors’ tills ringing as customers deserted. Those who defected because they couldn’t find the clothes they wanted stayed away and bought their food and homeware elsewhere too. It was a costly exodus.
It’s a classic example of tunnel vision. So long as profits held up they measured what was under their noses, but ignored what they couldn’t see. Ex-customers were invisible. They also overlooked the progress rival stores were making on and offline, some of whom they barely classed as competition. They did not see what was happening until too late, while those who did their research have taken them to the cleaners.
The parallels with home improvement and construction are obvious. Mention research to most companies and the usual response is that they know their customers and their preferences and all they need to do is watch their bottom line. But the market is undergoing a dramatic cycle of change – and not just as a result of five years of recession. Smartphones, for example, are changing the way we buy and if you don’t know where the market’s going and haven’t got a strategy to stay ahead you’ll soon be left behind. You may be growing now but will you grow tomorrow?
Some companies think it’s their suppliers’ job to research the market and provide the information free. This is short sighted. Suppliers’ interests and their customers’ do not necessarily coincide. It might save money now but in the long run it could cost business, as valuable markets slip through your fingers.
Your rivals aren’t asleep. They are doing their research into your customers to find out what they need to do to win. They are growing, and hungry for more, and you are in their sights. If it can happen to the (once) most admired retailer in Britain it could happen to you. Time for research?
For more information on how research can benefit your business – from brand and reputation surveys to customer satisfaction and competitive advantage analysis – contact Lucia Di Stazio on 01453 521621 or email@example.com
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