The Value of Perfect Information in B2B Market Research
Often we are asked what the purpose of survey-based research is. After all, a brand often wants to send their sales message to potential buyers of their products; why waste time speaking with them about anything other than just selling the product? Brands want to produce revenue; that’s their purpose. Their sales message is the central theme and that’s what they want to promote. The sales pitch is all that matters for this company and this brand, and their culture wants to keep the emphasis on sales and revenue generation. Fair enough.
However, we see that the sales message can sometimes be left untested and unchanged for significant lengths of time. B2B market research presents an alternative thought on knowing the value of this data. It is commonly referred to as the “Value of Perfect Information, the difference between the expected value of profit with perfect information and the expected value of profit without perfect information.”
What if, possibly, the value of the message in a brand’s sales pitch is unknown? Or worse, what if the brand is associated with a cost, message, or application the customers don’t value? Significant resources are being poured into “business development” - only to hit a roadblock.
Consider the example of GPS in your car. These GPS tools provide helpful information to drivers. Roadblocks, construction, and traffic get the driver closer to perfect details. But consider a driver who prefers to drive a giant truck or a faster sports car rather than listening to their GPS. The issue, such as traffic or a blocked road, is not resolved with a fancier or bigger car; it is determined by deviating from the original path. This is a similar analogy to trying to sell a product when customers are looking for an entirely different solution; more salespeople and bigger budgets aren’t going to solve the issue.
Take, for example, this plot from our Residential HVAC Brand Awareness report. As can be seen, HVAC contractors overwhelmingly prefer one characteristic of a particular brand. This characteristic is the one that drives hundreds of millions of dollars in revenue over their competitors, yet none of the competitors seem to want to compete on this value. This is akin to turning on the GPS and seeing significant delays in your drive, ignoring them, and maybe driving a faster and bigger car.
https://dashboard-server.com/RHBA
Even if you do not use a market research agency or a survey platform to reach out to prospects and customers, consider asking your customers why they buy. What are the reasons they chose who and what they chose?
“In sum, information has value to the extent that it is likely to cause a change of plan and that the new plan will be significantly better than the old plan.” Artificial Intelligence - A Modern Approach, by Stuart Russell and Peter Norvig
