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August 2008
In this month's issue:
- Knock knock. so what?®
- Best Practices: Persuading the CFO to protect the market research budget
- LRW Sightings
Knock knock. so what?®Budget cuts are no joke. Has your CFO been knocking on your door with ax in hand? Slash. Chop. Hack. Of course, the CFO’s job is to manage the financial risks of the company and in times of uncertainty or decline, reducing costs often makes sense. The CFO probably isn’t an expert in deriving great value from market research -- but you are, so prepare to make the case for using research to drive business results and improve financial performance during the tough times.
Best Practices: Persuading the CFO to protect the market research budget To help your organization effectively manage the risks from other cutbacks, and to ensure that new initiatives will help you successfully overcome softness, let your CFO know that slashing the market research budget should be near the bottom of his or her to-do list. Research shouldn’t be viewed as a cost center but as a profit-maximizer.
Use research to identify potential areas for cost-cutting in line with financial goals.
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Reformulations, reconfigurations and size changes can drive costs down. Do you know which adjustments can maximize revenue and profits without undercutting demand and brand preference?
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Are you sure your service’s current value-adds are in line with what your customers want? Features that people thought they couldn’t survive without yesterday may have become expendable in place of basic service delivery.
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Trade-off or TURF analyses can help you determine which underperforming SKUs can be cut from the line to help you cut manufacturing or distribution costs.
Carefully construct research to determine how to reverse sales softness and declines.
- Keeping research in the budget allows you to make fact-based decisions to prevent costly errors like running the wrong ad or raising prices too high.
- Positioning and ad testing can help you answer the questions: “Does our new campaign communicate the real value in our value equation? Will it combat threats from our low cost competitor?”
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Price declines or heavy promotion activity may seem warranted to drive short-term sales. But … will these near-term actions make your brand worth less in the long run?
Leave money in the budget for a pair of shades.
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Be sure your CFO understands that cuts in research are the opposite of what your company needs in order to position itself for a bright future.
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Twelve months from now, your organization will be hungry to understand the changes in your customer’s psyche and the resiliency of your brand’s value proposition.
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You want to be in position to launch winning new products into the marketplace as the storm clouds roll away, so protect research that keeps the development pipeline flowing.
For more suggestions on making the case for preserving your research budget to drive financial performance contact us. We can provide you methodologies and case studies that demonstrate how research is linked directly to measurable financial results on projects that range from product development to customer satisfaction to brand development. This is what makes our company tick.
Wherever we go, so what?® helps us deliver the answers that keep your business on track. Here are two upcoming events where we'll be showing how a simple question helps us turn insight into impact.
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