Don’t even think about developing new service offerings without conducting market research first. Uncover some data, then consciously calculate your risk and proceed with eyes wide open.

Don’t even think about developing new service offerings without conducting market research first. Uncover some data, then consciously calculate your risk and proceed with eyes wide open.

In questionable and volatile economic times, firms feel the need to spend time being introspective. What are we doing that should change? Is what we’re doing right for this time? What services are we offering? What new or different services should we provide? Where do we need to be? Now is a great time to re-evaluate your firm’s position in the marketplace and in terms of its service profile.

To stand the test of time as well as navigate the often choppy waters of the economy, a firm must be diverse. An experienced firm with a diverse offering of services will be able to sustain more clients than a specialty or boutique firm will. The old adage about not putting all your eggs in one basket applies. Single revenue streams or disproportionate amounts of business isolated in one discipline or client type simply won’t sustain a firm in the current environment.

On the other hand, be cautious about dabbling in new services or specialty areas with which your firm and staff have little experience. Diversification means a straightforward main focus on the talents and skills your company has to offer. An honest and diligent approach is the key to knowing if your own firm can comfortably take on a new ability with a measure of success or if another market or service is a better choice for your team. Effective diverse firms have adequate staff with the right skill sets and the right amount of talent to deliver their market specialties. Never overpromise and underdeliver: Your reputation will take a serious hit. You want to be known for the services you provide and the quality you deliver.

My own firm, Staffelbach, is an interior architecture and design firm founded in 1966 by my partner, Andre Staffelbach. We offer architecture, facilities planning, strategic programming and planning, change management, move management solutions, tenant development, graphics, and 3-D visualization. A decision to diversify was made early in our firm’s history to ensure our revenue stream would be protected when various market segments experienced a slowdown.

Staffelbach began offering rebranding and repositioning in the late 1990s and has won numerous awards for this work. Prior to launching this service offering, we completed extensive market research to determine the viability and potential of providing it.

Simply, to rebrand a building is to create a new image and breathe renewed life into an older property by bringing it new tenants and activity. It is much more than a marketing pitch; it is a life-enabling re-creation of space. As intellectual beings, people choose to visit and be a part of the spaces with which they connect. That is what rebranding is all about.

Often, the cost of new construction can be too cumbersome for an owner to handle, so demolishing and rebuilding the property is out of the question. This is especially true in times like today, when everyone is watching their dollars and the potential for return on investment.

Is now the time for your firm to expand into this or any other new territory? Market research will guide your process. Market research includes investigating who your competition is and what they are doing in the arena you are contemplating. Look for clues in the available raw material. In the case of rebranding, for example, are there abundant buildings in the 15- to 25-year-old range in the geographic area in which you work? Are these buildings in positive locations? Is there market interest in these properties? Do the owners of the properties have the ability to invest in improvements and enhancements? Do the potential structures convey a strong message in the marketplace and does a potential for increased leasing activity exist?

Research that elicits data to help you answer such questions and others will dramatically enhance your potential for success. Without this type of systemic approach, you will waste valuable time and energy.

Essential Info

For effective market research, you must gather, record, and interpret the information that will be needed to make sound, strategic decisions about your business. While there are many ways to conduct market research, the following techniques may assist you in gaining valuable input.

Surveys. With simple questionnaires, you can assess a sample group that represents your target market. The larger the sample pool, the more reliable the resulting survey data will be. Get to the heart of the matter. Be sure questions are logical and not easily misinterpreted. The simpler the questions, the better. Your client base affords you an excellent starting point from which to work. Surveys distributed via mail or e-mail with a cover letter explaining your intent are helpful in getting valid responses. (The responses you get may represent key indicators of who takes a genuine interest in your firm. Those relationships can and should be cultivated. For example, you may wish to involve the most engaged individuals in expanded roles such as board of director or advisor positions. )

Keep your survey short as this will encourage participants to respond. It is also possible to establish a survey base by gaining the participation of a group of clients, telling them how important this is to your firm, and encouraging them to give input. In this manner, you will create a survey pool that can provide valuable insight on customer opinions and issues over an extended period. Remember to feed and nourish this group with quarterly or bi-annual meetings that allow them to benefit from their participation.

There are many good organizations that can conduct market research for you. Such firms can help prepare and distribute surveys as well as assess the results with you. Costs range from affordable to expensive based on the amount of coverage you’re seeking and the complexity of the survey. Do not hesitate to consult the experts because they can assist in gleaning valuable information quickly and ensure that the information gathered will be valuable in your decision making.

Whether you work with internal staff resources or hire someone to do it for you, just be sure to the surveys are done.
Personal interviews. Personal interviews can include open-ended, unstructured questions posed to clients in one-on-one sessions by phone or in person. While the results are not as statistically reliable as surveys, the information garnered through interviews can be an excellent way to uncover issues related to new product or service offerings.

Focus groups. In focus groups, a moderator uses a scripted set of questions to lead a discussion among a group of pre-selected individuals. Frequently, these individuals are compensated for their participation. A focus group typically lasts one to two hours and is conducted in a facility with videotaping and one-way observation capabilities. Professional focus group facilitators can yield valuable insights from customer opinions.

Define your ideal customer. Visualize and describe the perfect customer for the service you are considering. Look at the overall profile of who that individual or company would be. Be very specific and compile the demographics. Define the clients who have the funds to invest. Where are they and how many of them are there? Are they present in adequate numbers to foster the needed revenue? Perform the due diligence necessary to find out if your market area will support this type of service. In short, is your target market adequate to make this service offering profitable?

Trying to develop new service offerings without market research is frightening and risky. It’s like setting out to chart new territory without a map. The beginning of market research can open new doors and be the start of valuable techniques that become an integral part of your business development program.

It is crucial to analyze your market and define your target market before launching a new service offering. Too many firms just plunge in without verifying the market, and they suffer in the long run. Consciously calculate your risk and proceed with eyes wide open. This will not only assist you with better decision making but will enhance the likelihood of a good return on investment.

Jo Staffelbach Heinz is president and chief exec­utive officer of Staffelbach, an interior architecture and design firm headquartered in Dallas. A graduate of Kansas State University, Heinz is a Distinguished Alumnae Fellow of KSU, was national president of the Institute of Business Designers, and is a Fellow member of IIDA.  She is a contributor to industry periodicals and a nationwide speaker for seminars and panels.