When exploring new markets as an association, whether that be in new geographical regions or new types of services, it is imperative that you have a map to guide you. You can acquire the information you need before diving in and investing in a project through careful research and data analytics.
I work for a business to business association, the Petroleum Equipment Institute. A couple of years ago, we noticed two distinct changes in our membership base. First, the lines between membership divisions that were set up back in 1951 were beginning to blur, because members were struggling to determine which division they belonged to. Second, while our US membership base started to shrink, we saw growth internationally, in regions that were outside of our original charter.
Research allowed us to make sense of these changes, and we used the data that we acquired to pivot and find the best possible path of business development to follow going forward. Using what we learned and continue to learn, I have put together a guide to successful data acquisition and analysis.
FIND YOUR STARTING POINT
Get to know your I.T. or data warehousing manager and take a look at the health of your data. Has it been updated recently or is it cobbled together from various legacy systems? From there, you can form a picture of whether your data conforms or differs from the external aggregate data from publicly available sources. You can also identify whether your organization is an outlier or following the market.
CRAFT THE RIGHT QUESTIONS
I visualize the acquisition of data as a race: you start at a baseline of knowledge and aim for the finish line, which is the information you need to solve your problem. Keeping the finish line in mind helps you craft the questions you need to ask during the race.
When you’re working on research with a large group of people, particularly a board, two types of conversations may come up. The first is they ask a leading question as part of a survey, one that implies a particular answer. The second is a loaded question, often including charged words, that is biased towards a particular opinion and dismissive of others. These questions can send the research project in skewed directions and obscure the truth of the data.
When this happens, it’s best to pause for a moment and take a breath. What is the concern that the board are projecting onto this task? Reflect it back at them in your own words to make sure you’ve got your finger on it. Then ask them to pivot back to finish line on the horizon. Validate their concern, then remind them of the common goal to reorient everyone towards it. Remind them that research and data is a tool, not a conclusion. This takes the pressure off the process. The board will be more likely to move forward once their concerns have been noted.
BEWARE OF SPURIOUS RELATIONSHIPS
Spurious relationships are tricky. What’s happening is one of two scenarios. The first: two outcomes occur within a relatively short time span but you don’t know if they are related. The second: each outcome is occurring but there might be an invisible, lurking variable that you need to discover. When you notice a hole in your data, don’t jump to conclusions and try to connect the two.
There’s a pressure to present a complete dataset. You want to bring together the project, tie it up with a bow and present conclusions. However, gaps in the data are there for a reason and it is wise to leave them alone. See if you can find relationships but don’t feel a compulsion to connect the dots.
ASSESS RISK LEVELS
Risk is not a four letter word. It is an inevitable part of exploring new markets, because nothing is guaranteed, but there are ways you can minimize risk and make it acceptable to those involved.
Assign a numerical value to the financial risk for stakeholders when you suggest a course of action that could cause damage. There are statistical tools you can use to assess this. Come up with a criteria for low, medium, and high risk, in terms of the amount of money that could be lost. How much loss is the organization willing tolerate in pursuit of a goal? Breaking this down makes it easier for the board and stakeholders to process and distill risk. Guide them towards a level of risk that is acceptable to them.
It’s wise to note internal risk too, if you’re embarking on a path that’s new to your staff, culturally or logistically. Infrastructure may need to be put in place to attend to this. Remember: if you pursue a zero-risk policy, you are not disrupting or innovating at all.
Whitney spoke in the “Exploring New Markets: How Research, Analytics and Risk Assessment Can Help” session during SURGE Spring, an interactive virtual summit hosted by AssociationSuccess.org on May 2nd-4th. Click here to watch the sessions on demand.