Katlego Pearl Lekwale
Research Consultant
If ever there is something that irks a businessperson, it is sluggish business or a fall in demand for goods or services. Every business requires constant inflows of cash and therefore every entrepreneur will be glad when significant cash is coming in through sales.
What is business stagnation?
Business stagnation basically refers to a scenario where a business stops growing, sales remain stagnant or reduce and at times clients leave and that obviously is a territory which no businessperson would like to find themselves in. Unfortunately, the advent of COVID-19 and depressed diamond revenues for the country brought that reality to many entrepreneurs through a reduction in sales, disruption in distribution chains, as well as loss of clients. This situation, as if it were not bad by itself, was worsened by the Russia-Ukraine war as well as the USA versus Iran war, which resulted in fuel prices sharply going up. That technically means that entrepreneurs will constantly have to increase their prices, but that will not be feasible if a business has already started seeing stagnation.
The quandary
Whilst it may be clear why business stagnation may exist, most entrepreneurs may not be able to tell the reason for a slump in business, especially considering the ripple effects of COVID-19, depressed diamond revenues and the above-mentioned two wars. Therefore, market research, i.e., a process of getting into a business’s market and asking clients relevant questions regarding the demand for goods and services as well as how to improve them, will cure or provide clues as to what is required to solve business stagnation. At times it may be necessary to cut costs, improve on service delivery, or increase the quality of goods and services. Therefore, in a nutshell, if your business has stagnated, the cure is for you to find out why and that can only be done through market research.
Market research is critical
Another important aspect of market research is that it helps businesses understand changing customer preferences. Customers may gradually develop new expectations regarding product quality, pricing, convenience and customer service. A business that fails to recognize these changes may continue offering products or services that no longer meet market demands. Therefore, surveys, interviews and customer feedback are key to establishing what the business needs to do to remain relevant in the market.
Changes to the economy
In addition, changes to the economy also have a direct impact on the volumes of goods and services sold. The recent decline in government revenues meant that the economy slowed down and there was little flow of money from the government to the private sector, which translated into less disposable income for the ordinary man in the streets. The reduced incomes automatically mean prioritisation of expenses, which can result in reduced demand for goods and services. Therefore, if a business is to survive in such conditions, it needs to establish the reasons resulting in the reduction in business through market research.
Conclusion
As a research firm that focuses on market research, polls, surveys, among others, we hope to bring insights to you through today’s article on the critical importance of market research when a business stagnates. We hope that this article has helped shed a bit of light on the importance of data collection and analysis when a business has stagnated, as data is key for informed or data-driven decision-making.
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