Market Research in Houston: What a Good Study Covers

Market research in Houston goes wrong in a predictable way. Someone pulls a metro population figure, multiplies it by a spend-per-household number from a national report, and calls the result the market. In most cities that is merely lazy. In Houston it can be badly wrong, because the forces that set demand here are local, cyclical and concentrated, and a national average hides all three.

What follows is the checklist we use for a Houston study, whether the client is weighing a new location, a new service line, a contract bid or an acquisition, and what the work costs.

Why market research in Houston is different

Three features of this economy make a Houston study harder than the same study in most metros.

Demand is often derived from energy, even outside energy. A large share of Houston businesses sell to companies whose budgets follow oil and gas prices and capital spending: fabricators, industrial suppliers, staffing firms, logistics companies, equipment rental, even the restaurants and services that ring the plants. Their demand is real, but it is borrowed. A sizing done at the top of a cycle can overstate the market for years. A sizing done at the bottom can talk a good business out of a good move.

Trade areas follow freeways and drive time, not city limits. Houston is spread out, and a customer’s idea of “close” is set by the Loop, the Beltway and the commute, not by a ZIP code list. A study that draws a circle on a map and counts the households inside it will count people who would never make the drive.

Houston has no conventional zoning. It is the largest US city without it, and land use is governed largely by deed restrictions and city ordinances instead. For site work that cuts both ways. You have more freedom to locate, and so does the rival who can open next door. Checking the deed restrictions on a site belongs inside the study, not in a later step for the lawyer.

The six parts of a good Houston study

A retail site in Katy and an industrial service line along the Ship Channel look nothing alike, but a study worth paying for covers the same six things for both.

1. A scope tied to one move. “A third location west of the Beltway.” “A second crew for Gulf Coast plant work.” Naming the move keeps the study from sprawling into everything that might be interesting about the metro.

2. Market size, built two ways. Top down from government and industry data, and bottom up from countable customers and realistic purchase rates. When the two answers disagree, the gap is the finding. We explain the method in how to size a market.

3. The cycle. For anything tied to energy, petrochemicals or the port, the study should show demand across a full cycle, not one year, and name the assumption that moves the answer most. If a 20 percent cut in customer capital spending turns a yes into a no, that belongs on page one.

4. The rivals a buyer would really shortlist. Their pricing, their positioning and where they are thin. In B2B Houston that often includes the customer’s own in-house team, the rival most studies forget.

5. How the customer buys. Industrial and medical buyers in Houston rarely buy from a website. They buy through approved-vendor lists, safety prequalification, master service agreements and procurement cycles. A market can be large and still closed to you for a year while you get qualified, and the study should say so.

6. A verdict. Proceed, stop, or proceed with a changed plan, and why. The finished pages of our sample competitive intelligence report show the format.

Concentration is the Houston risk to look for

Many Houston markets are a handful of large buyers rather than thousands of small ones: refiners and chemical plants, the hospital systems around the Texas Medical Center, the major shippers moving through Port Houston. That changes the math. A market with ten buyers is not a smaller version of a market with ten thousand. Losing one account can be a quarter of the business, and winning one can take a year of qualification.

A good study names the buyers, estimates what share of their spend is realistically open to a newcomer, and says how long it takes to get through the door. Without that, it has measured a market you may not be able to enter.

Houston data you can pull yourself

Plenty of the groundwork costs nothing. County Business Patterns from the Census Bureau counts establishments by industry for Harris, Fort Bend, Montgomery and the other metro counties. The American Community Survey covers households and income by tract. The Bureau of Labor Statistics reports employment and wages by industry for the Houston metro. Port Houston publishes its own trade statistics, and the University of Houston hosts a Small Business Development Center network that advises owners at no charge.

Spend a week there before you spend money. Bring in outside help once a lender, investor, landlord or partner has to rely on the figure, or once the amount at stake makes a wrong read painful.

Pricing for a Houston study

CMA’s market research has two fixed prices, and Houston work is priced the same as Dallas work:

• $1,250 for one focused question. For example: does this trade area west of the Beltway support another location, or which three firms would a plant buyer compare us with?
• $2,500 for comprehensive desk research with TAM/SAM/SOM. Total, serviceable and obtainable market, built from both directions and reconciled, with the cycle sensitivity and every assumption written out.

The scope is set on a short call and the price is fixed before anything starts. When a study feeds a lender package or a raise, we build it to drop into the business plan so the two documents use the same figures.

We are based in downtown Dallas and run Houston studies remotely, traveling down for site visits and in-person buyer interviews when those matter. Our Houston page explains how engagements in the city run. To talk through a Houston move you are weighing, book a call.