To be successful in business you have to have an understanding of your own products or services, your customers, your competitors, and your industry. Market research is the process by which you gather, analyze, and interpret information, such as economic shifts, current market trends, and the spending habits of your customers, in order to validate or improve your position in the market. It helps you determine how and where to market your business, to whom, and at what price point, before committing substantial resources on what may turn out to be a lost cause. When performed on a regular basis, market research can become a line of communication with your customers, telling you how your customers perceive you, and minimizing potential business loss by identifying objections or issues before they can arise.
The process for performing market research differs based on a variety of factors, including what information you have available from previous research, how long it’s been since you completed previous research, how long you have been in business and what data you have available about current customers, what specific information you are looking for, and the industry you are in. If you’d like to discuss the specifics of your business situation and learn more about how market research can improve your position, please!
Here are some of the major goals of market research. Although this is by no means a complete list, it should give you a good idea of why market research is invaluable for every business.
Whether you are a business about to launch, or a business that has been established for years, it’s incredibly important to understand exactly who your target demographics are and what their lives look like. When you can clearly define who you are trying to reach, and how they want to be communicated with, you can strategize marketing campaigns that are more efficient, cost effective, and ultimately realize more sales. During this process, we work to identify characteristics about your potential customers such as gender, age, household makeup, relationship status, income level, geographic location, communication preferences, other brands they gravitate towards, media they consume, and values they identify with.
If you are an established business, you should be actively reviewing any data you have about your current customers. Market research can help you identify how your customers learned about you, why they chose you over a competitor, what resources influenced their decision, if they would recommend you to friends and family, and what it would take to keep them loyal to your brand.
It’s important to establish realistic business goals to continue to drive your business forward. As you collect information through market research, you’ll have a better understanding of what those realistic business goals look like for your specific business situation. These goals may be areas of potential growth (geographic or product/service niches), revenue targets, budgeting numbers, positive public recognition, or customer acquisition goals.
Using the shotgun approach for your business’ marketing is often wasteful and ill-informed. The more targeted you can make your marketing campaign, the higher the chance you will not only see a return on your investment, but tap into the customer base that is most likely to become brand fans. From your research, you’ll justify how to price your product or service, what target demographic will be interested in your product, what messaging they want to hear, and what media you should use to reach them.
If your business is facing a hardship, such as a decrease in sales, market research can often help identify where the issue lies. You may find that brand awareness within your target demographic has lessened, a new competitor has entered the market, or an alternative product has become available. Market research can even help you understand the motivations and challenges facing your employees or management.
When your business is ready to strategically grow, market research can help you determine the best place to open a new retail store, how your customer base will respond to a new loyalty program, if it’s the right time to enter the online marketplace, or the market’s readiness for a new product or service. There are also opportunities for examining your competitors’ strengths and weaknesses as they grow or adapt to industry changes.
As a result of your research, you may find new areas of opportunity with your target demographic that are either not being filled, or are being filled poorly by a competitor. The sooner you can identify these opportunities, the sooner you can put a plan into place to capitalize on them, giving you another differentiator from your competitors.
Market research is an important component to business strategy, and should be done throughout the life of your business. Investing in market research will allow you to make business decisions founded in the realities of your specific business, not just generalizations about what you think may be a good decision.
If you’d like to learn more about how market research could move your business forward,today.