As a small business, you’re encouraged to perform market research to learn about your audience and stay ahead of the competition. However, in a world full of technology, we often forget the real reasons behind market research. We think it’s time to take things back to basics. What is market research? Why should you perform market research? What different types of market research exist? You’ll learn the answers to all these questions today.
As the name implies, market research is the process of gathering any sort of information that can be used to learn more about the market. For the most part, this is split into two:
One without the other would restrict your business because a market affects customers just as much as customers change a market.
The benefit of market research is that it helps businesses understand more about their target market (both the state of the market itself and the customers that make up the market). However, many may be asking “why would you want or need to know this information?”.
This information helps you to improve interactions between the brand and consumers, to design products that better meet the needs of consumers, and to encourage a more tailored approach toward content. When you know more about what the target market needs, it’s easier to develop products and create content that resonates with this audience. Too often, businesses create products and content that they enjoy personally, market research allows for an objective approach and to distance yourself (and your emotions) from the process. You can’t argue with data.
Elsewhere, you can also use market research to:
Market research also often informs businesses of what the competitors are doing well and where they are lacking. If you can cover things missed by all other companies, you’ll meet the needs of the consumer more effectively.
Ultimately, everything we do as a business is for the consumer. Why do we create products? Who do we want to create content for? Why do we create content? Why do we wake up early in the morning, leave home in the dark, and work long hours? The answer is always the consumer. For all businesses, the end goal is to have them spending money on our products. There’s no way we can do this without having a deep understanding of these very people.
We’re going to look at examples of primary and secondary data in the next section. However, another way that market research helps is by offering more detail than analytics, statistics, and graphs. These sources of data answer the question of what, but market research delves into why. Knowing that something is happening is the first step but learning why is the difference between taking the right and wrong steps following this news.
All in all, knowledge of the target market is essential for any business. Over time, you might learn that customers use your products in a way that you didn’t expect. Without market research, you wouldn’t have realized this new advertising opportunity.
Not all market research is equal, and this is because there are different types. By utilizing the many variations of research, we learn all about our competitors, customers, location, industry/niche, and more. There are two main types of research:
This describes any research that you have gathered from an original source. Common examples of primary research include:
As you see, these are all types of research that you can generate without a third-party. By looking at product reviews and feedback, you get a stronger idea of what people like. When using focus groups and surveys you bring qualitative feedback which comes back to the idea of answering why things happen rather than just what happened. The more detail, the easier it is to address issues and reposition the business in order to make consumers happy.
This is data collected by a third-party. Such as:
Just because a piece of research is secondary in nature, doesn’t necessarily mean that it’s quantitative. Depending on where you pull the data from, both primary and secondary research have the potential to offer quantitative and qualitative insights. While quantitative is designed to gather statistics and a superficial level of understanding, qualitative data digs into why. For example, this could be why people respond to certain advertising campaigns or why they have certain beliefs or views.
We touched on the idea before, but one of the most important aspects of market research is that the research does all the talking. As a business, we can’t let our emotions or opinions interfere. We need to be willing to listen to the data, regardless of where this data goes and how it impacts our personal views. Without remaining open-minded to the results, we sometimes shape them to what we want rather than reading the data accurately.
If you’re wrong, be willing to admit it. Sometimes, the audience uses your products in a different way to the one intended. You can ignore this and continue advertising to the wrong market, or you can embrace the difference and target more of this ‘new’ market.
It’s easy to feel overwhelmed by the whole process. You set up hundreds of surveys, contact lots of your target market, and then have no idea where to start when the surveys are sitting on the desk. In the beginning, you should define your objectives because this will help with decision-making later.
When you have an objective in mind, it’s easier to choose between the different types of research. Will surveys allow for the best insights, or will this come from focus groups?
We also advise businesses to think about timings and budgeting. How much time do you have to generate results? For those with a shorter time frame, this might exclude certain types of research and force you into others. Those with a smaller budget may be forced into a small-scale operation or one type of research over another. With this in mind, we recommend planning your research as soon as possible. Don’t cut down your research opportunities just because you’re scared to get started.
It’s important to know that you aren’t alone in this process. Whether you lack time, ideas, or can’t afford to waste resources by doing everything yourself, you can hire a market research service to take charge of the process. With the right company, they’ll stick to your schedule and budget, work with your objective in mind, and prove more of an investment than an expense.
Market research will only help if you’re willing to act on the insights that the research generates. Otherwise, you’re just paying for some words on a piece of paper (or, these days, words on an expensive screen!).
When faced with a lot of data, we recommend categorizing it all based on the information that is and isn’t relevant for your needs. Often, businesses get caught up on information just because it’s interesting even when it won’t contribute anything to the business. Once the data is organized, look for trends and patterns.
What happens if you don’t learn any patterns or trends? It might be that the data is inconclusive. In this case, don’t be afraid to keep collecting and keep pushing. When the conclusions finally come, act on them to improve the position of the business.
You now have an advanced understanding of market research, as well as the different ways to learn about customers and the market. As long as you keep this information in mind, there’s no reason why you can’t generate a return from all market research investments and improve sales/profits soon.
Discover valuable tips, tricks, and industry news with a specific focus on the role of artificial intelligence in social media advertising.