As an entrepreneur, you know that your customers are the driving force behind your business. Without their patronage, your company wouldn’t stay afloat.
That’s why it’s essential to conduct market research on your target customers. If you’re going to sell to someone, it’s in your best interest to understand their habits, preferences and needs so you can cater your offering to them.
Conducting market research is an essential pre-launch step when starting a business. However, it’s also a good idea to continually review and refine your research to ensure you’re keeping up with the evolving needs of your customers and the larger market.
The purpose of market research
Businesses need to know
- who their audience is,
- how their products or services solve a particular issue of that audience,
- how to reach the audience, and
- how to stand out among competitors.
Thorough market research can help you uncover the answers to these questions.
Disruptive Advertising defines market research as “the systematic approach used to gather information about your audience, your competition, your business and how the three all interact.” This includes your competition’s price points and offerings, and how they compare to your own.
Market research can be broken down into two parts: primary and secondary research:
Primary research
Primary research comes directly from the source: your target customers. Through research methods like focus groups, surveys and interviews, you’ll better understand exactly who your customers are and gather information that will help you develop buyer personas so you can target your efforts.
This type of research can start as an exploratory effort (identifying common problems), then lead to specific research (identifying solutions to these problems). From there, you can focus on bridging these gaps and solving your customers’ issues. This will help you understand your business’s purpose and inform each decision you make along the way.
[For a complete guide, see: A Guide to Conducting Market Research.]
Secondary research
Secondary research comes from the public and is likely already available at your disposal. Your sources might include public sources (like government statistics), commercial sources (like market reports) and internal sources (like your organization’s own historical sales and marketing data). Review the data you collect to identify trends or patterns, and use that insight to improve marketing efforts and drive sales.
Before conducting your research, you’ll want to define what information you’re seeking.
How to conduct market research
Before conducting your research, you’ll want to define what information you’re seeking. Maybe you’re unsure of where your customers hang out (social platforms like Instagram or Facebook) or how they prefer being marketed to (email, social media, etc.). Rather than taking a broad approach, invest your efforts in these specific areas and research each of your major questions until you are confident you have a data-backed answer.
First, use primary research, gathering insight through sources like interviews and surveys. Find out what your potential customers want, what issues they might have and how you can help them. From there, you can move on to secondary research, analyzing your competitors’ and customers’ habits.
If you’re on a tight budget, don’t be afraid to get creative with your research approach. There are many free resources to try before investing in an expensive method. Active Campaign suggests using platforms like Quora and Reddit to ask questions related to your industry, and even search Facebook for consumer and professional groups related to your field. Form connections with people in your industry, establish yourself as an expert, and develop and market your products and services accordingly.
Your loyalty to your customers is just as important as their loyalty to you. You want to build a business that is mutually beneficial to both of you, and market research is the best way to do that.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
