How To Conduct Market Research For Your Small Business
Persistent and extensive market research is at the foundation of any successful marketing plan, aside from a good website with a responsive design. With so much information out there, though, it’s often a challenge to push aside much of the usual business mumbo jumbo and to narrow down your focus to what’s relevant to your business model.
The good news is, we can break down a complex market research process into simple, manageable steps which fresh business owners can tackle without losing sight of the end-goal.
Successful entrepreneurs have given us plenty of raw information about the nature of market research and its value to your business plan, and by applying some of this knowledge you can avoid some common pitfalls and move up your schedule on implementation and delivery.
The Purpose of Market Research
Market research is a rather broad study whose main objective is to examine and review the reasons why consumers will purchase a product.
It involves looking at factors like consumer behavior (including things like social, cultural, and societal influencers).
There are two main approaches to market research: primary and secondary.
Primary research studies customers more directly, by employing methods such as telephone interviews and online polls, whereas secondary research relies on third-party data found on market survey website, blogs, and other sources of industry data.
A comprehensive research plan employs both methods and in a general sense it should identify the following factors:
Who are your customers? They should be described in terms of age, gender, occupation, income, educational background, lifestyle, etc.
What are their buying habits? Learn more about their buying habits in relation to your product, and find out their leanings toward price, quality, quantity, etc.
Why do they buy? There should be an attempt to answer this question at some point as this will offer deep insight into the psyche of your average customer, and hopefully guide you in preparing the right elements to facilitate a purchase.
When starting out, business owners normally refer to a more rudimentary set of market principles to use as a foundation for presenting a new product or formulating a marketing plan.
If you prefer this type of extrapolated business study, it could offer some insight into the more generic aspects of your business; but keep in mind that some elements of (your) consumer behavior may need a more involved and self-directed study in order to decipher properly.
Market research requires major resources and hours of manpower to pull off, but some types of data can be purchased from independent research firms that sell information from industry studies.
For a more generalized type of data, it could be more reasonable to outsource or purchase this information from a third party. However, when trying to answer specific industry questions like “Why do customers need your product?” it makes sense to invest cash and engage your own workforce.
In-house market research takes the form of lengthy telephone interviews, intelligence gathering, crunching of numbers, and social media analysis, among others.
You can gather quite a lot of data from reviewing user habits on popular social media platforms; particularly if a large section of your audience is active.
Tools such as Google Analytics are made available for this same reason, and you need a similar tool to sort out the numbers and find out how they relate to your customers.
When conducting research, try to remain within your own industry and look at comparable enterprises and their data. Focus on the following:
- Companies of similar size
- Companies that serve a similar audience or the same geographic area (of course this would be global if you own a web-based business)
- Companies that operate using a similar structure of ownership. For example, if your business has two partners, look for other businesses run by two people as opposed to an advisory board or directors.
Remember: the more focused the research, the more value it has for your business. Since you can’t commit to research everything, concentrate on factors that have a direct — or indirect — impact on your business, and ones that will give you the quickest payback.
There are dozens of cheap market research alternatives like Small Business Development Centers and of course the Small Business Administration, which can guide you in developing customer surveys.
Are you a member of any trade association? These are great resources for secondary research. Remember the internet makes it possible to gather a good amount of information for free, so use all mediums available.
A nice website with a responsive design can only take you so far. If you want your business to succeed, conduct market research to ensure you provide what your target market needs.