Market research is crucial in the running of any successful business, and allows you to make informed decisions that satisfy your audience and client base. But what is market research – and how can you integrate it into your strategy? To clear things up, we’ve detailed the benefits of market research, as well as the different methods at your disposal, how you can put the theory into practice, and some common mistakes to avoid.
What is market research?
The purpose of market research is to obtain relevant information around the buying habits of prospective consumers, customers, and clients, as well as gathering data around competitor performance.
There are numerous types of market research, each placed to help you achieve a better understanding of your target audience and industry. The key areas to focus your attention on are:
- Which customers should you be targeting?
- What does your target market currently buy?
- Who are your competitors?
- What will make your target customers buy from you?
Why is market research important?
Conducting market research allows you to gather a strong and rounded idea of customer personas and buying habits. Through analysing data and findings, you can more accurately draw up sales projections based on popularity, predict the viability of certain projects, and tailor your entire marketing approach.
Crucially, understanding how to do market research gives you an edge over your competitors, and allows you to quickly act on customer concerns, to give them a comfortable buying experience.
The benefits of market research
1. Research reduces risk
Market research helps to offer direction to your business, and tells you what you should be offering to consumers and the price they’ll pay. Having this information to hand is priceless, especially when looking for funding; by being able to evidence trends and consumer behaviour, you can open your business up to investment with minimal risk. Similarly, conducting market research allows you to investigate whether a certain product is worth pursuing, or whether you should focus your attention elsewhere.
2. Identifies pain points
Conducting market research allows you to identify your own company’s weaknesses, and the areas you need to address. When laying out your business plan, you should outline a balanced assessment of your brand, based on market research.
Analysing consumer responses to your market research questions also helps you to understand where your competitors’ pain points are, which should, similarly, form part of your strategy.
3. Makes spotting trends easier
It’s important to recognise the purpose of market research, and its value beyond one-off use. In fact, you should implement market research within your long-term business strategy. Through consistent research, it’s possible to notice trends and plot patterns, which can help to progress your brand. Once you’ve successfully picked up on industry trends, you can begin to tailor your market research questions to generate even more efficient customer data.
4. Take the chance to see how your company stacks up
As well as acting as a tool to help you establish trends and create buyer personas, market research also allows you to assess your current standing within your sector. Whether it be highlighting sales, brand value, or consumer sentiment data, market research can give you the inside track and offer guidance around what you could be doing better.
The types of market research
There are two types of market research:
- Primary research
- Secondary research
While both types of market research can prove beneficial, they each offer different value, depending on what your goals are. We’ve explored the differences between primary and secondary market research, so you can better decide which route to take.
What is primary market research?
Primary research is the practice of collecting information first-hand. Because you’re taking ownership over the market research questions, rather than relying on a secondary source, you can more easily manipulate the angles you investigate. There are a few primary market research methods you should consider:
1. Gathering customer persona data
One of the most common market research methods is gathering customer data to create persona profiles. This information comes directly from consumers themselves, and allows you to gain a better grasp over traits and behaviours. In creating personas, you’ll develop an understanding of a consumer’s background, habits, and social practices, which will help to build a more rounded picture of your overall audience.
2. Distributing surveys across your customer base directly
Surveying allows you to ask consumers market research questions, as a means to gather sentiment data and insight around how your company is perceived. This, in turn, allows you to improve. It’s one of the more traditional types of market research, and offers the flexibility to ask everything from open-ended conversation starters to direct questions.
3. Analysing your competition
The purpose of market research is to gather industry data. So, it’s only natural that competitor analysis should also be added to your list of market research methods. In fact, it should be a key part of your ongoing marketing strategy. To analyse digital performance, visit a rival’s website and immerse yourself in their customer journey. At each step, try to answer two main questions:
- What do they offer that you don’t?
- How can you take your findings forward within your business?
Secondary market research methods
Unlike primary data, which is collected first-hand, secondary market research involves exploring and interpreting public and commercial records. This could include industry trend reports and competitor sales data. If you’re wondering how to do market research for secondary data, take the following into account:
1. How do different demographics interact with your brand?
When marketing your business, it’s important to target the appropriate demographic. Whether you’re addressing your material to certain age ranges, genders, or economic bands, you should understand which market research groups are most like to engage with your product or service. In terms of accessing demographic data, you should head to local council websites, read industry research reports, and analyse national databases.
2. Get to grips with benchmarking reports
Benchmarking reports highlight the best-in-class examples across your industry, according to various relevant metrics. If you’re hoping to compare your digital performance with that of a rival, you should access online benchmarking reports through Google Analytics. Alternatively, to compare profitability, contact commercial banks to obtain estimates and raw industry figures.
How to conduct market research
It’s one thing knowing why it’s important to include market research within your business strategy, but understanding how to conduct market research is just as important. We’ve outlined how to do market research, so you can take your business to the next level.
1. What do you actually want to know?
Each business decision you make should be oriented around the thought process: ‘what am I trying to achieve?’. Conducting market research is no different. So, before you begin writing your market research questions, consider what it is you actually want to find out. Whether you’re hoping to create customer personas, uncover competitor data, or reveal the latest industry trends, you should pinpoint your concern.
2. Come up with a practical approach to obtaining data
After you’ve established what it is you want to find out, you should decide which types of market research are best placed to give you answers. Carefully weigh up the benefits of primary vs secondary data collection, as well as the attached costs, and commit to your decision.
3. Collect your data
Once you’ve established what you want your data to show and how you plan on collecting it, it’s time to put your plan into action. Whether it’s preparing market research groups or distributing market research questions, you should delegate tasks within your marketing department and set a timeframe for completion.
4. Analyse your data
After you’ve collected your data, it’s time to organise, review, and interpret your findings. It’s unlikely that you’ll be conducting market research without a hypothesis, so highlight whether the data supports or nullifies your thinking. To initiate change within your business, you’ll need tangible evidence, which can be found within the raw data.
5. Report and present
The whole point of conducting market research is to find out how you can take your business to the next level. So, the final step is to ensure your data can be easily digested, across the business and by investors. This means presenting it as an accessible report.
Common mistakes to avoid when conducting market research
Knowing how to conduct market research will help you to highlight industry trends and consumer profiles. However, even experts can be susceptible to making mistakes. To keep you on the right path, we’ve outlined some of the most common cases of oversight found across all manner of market research methods:
Asking the wrong market research questions
Failing to nail down exactly what you want out of your research can lead you to asking the wrong market research questions, which will, in turn, provide flawed results. For instance, pay attention to the wording of your surveys and don’t leave any room for misinterpretation. Market research is used to justify business decisions, so you don’t want to base your development on inaccurate data.
Keeping your research too vague
What is market research if not an opportunity to gather specific insight around your business and industry? With this in mind, always ensure your market research questions are issued with intent, and prioritise clarity at every stage. Conducting market research costs money, so consider whether your research is actually delivering an answer to your question.
Not conducting market research consistently
One of the most devastating mistakes you can make is to perform market research once and think you’ve got all the answers you need. On the contrary, every industry evolves continuously, so it’s pivotal that you keep your finger on the pulse. This doesn’t mean you should invest heavily on each occasion, however; of all the market research methods to choose from, a simple survey could suffice.
Misinterpreting data to support your hypothesis
While it’s important to establish a hypothesis prior to conducting market research, failing to be flexible with your findings can be a dangerous practice. You should be able to analyse and interpret data at face value, even if it goes against your initial thinking. In short, don’t manipulate findings just to satisfy your hypothesis!
Failing to collect data from varied market research groups
One of the main benefits of market research (when performed well), is the presentation of a broad and expansive data set. This should represent a varied consumer base. However, a bad example of market research is that which used small samples, in the name of cost-cutting. It might save you in the short term, but obtaining data from small market research groups doesn’t offer much help and can harm your progress in the long run.
Understanding the purpose of market research and how to execute it efficiently can play a big part in elevating your company. Discover the next steps towards achieving your business goals, and if you haven’t already, register your domain name.
