Have you ever started an advertising campaign with high hopes to be disappointed with the results? Or how about launching a new product with great enthusiasm just to find out that the market wasn't interested? These situations occur in business life. And this is where market research makes a difference.
If you have big goals, market research can help your company take the right steps and not waste time and money on the wrong ones.
Not only that, but market research can help you win happier customers. For example, 94% of guests choose a restaurant based on online ratings, according to a study. Another study found that 82% of customers expect an immediate answer to a sales or marketing question. If you know these types of facts, you can implement the processes and tools to delight the customer and attract new ones.
In this article, we define what marketing research is in plain text, including the different types of market research. You will quickly and easily learn how to conduct market research, which techniques work best and how to use existing third-party information. The ultimate goal is to succeed.
Market research is the process of gathering information about prospective customers, customers, market size, competitors and more. Companies use this information to develop products and services, set prices, increase lead flow, increase sales, improve customer satisfaction, and develop marketing and advertising campaigns.
If you take nothing else from this market research definition, think of one thing: data is the basis of a company's marketing strategy. Research is the starting point that directs your marketing in the right direction.
Market research prevents you from responding to incorrect assumptions or consistent advice and making costly mistakes. In a world of trial and error, market research does more with less error.
Marketers use two different types of research: primary and secondary research. Whether you know the terms or not, you probably know both.
Let us first consider primary research. Primary research refers to the process of collecting data that has not yet been collected by another party. In other words, primary information is simply information that you discover and collect yourself. When people share their experience with your company or their satisfaction with your product or service, this is the most important information. Primary research includes the following:
Surveys ask people questions that they can quickly answer to reveal their opinions, perceptions, attitudes, and behaviors. Companies are conducting surveys by post, by phone, or increasingly online today. Surveys are one of the most common research methods for a small business.
Personal research involves talking directly to a consumer, potential customer, or existing customer – and includes:
Primary methods like the ones above have many uses, but small businesses find them invaluable in two situations. First, small businesses use it when trying to uncover the true user experience with their product or service. Second, they use primary methods when they need to understand how their customers feel about their company.
Next, let’s look at secondary research. Secondary research uses information that has already been collected by another party. A lot of secondary information is online research and free or inexpensive. Examples are:
What exactly do you use marketing research for? There are hundreds of uses. Only 15 examples are listed below:
After we understand the importance of market research, the steps to conduct the research are straightforward. Here are seven market research steps:
Start with your goals. Write down what market research information you want to collect and how you will use it. Be specific about the challenges in your company. Some example goals are:
Choose the type of marketing information required to achieve your goals. Start with these simple steps:
For more information, visit: 21+ market research tools .
Now it's time to actually do the research. The best way to know what people think is to ask them directly. In this section, we focus on the three main ways to get customer research: interviews, focus groups, and surveys.
Customer interviews can be conducted by phone, in person or using one of the many web-based tools.
Talk to 10 to 15 people to make sure you get feedback that is representative of your target audience. Request 20 to 30 minutes to speak at a mutually convenient time. Be prepared for your questions in good time.
Ask respondents if they give you permission to record the interviews so you can refer to them later. Alternatively, you can take someone with you to take notes.
Remember not to coach people or to get answers that you want to hear. They want their honest feedback. Don't respond to what they're saying. Your job is to collect your thoughts and not correct any assumptions or perceptions that you may disagree with.
A good focus group size is 8 to 10 participants.
Conduct focus groups in person or online with apps that are suitable for this purpose. Many local libraries and community centers have rooms that you can use inexpensively or for free. Trade fairs and conferences also offer the opportunity to conduct interviews and focus groups. You can also use online conference tools to facilitate this group interaction.
Start the group with self-introductions. Let everyone know that all opinions are valid and there are no wrong answers. Then lead them through a discussion that you prepare in advance.
Limit the session to no more than two hours or even 90 minutes. This should be enough time to gain insight while giving everyone the opportunity to express their opinions.
Surveys are great for collecting customer feedback. Nowadays, most customer surveys are conducted online using a professional survey tool. Simply set up a survey and email a link.
Add questions to collect demographic or firmographic information such as zip code, age, title, gender, industry, frequency of purchase, etc. (but skip everything you already know). This helps you to analyze the data specifically.
Then ask your questions.
After gathering the information, take the time to isolate trends and segments. Most survey software today generates beautiful charts and graphs. But you have to study them and maybe do a deeper analysis than the standard charts offer.
You can also interview non-customers. This option is ideal if you need industry data or general consumer input. Many survey software packages also provide access to a survey panel of non-customer respondents. You have to pay for responses from non-customers. Survey prices vary for answers:
When starting exploratory research, follow these best practices:
Before you begin, record the research process so that you are aware of the effort, time, and money. Small businesses tend to underestimate the amount of time and distraction from other priorities.
Also consider whether you have the skills for the research process internally. For example, do you have the ability to develop a survey, attract respondents and analyze the data in depth? What about time A professional researcher may be able to complete the project in a fraction of the time of an unskilled employee. In the end, it can be faster and cost less.
Primary research can take between 1 and 3 months.
Secondary research is faster, but sets a time / hour budget. Keep in mind that it takes some time for someone to find, analyze and collect the secondary data. Set a certain number of hours per week for secondary sources and then stick to this schedule. Don't fall into "rabbit holes" because there are so many sources.
You have completed market research – what now?
Good companies often stumble here. For example, you spend a lot of time on a survey, but then the survey sits. You only look at a few diagrams.
The best data is useless if it is not analyzed properly. Analyze the data, draw conclusions and take evidence-based measures. Your research may identify new opportunities or suggest that you should not take action that you are planning. Think of a list of action items based on the data.
Summarize the results in a report. A report makes data usable internally. You and your team will forget the details a month later, so you need to be able to access something.
Integrate the research information into your marketing plan. Here are two examples.
Example 1: Company A used research to successfully adjust its marketing approach for a product launch. Research on social media showed that consumers responded to certain messages and not others. The company has optimized its marketing messages to better convey the benefits consumers wanted to hear about than the benefits they thought were important.
Example 2: Company B conducted focus groups and found that instead of a single target market for the product, the market actually consisted of a few segments, each with different needs. The customer was able to change their content marketing plan to target each segment with more meaning rather than a unified plan.
Share the market research with your team and look for their ideas. Identify and implement some actionable steps.
Market research could indicate that your processes and procedures need to be revised. For example, you may need to rethink your customer complaint handling method. You may need to fix reputational issues like years of bad reviews. Or, you may have to redesign your products to meet competitor offerings when your current added value is low. Let's look at two examples.
Example A: After a focus group, company Y found that some of the services offered were highly valued, but others were not. The company was able to shift efforts and resources to the services customers wanted most.
Example B: Company Z observed some business customers using their product in their offices and found that customers in certain industries used the product in an unexpected way. Company Z received testimonials specifically mentioning these use cases, and sales in these industries increased.
We hope this guide has helped you understand market research in business. Most small businesses and startups could be more successful if they did simple exploratory research before launching a product or starting a business. Regardless of your budget or staff size, research will make your company more proactive and results-oriented, with decisions based on facts to drive your growth.
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