In any business (regardless of industry) market research stands the test of time as an invaluable tool. The collection and analysis of consumer information can effectively inform and shape the development of products and services — as well as the distribution and continued evolution of those offerings. Leveraging the power of surveys, questionnaires, focus groups and more, companies can glean accurate information about their target market and their unique, respective needs, and create and market solutions accordingly.
Sounds pretty straightforward, right? Well, it is; the value proposition is undeniable. And yet, far too many brands still fail to consistently integrate market research into their business model. Fortunately, we’ve made it easy by breaking down the need-to-know basics of market research.
1. The Formula for Success
Studies show that 20% of small businesses fail in their first year, 30% in their second year, and 50% by year five. What’s more, 70% of small businesses don’t make it to their 10th anniversary. Why is this, you might wonder? Does it speak to a crowded economic landscape? Are consumers simply too picky to appreciate the products and services available to them? Are marketing efforts lacking? In 2019, Forbes cited the following, common pitfalls of small businesses:
– No Vision
– No Niche
– No Business Plan
– No Marketing Plan
– No Action
– No Commitment to Learning
– No Follow-up
– No Consistency
In another article, Forbes went on to explain that 42% of entrepreneurs fail due to no market need. In other words, they put all their eggs in a basket that no one actually wants to buy. The problem is rather obvious, don’t you think? Modern consumers may be selective, but they are far from impossible. In fact, their buying behaviors are rather easy to understand. Consumers want to be heard, they want to feel connected to (and appreciated by) the brands they purchase from, and they want personalized and relevant service/offers. It is precisely this understanding which should inform a brand’s vision, niche, business plan, marketing plan, and so forth. Without that baseline understanding and willingness to cater directly to consumer needs and preferences — along with a commitment to learn and follow-up with your target market — how can a brand expect to succeed? This is where market research comes in.
2. Identifying Research Categories
Now that we’ve determined the ‘why’ of market research, let’s delve into the ‘how’. To begin, it’s important to recognize that there are two categories of research: primary and secondary. Primary research is conducted in-house, and allows companies to build a database of information that is specific to their niche, offering, and target market.
Unsurprisingly, primary research often costs more and takes longer to conduct; however, it also reaps the best reward (critical insights and conclusive results). Secondary research, on the other hand, refers to the utilization of existing data that has already been gathered, organized and published by another company. Although this research lacks the specificity of primary research, it still serves an important purpose and provides brands with a cost-effective means to evaluate available information before moving on to primary research.
3. What Does Primary Research Look Like?
Your customers want to be heard — but are you asking them the right questions? Are you asking them any questions, at all? Effective primary market research requires that brands go directly to their consumers, armed with the right questions and intentions to shape and inform their offering. Methods of engagement, in this case, can take on a variety of forms, including but not limited to:
– Community Groups
– Customer Service Feedback/-Consumer Research Satisfaction Surveys
– Product Trials or Usability Studies
– Consumer Observation
Ultimately, a company should utilize several types of market research methods to effectively assess and understand both their customers and competitors. Which format you use, and when, will likely depend on the stage of business your company is at, your budget, and your intention for seeking out that data. Are you hoping to get a picture of the overall marketplace? Are you considering a large-scale branding shift? Are you hoping to move into a new market? Are you trying to innovate, or anticipate consumer needs?
Once you define the intention(s) of your market research, you can make an informed decision about what format/medium to use, what questions to ask, and how to segment your customer base accordingly.
Ready to learn more about market research? We can help. Connect with us for more information, and stay tuned to our blog for content and resources aimed at setting your business up for long-term, insight-driven success.