Business Market Research Strategies
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- Category: Marketing Research, Marketing Strategies
In our last post we covered the importance of identifying your target market. Visit HERE if you didn’t read it yet. You will not regret it. After completing the exercises outlined there, you’ll have to use some market research strategies to confirm your educated assumptions about who your target market is.
Market research involves studying a specific group of consumers -in other words, a market. As we mentioned in the previous blog, market research is one of the most valuable activities a business owner can invest in. The continual research keeps you connected and informed about your customer’s thoughts, motivations, and behaviors. In turn, this deeper connection lets you take advantage of opportunities or trends that may have been missed otherwise. The market research will improve the success rate of everything you do for your business and minimize risk and assumption-based decision making.
You must start with a clear question that you want to be answered when you begin your market research. Without a clear question in mind, you’ll quickly get off track and fail to end up with the information you need. Think about questions like:
- Am I right about my target audience’s perceptions?
- Are there any interests from my target audience in the new product or service?
- Is more information needed about my target audience’s purchase motivations?
- Are there new trends followed by my target audience?
- Have any recent economic developments impacted my target market?
- Is there any room for improvement for my customer service?
- Any changes trends in my target market the past year?
Market research needs to be conducted periodically. No matter how long you have been in business or how well you think you know your marketplace, blind spots can still develop.Trends shift, economic and political climates change– factors beyond your control can impact environments in unexpected ways.
You can approach your market research with two main types – primary and secondary – in three main areas – consumer, competitor, and environment.
Here is a helpful breakdown to use to organize information when you’re conducting your market research. It will help you do research that is comprehensive and cost-effective.
The demographic,behavioral, psychographic, and geographic characteristics of your customers that you will be dealing with or offering your solutions.
Learning from what already exists by investigating the way your competitors market their products, and observing how consumers interact with competitors and their products.
Your business landscape includes the social, economic, political, legal, and accounting trends that may impact your business or your customer’s thoughts and behaviors.
To cover those areas of research, you can rely on primary or secondary research:
1) Secondary research : second-hand data or research that has been completed already and can be applied to your objectives. You can find these in statistics, trade journals, public surveys by larger companies, government publications and studies, newspapers, trade journals, and consumer reports.
2) Primary Research : first-hand information obtained directly from your customers or about your customers through customer surveys, observations about the competition, etc. This research approach can provide information directly from the source. It can be time-consuming and costly – but it is also the most valuable, current, and specific. The approach allows you to discover what works and what doesn’t. You can even just look into adding value to existing offerings – thus giving yourself an edge on the types of products that consumers are interested in.
With primary research, you have the opportunity to study the lead generation strategies that your competition uses and make note of the types of potential customers that you see in their stores.
Let’s look into some strategies for cost-effective secondary market research approach by linking them to the three areas of market research.
Customer Demographic Research
Depending on what part of the world your business is in, you may not have to conduct basic demographic research yourself. Business centers, city halls, and libraries in every city, town, or region will have demographic information available online. Statistical information at the national and regional levels is available online or at government agencies like chambers of commerce or Small Business Administration centers.
Customer, Environment Online and Consumer Research
Keep in mind that primary market research can be costly depending on your industry, so for small businesses, the secondary research in general consumer behavior and purchase data can be extremely useful. Some information on your target market can be available online, usually free, at your local chambers of commerce, business centers and library databases.
What about those cost-effective strategies on the primary market research you shouldn’t look at?
Ground Research (Customer and Competition)
Invest valuable time in your local marketplace at different times of the day. Observe and talk to the people who live, work, or spend time there. What do you notice about the neighborhood? What are the neighborhood problems and how well are they taken care of? Get a better understanding of their age, gender, clothing, and any other demographics.
Competing Enterprises (Competition)
Allocate some time to study direct competitors in the same local area and make observations about their business. There is nothing wrong with learning from the competition. Note what works well and what flaws or problems they have. How do they advertise? What target market are they going after? Is there a niche market that is not being served for you to tap into?
Customer Loyalty and Purchase Data (Customer)
Depending on the features your point of sale system offers, you may be able to request reports on customer buying patterns and trends. Any customer loyalty program will allow you to keep track of buying information with each customer’s account. The type of information to look for here is behavioral data, including (but not limited to) brand loyalty, purchase frequency, product usage, and availability.
Focus Groups (Customer)
They may sound old school but can provide you with great information on consumers’ behavior. You assemble groups of six to twelve people and ask them questions (general and specific) about their opinions, thoughts, and habits as related to your market research question. Be sure to assemble a cross-section of people that are representative of the target market.
Surveys (Customer and Competition)
Surveys are the most popular way to gather first-hand information from your existing and potential customers.Administer them carefully and thoughtfully. Surveys can get complex with a high number of variables.
- To encourage a higher response rate, keep your questionnaire short. Focus on the information you need to answer your market research question.
- Remember, the reliability of your information will only be as good as the people you ask for it. You may not want to limit this research to your existing customers depending on your market research question.
- Choose a survey format – telephone, web, or paper-based – but make sure you understand the pros and cons of each. Research some survey methods, and allocate more time than you think you need for creating your survey.
- Consider including basic demographic questions on your survey so you can cross-reference responses with elements like age, profession, income, and gender.
Website Analysis (Customer)
Before you even think about your website, understand the 5 Proven Steps to Differentiate Your Business in Your Marketplace. Use a website tracking system like Google Analytics to monitor how visitors to your website behave. These supporting tools will allow you to see where visitors are from, how many people visit your site, what pages they are looking at, and how long they spend on your site (referred to as the bounce rate). The 5 Steps to TurnProspects into Long Term Paying Customers will help you speak your customer’s language whether offline or online.
Analyze what you’ve learned when you’ve completed your market research. Weigh the outcome while you are looking back to your original question.
Elaborating on this part will allow you to understand how the market research has supported the question(s). You get confirmation or refutation on your original assumptions about questions such as :
- Does your target market exist in your targeted geographic area?
- Does the target market need or want what you’re selling?
- Through what channels will the target market want to buy your products or services? How will targeted people want you to communicate with them?
- Is the target market showing interest in your new product or service?
- How large is the target market in your local area? Can it support your business growth?
From this preliminary research, you may look into different areas of your research to dig into more information. Be ready to face some hard facts if any are discovered. Being truthful with yourself will let you avoid starting something not needed or desired in the targeted area. To support your business, perhaps there is not a large enough market base in your area. You don’t want to be dealing with the wrong type of customers after investing thousands of dollars. It is okay to change your mind with valuable information available to you now. You can make better decisions about your target market, marketing strategies, and product or service offerings.
You may be able to find ways to improve your offerings and expand your target market by including more people or a larger share of the marketplace if your product or service is flexible enough.
It is important to understand that your market research is ongoing– especially in these difficult times, with COVID-19 causing so much uncertainty. Every time you talk to a customer, supplier, or sales rep, you’re gathering information about your clientele and conducting market research. Even innovating your business depends on how much you listen to your target market. You have to get your staff involved by allowing them to keep a log at the point of sale to record customer comments and complaints. Online tools like reviews are bringing tremendous value in studying and observing your clientele, so don’t take them for granted. Build in a review strategy. If you are a retailer or wholesaler of any items online or offline, review the logs for customer’s returns and the reasons to get valuable feedback on your offerings.
Remember, life involves change, and your audiences, trends, products, and services also change. So always look ahead of the curve to keep on top of your marketplace.
Make and plan market research as a regular part of running your business. Allocate time and money for primary research at least once a year. When it comes to trends and all environmental changes beyond your control, planning ongoing research is the invariable way to stay ahead of the competition. Our next blog will help you apply the information about your target market to build or refine your marketing strategies and not the tactics. Now that you understand who your target market is, as well as consumers’ thoughts and behaviors, you can determine what to say and how to reach your market. Communicating with your audience – strengthening the message sent out – is the backbone of your marketing materials.
Devoted to your business growth,
When you don’t know where you are going, look where you came from.