When and How to Conduct Market Research

Target Market Research gives valuable insights into your customer. In this article we discuss:

• Why we should do this research?
• How often we should do it
• How to do it
  

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As a business owner, I can attest that marketing is one of the hardest parts about owning your own business. I’m always questioning myself, “What strategies do I use to reach more people?”

Coming from a marketing background, I know one of the most effective ways to develop new strategies is market research. 

Market research is defined as the gathering of information, including qualitative and quantitative data to determine how viable and successful your product or service would be, and/or is. This information allows us to discover our target market, collect and document opinions, and make informed decisions regarding our company. It involves the detailed evaluation of our customers, competitors, and current economic trends.

The type of research I want to talk about today is “Target Market Research”. This means gathering information about your business's target audience, and existing customers to determine how viable and successful your product or service would be, and/or is, among these people and how best to communicate with them. 

Why Should We Do Target Market Research?

You may be the owner, but do you know whose opinion matters the most in your business? 

Your customers! They are the ones who are buying your product or service, right? 

So when it comes to getting their opinion, we don’t want to play the guessing game. We want to know what they think about our product, our business, and us. This will allow us to shape our business and product to better cater to them.

Doesn’t every business owner wants to:

1. Increase the number of customers 
2. Increase their revenue
   

Market research is the direction to go if we want to achieve any of these things. To map it out, once we gather our information from market research, we can use it to tailor our messaging and marketing to our customers’ tastes and meet them where they’re at. Once we catch their attention, we position ourselves favorably in their eyes, then we can increase brand awareness to push customers to make an informed buying decision that leads them towards us.

If you’re not convinced that target market research is important to your business, check out this fact:

An average company loses 50% of its customers every 5 years. Let’s also consider that the cost of replacing them can typically be 6-7 times more expensive!  

So, we want to not only attract customers but keep them happy and engaged with our products and services. To do this, we must gauge changing interests, values, and expectations. 

How often should we perform target market research

How often we perform market research entirely depends on our business and what stage we’re at. It’s always a great idea to do this type of research before the launch of a new product or service to check the waters. The last thing we’d want is to launch this great idea and invest a lot of money into it just to find that the market is not interested.

The best way to decide how often to do it is to think of the long-term plan for your business.

We can use these questions to guide your decision

• Are our clients’ needs constant year to year or are there other factors that they need to react to (the economy, regulations, job market, global conditions, etc.))? Is there any cycle to those factors?
• Are our competitors constantly shifting their approach to pricing, adding new features/functionality, positioning?
• How often do we like to provide new information about our market to our sales team?
• How likely are lost customers to respond to you more than a few months after they have made a ‘no go’ decision?

(via: The Insight Advantage)

These are great questions to ask ourselves to really gauge the market and guide us towards making well-thought-out decisions.

4 Steps to Conduct Market Research

So - are you ready to start your market research? Let’s get started! Here are four steps to successfully conduct market research:

1. Define our objective—First, we need to determine the goal of the research. As I described above, the goal was to understand our target so we can improve our interactions with them. We want to gain more information about them, such as demographics or psychographics, to better determine if they will be/are interested in our product or service.
   

2. Determine approach—Are we doing the research ourselves, or will we hire a research company to do it for us? Once we determine that, then we should start to build out the plan for how we will conduct the research. There are a plethora of ways to conduct research including interviews/focus groups, competitive analysis, and brand awareness research. We can do multiple for our research, but ultimately we want to choose whichever will give us the most comprehensive information about our target customers. Once we determine that, we can plan when we’ll conduct the research, how many people will we research, how we will gather participants and what questions we will ask, etc.
   

3. Take a peek at our competition – We should research other businesses and look into the competition’s offerings, location, targeted customers, and disadvantages in the market. This will give us a better idea of our business’s positioning in the market and understand what we’re up against when it comes to getting the customer’s attention. With this information, we’ll determine ways to break through the noise to reach the customer.
   

4. Take action! - Once we have our data and analyze it, then we can create a plan and make changes to our business that will allow us to better reach and retain our customers. 

This is a great way to get started with market research but truthfully there’s so much more that goes into it. I actually recently had a market analysis done for my company through one of my clients. If you’re interested in knowing more about the process of hiring an outside company and how we use the results in our business, reach out to us! We’d be happy to talk more!  Or we can talk more about options for your business in a complimentary coaching session!