Why small businesses should do market research
Updated: Oct 16, 2021
Essential tips to get your business started with market research
We can’t deny how the pandemic has had a huge impact on our behaviours, attitudes and the brands we use and buy on a daily basis both at work and at home. This is where market research comes in and is an important part of the marketing planning process.
Now is a good time to make sure you're up to speed on what the market wants and your customers need. Putting quality time into researching your market is a very useful exercise and ideally something you should do on an annual basis.
The best thing about this is that it doesn’t have to cost the earth, with your own time being the main source of investment. A good rule to stick to is never to make assumptions about your target customers, however, experienced you might be. You’ll likely learn new things about them and also discover new segments you can target.
Why is market research important?
Market research can help your business in so many ways and areas. By using a series of research methods, you can identify trends to better inform your strategic planning and underpin your long-term success. It will also ensure you're not working blind with no hidden surprises.
SME business specialist Richard Alvin, and chairman of specialist SME research company confirms:
"The worst mistake you can make as an entrepreneur is shooting in the dark – you simply waste your time and resources without anything to show for it. You may make mistakes along the way even if you have sufficient information, but it is better to be prepared."
Instead, you'll be well informed, as you know what your customers think, where the market is heading and how you perform against the major players, helping to give you that competitive edge.
You can use market research to find out exactly who your ideal customer is and everything about them to help create customer personas. You should be looking to learn what their motivations are, their beliefs and values as well as their barriers to purchase and the challenges they face. This is relevant to all types of businesses regardless of the sector you operate in and the size of your business. Understanding more about your customers can give you a huge growth advantage, helping you to provide the perfect product and services which addresses their needs and making you stay one step ahead.
Having up to date customer and market insights is crucial to a business. These can be used across all areas of your business from product development and business development, to customer service and operations.
We always advocate market research at Sharp Thinking and insist this is one of the first steps of working with a client to develop a marketing strategy.
How do conduct market research?
There are many different methods you can use to conduct your own research. You don't have to spend any money or use a market research agency to gain quick and valuable insights directly from your customers. All of these methods are in your hands, can be quick and simple to organise and yield huge results.
1. Speak to your customers
A great way to start is by talking to your customers and some potential ones. Commonly referred to in marketing as qualitative research, you’ll be able to build up a picture of what’s important and challenging for them, and identify trends and areas of commonality. Doing this first before anything else can set you up for larger, broader quantitative research which we come on to next.
Identify your key loyal clients as well as those who are yet to purchase. Approach them to have a conversation to gather their feedback. You may wish to offer them an incentive to do this. This can be done quite casually as another facet of customer service as you 'check in' on customers to see how they are. It's a good idea to speak to them too in the comfort of their own environment.
Understanding their view on your service levels, product range and price points is extremely insightful. In addition, finding out ways you could improve, what they love and equally what they hate is crucial. Read more on why customer experience must be a priority.
You can use them to explore marketing communications preferences too. Market research is so helpful in marketing planning including asking how and when your customers want you to communicate and what information you can provide that they will find helpful.
Nick Francis, CEO of Help Scout adds:
"Leverage a mix of qualitative and quantitative feedback to make service and product decisions. We do user research, surveys and a lot of calls with current/potential customers, which balances out the feedback we get in the support inbox. Every time I travel, I put together a dinner with customers and just listen for a couple hours.”
2. Qualify with a survey
Once you feel you’ve got a grasp of the main trends and feedback from those customers and contacts close to you, it’s a good idea to test them and ‘quantify’ them with the wider market. That’s where quantitative research comes in, putting hard numbers to the verbal responses you’ve collected to see if they are more widespread with the whole market.
There are several ways you can do this. If you have a good contact database you can create your own survey online, using a tool like Survey Monkey that makes creating and sending surveys super easy. They have a free version that allows you to gather limited results per survey and paid-for versions for larger reach and greater functionality. This has the benefit of looking professional and collates all the information for you to make analysis much easier.
Another way would be to team up with a relevant online media owner in your market and partner with them to run a survey through their network to reach a broader audience. You'll need a budget for this but the information you collect will be vital and can cost as little as £1,000. As a rule of thumb, you need a minimum sample size of 100 for your data to be statistically robust.
Always know what you’re looking for when writing a survey. By this, we mean having a good idea of what specific questions, themes and subjects you need answers to. Just writing a standard survey that doesn’t address the heart of what you’re trying to test can make the whole process worthless and not tell you anything. Before you go into the survey design, first jot down what you want to know, where are your knowledge gaps, or perhaps you want to stress-test what you already know. Start to list your questions making sure you consider the types of questions you’re using. You should think about whether they are open or closed or multiple-choice questions. The questions and wording must be neutral, non-ambiguous and specific; they should not lead the participant. Order your questions in a logical natural flow.
Structure your questions into 3 categories. Demographics, attitudes and behaviours. Put demographic questions at the start of the survey so you know who is giving the answers. This means you can slice and dice the data to draw useful conclusions from the results. Attitudes relate to how people think and feel and should cover areas like product ease of use and customer service. Behavioural can measure awareness, frequency of purchase, satisfaction and preferences of product or service type.
3. Examine your customer reviews
You probably have a wealth of data sitting around in your business that you’re not currently using that you could learn a lot from. For starters pull out all the customer reviews you have. You may find these on Google reviews or Trustpilot.
Group these results into positive and negative and pick out all the themes that come up in the written reviews. These might be under umbrella topics such as Quality, Product, Service. You can start to tally how many times certain elements are mentioned to gain insight into what it most important to your customers. If amazing/poor service is the common theme that comes up that may be where you have a strength/weakness. Whatever it is that drives reviews is something important to the customer and should be operationalised into/out of your business. Summarise your strengths, weaknesses and extract out your opportunities within this. You could use this as part of a SWOT Analysis.
4. Take time to check your competitor’s reviews
Another useful task is to understand where you sit in relation to your competitors. You can glean a wealth of information from this from reading and analysing competitor reviews. Follow the steps you went through to analyse your own business reviews. Use the themes to understand how you shape up compared to your rivals and outline your conclusions.
5. Look at your competitor’s websites
Pick out competitors you admire and start to analyse their business. How do they position themselves? What are their key messages? Read more in our blog what is a competitor audit. Make an action plan for utilising the insight you have obtained through this process.
6. Search on Google for secondary research and market intelligence
Tap into secondary research already available using Google. Many industries are of great interest on a national and worldwide scale. Often you can obtain Government reports and industry reports for free. These can offer information on key players, market size and trends. Many business publications, for example, The Financial Times or the Economist also offer free online content. Lastly set up Google alerts for key terms which are of interest in relation to your business.
Invaluable insight that will make a difference
Maybe you have time to do all of these things, maybe you just have time for one. Whatever the time and budget you have, trying even just one of these approaches will give you invaluable insight to give you an advantage in making your business a success.
Feel free to visit our blog at the sharp end for more marketing tips. For a 30-minute free consultation to discuss giving your business a boost, please get in contact with us.
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