If you had the opportunity to improve traffic, increase relevance, and just overall grow your small business, would you take it? Of course, you would! Small business owners like you work hard to make sure your business has everything it needs to succeed.
Key Takeaways You Will Get From This Article
1. Market research is the collection and analysis of information about consumers, competitors, and the effectiveness of marketing programs.
2. Market research will help improve the profitability and relevance of your business.
The fact is, you DO have that opportunity – right now! You can use market research to set your business up to attract more customers and be more competitive with your neighbors. In this post, we’ll explore what market research is, why it is important, and how to complete it for your business.
Table of Contents
What is Market Research?
Market research is the collection and analysis of information about consumers, competitors, and the effectiveness of marketing programs. One of the great (and a little overwhelming) parts of market research is that there’s no right or wrong information to collect. It all depends on what you are hoping to achieve.
For example, you can use market research to determine if a new business idea or opportunity will be profitable. Or, use it to identify your true target customers and pinpoint what they are looking for. You can also use market research to keep an eye on what your competition is doing, and to monitor industry trends. These results will all help you build strategies and can answer that underlying question – will this be worth it?
There are two main types of market research, primary and secondary research. Each of these serves as an umbrella for even more kinds of research. Here’s the full breakdown, according to HubSpot:
- Primary Research – the pursuit of firsthand information about your market and its customers.
- Exploratory Research – involves surveying small numbers of people to identify any potential problems that your team should take time to combat.
- Specific Research – requires you to take a precise segment of your audience and ask questions to help solve the problem you identified.
- Secondary Research – the information and data available to help you draw conclusions.
- Public Sources – the most accessible information for your research (i.e. government statistics).
- Commercial Sources – this is information that typically costs money to obtain (i.e. market reports or insight compiled by an agency).
- Internal Sources – the data you already have, based on what you have gathered from customers (i.e. average sale amounts, retention rates, customer feedback, etc.).
Now that you know what market research is, let’s look at why it is important for your business.
Why is Market Research Important?
The simple answer to this question is; because it will help improve the profitability and relevance of your business. Specifically, market research can:
- Show you which products and services are the most important to market to your customers.
- Prioritize the types of marketing and operations that are critical to finding and keeping customers.
- Guide you to the most reliable and compelling advertising or promotional content.
- Identify the messaging that will effectively build your company brand and image.
- Re-focus your entire team on your company’s mission.
As we explored in our last blog post, Five Ways to Improve Your Small Business in 2020, there is always room for improvement. Especially when business as usual is going well, it’s a good idea to explore the ways you can make it even better.
Check out these examples, shared by The Balance SMB, of large, successful companies using market research to take their business to the next level:
After several quarters of declining sales, McDonald's executives decided in 2015 that major changes were required to combat the public perception of McDonald's products as being unhealthy. Based on market research, the company made menu changes and no longer sells chicken products containing human antibiotics or other ingredients, such as phosphates and maltodextrin. Other changes include the addition of more salad choices and healthier desserts including apple slices.
For years Lego was an enormously successful product with young boys but was popular with only 10% of female children. In response, Lego conducted a huge four-year market research campaign with over 3500 young girls, resulting in a new product line featuring vibrant colors and different figurines. The new products became a huge success and the share of female Lego users increased sharply.
If these companies can do it, you can too!
Can I Do My Own Market Research?
Yes! You can absolutely complete your own market research for your business. However, if you have a bit of budget to spend and need help, you can always hire a marketing agency. The big question now is, how do you get started? Well, if you’ve decided to hire and agency, they will take it from here. If you’re going at it alone, we can help you hit the ground running.
CLICK HERE for an in-depth guide on how to do market research, provided by leading inbound marketing platform, HubSpot.
We wish you all the best as you work to improve and grow your small business. Visit our blog again soon for more tips and resources!