Why market research is important for your small business

“It’s the business that best understands their customer that wins.” - Unknown

How do we really understand our customer? By doing our market research!

That not only allows us to understand our market, but our clients and ultimately what service or product we offer is able to best serve our clients and build our business for success.

When I say market research, do you feel like that is just a lot of work, research and data?

At its core market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market.

Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

And without research, it’s impossible to understand our clients.

Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty. Not only does market research help us understand our client better, it helps us build our business better. Setting us up for success with intentional strategies.

There are two main ways to gain insights about your business: looking outward and looking inward.

Looking outward means understanding who your customers are; looking inward means understanding who you are and what your brand represents. Both types of insights are especially important for your business when you’re just starting out, so we’ll explore how to approach each.

Research is power. By better understanding our customer, we are able to better position our business to align with their wants, needs, goals and thus give them a solution to their problems.

When we don’t understand this, the clients will go to our competitors.

Understanding the wants, needs and problems of our clients, as well as what our competitors offer, we are better able to align our services, products and offers with our clients.

And how do we know what people really want?

We do the research. I am going to share some key tactics on how exactly you can do that (for free).

Market research also provides insight into a wide variety of things that impact your bottom line including:

  • Where your target audience and current customers conduct their product or service research

  • Which of your competitors your target audience looks to for information, options, or purchases and comparison

  • What's trending in your industry and in the eyes of your buyer

  • Who makes up your market and what their challenges are, and also what their complaints and expectations are

  • What and who influences purchases and conversions among your target audience (think community groups, influencers, leaders in specific social circles)

Now that we've covered these overarching market research importance, let's get more specific and look at the various types of market research you might choose to conduct.

#1: Interviews

Interviews, which has always been the typical way to conduct research, allow for face-to-face discussions (in-person and virtual) so you can allow for a natural flow or conversation and watch your interviewee's body language while doing so.

But you can also do this via online forms and surveys where the data can be grouped immediately for you to look at and take action.

#2: Focus Groups

Focus groups provide you with a handful of carefully selected people that you can have test out your product, watch a demo, provide feedback, and/or answer specific questions.

A great virtual way for this is also in specific industry groups on platforms such as Facebook. People share their frustrations and challenges and what their needs are, if you are prepared to listen and engage with them, then you can also subtly share your expertise and build a trust with them.

#3: Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service, and specific features of that item. This type of market research also gives you an idea of the product or service's usability for your target audience.

Again this can be in the form of a post purchase questionnaire that can be filled in virtually, and end off the questionnaire with feedback that you can potentially also use as testimonials and reviews. Building social proof and learning where to be better.

This will also fall into customer satisfaction and loyalty research, so you know if you are building brand advocacy and referrals from your current clients.

#4: Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX, what roadblocks they hit, and which aspects of it could be easier for them to use and apply.

This also applies to the Facebook groups I mentioned earlier, it can also come from being on the platforms where they review and complain (hopefully about your competitors) so you can see where opportunities and gaps are.

#5: Buyer Persona Research or Ideal Client Avatar

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, what they need from your business and brand, and more. This is vital if you want to build the persona of who are you selling to.

(And if you want to get started on this, we have a free workbook with a video explaining this in more detail)

#6: Pricing Research

Pricing research gives you an idea of what similar products or services in your market sell for, what your target audience expects to pay — and is willing to pay — for whatever it is you sell, and what's a fair price for you to list your product or service at. All of this information will help you define your pricing strategy, and helps you map out your MVP (minimal viable product). Because the strategy you need to implement in your business plan is to stop leveraging your time for money and figure out at what minimal point can you sell something and make profit so your business can generate cash flow faster.

#7: Competitive Analysis

Competitive analyses are valuable because they give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry, what your target audience is already going for in terms of products like yours, which of your competitors should you work to keep up with and surpass, and how you can clearly separate yourself from the competition.

#8: Brand Awareness Research

Brand awareness research tells you about what your target audience knows about and recognizes from your brand. It tells you about the associations your audience members make when they think about your business and what they believe you're all about.

#9: Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. It requires experimentation and then a deep dive into what reached and resonated with your audience so you can keep those elements in mind for your future campaigns and hone in on the aspects of what you do that matters most to those people.

Have you done any to extensive market research before you started your business?

Or did you do a bit of research here and there and thought, if I create it it will come?

Do you think market research needs to be costly and time consuming?

Now that I shared the ways in which you need to do research, let me share HOW to do that research, for free or very cost effective and with minimal time input but maximum data output.

Firstly, you want to look at is where people are already spending their money, a good example is Amazon.

Search the book section on Amazon, what topics are best sellers and have a lot of reviews, this shows you what people are interested in reading about or learning more about and can give you insight into their behaviors and needs.

The next big resource you have available is Google. There is Google Analytics which is mostly free and can give you data on your website traffic, but there is also Google Trends which share data about trends and specific keywords, there is Google Keyword Planner, Google Alerts which you can set to send you updates when specific keywords are searched or appear, and there is Google Think. All resources where you can learn more about your clients, their needs and their behaviors.

Another way to garner more info is from Facebook, I have already mentioned Facebook groups that you can join, or even create and ask in there for feedback. As nothing takes away from real conversations you have from your community.

Engage with them and get their feedback and opinions.

You can also sign up for Facebook IQ where trends and industry insights are shared. There is also Facebook Ads (which is not free), but the data and insights you get from running ads and especially split campaign or A/B testing campaigns can be very valuable for your specific brand and products.

Some general apps and platforms to consider:

Answer the Public: this is a site where if you put in a selection of keywords, it will come up with the most searched terms related to that keyword, giving you insight into what people are searching.

Uber Suggest: a deep keyword research and content research platform where you can learn more about trending and topical keywords and information

PEW Research Centre: is a massive database of information and trends and analysis from public opinion, articles, and more.

Statista: is the go to statistics platform to gain specific industry knowledge and topics.

Make My Persona: this is a free tool on HubSpot where you can create your ideal client avatar or persona to help you be more intentional with who you are selling to.

Tableau Public: this is a platform that has access to a lot of various information, data and you can create graphs and visuals to help summarise and understand the information available.

All these platforms can help you perform market research so you can truly deliver the right product, at the right time and price to your right clients.

As Bernadette Jiwa says, “Whoever gets closer to the customer wins.”

When you know all you can, you can get closest to your clients and solve their needs, making the sale smoothness.

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