[ad_1]
Have you ever kicked off an advertising campaign with high hopes, only to be disappointed by the results? Or what about introducing a new product with great fanfare, just to discover the market wasn’t interested? These situations happen in business. And this is where doing marketing research makes a difference.
If you have big goals, market research can help your business make the right moves and avoid wasting time and money on the wrong ones.
Not only that, but marketing research can help you get happier customers. For example, 94% of diners choose a restaurant based on online reviews, one study suggests. Another study found that 82% of customers expect an immediate response on sales or marketing questions. Knowing these kinds of facts can help you put into place the processes and tools to delight the customer and attract new ones.
In this article we define what is marketing research in plain language, including the different types of market research. You will learn fast and easy techniques for how to do marketing research, which techniques work best, and how to take advantage of third-party information that already exists. The end goal is to find success.
What is Market Research?
Market research is the process of collecting information about target prospects, clients, market size, competitors and more. Businesses use this information to develop products and services, set prices, increase lead flow, boost sales, improve customer satisfaction, and develop marketing and advertising campaigns.
If you take nothing else away from this market research definition, remember one thing: data is the foundation of a company’s marketing strategy. Research is the starting point that guides your marketing in the right direction.
Marketing research prevents you from acting on incorrect assumptions or one-size-fits-all advice, and making costly mistakes. In a world of trial and error, market research achieves more trial with less error.
The Evolution of Marketing Research in the Digital Age
Integrating Digital Data Sources: In today’s digital-driven market, traditional marketing research methods are being complemented with new data sources. Online behavior tracking, social media analytics, and digital footprint analysis provide a wealth of information about consumer preferences and trends.
Understanding how to integrate these digital data sources into traditional research frameworks can offer a more holistic view of the market landscape.
Leveraging Big Data and AI: The advent of big data and artificial intelligence (AI) has transformed marketing research. AI algorithms can process large datasets to uncover patterns and insights that might be invisible to human researchers. Businesses can leverage these tools to predict consumer behavior, personalize marketing strategies, and enhance decision-making processes.
Types of Market Research
Marketers leverage two different types of research: primary and secondary research. Whether you know the terms or not, you probably are familiar with both.
First, let’s look at primary research. Primary research refers to the process of gathering data that hasn’t been collected yet by another party. In other words, primary information is simply information you uncover and collect yourself.
When people tell you their experience with your business or their level of satisfaction with your product or service — that’s primary information. Primary research includes the following:
Surveys
Surveys involve asking people questions that they can quickly answer to reveal their opinions, perceptions, attitudes and behaviors. Companies conduct surveys by mail, on the phone or increasingly today, online. Surveys are one of the most common research methods for a small business.
In Person Research
In-person research involves talking directly with a consumer, potential customers or existing customers — and includes:
- Interviews – These are one-on-one interactions to dive deeply into reasons driving the interviewee’s beliefs. Interviews are relatively inexpensive and can involve simply phoning a customer.
- Focus groups – A focus group gathers together between 5 to 10 people in a group setting to give feedback. Focus groups are expensive and really require an experienced facilitator to get unbiased information.
- Ethnography – Ethnography simply means interactions with others in their natural environment. A common method is “fly on the wall” where a researcher quietly observes someone in a store or using a product. A digital method involves heat maps to test where a visitor’s attention lingers on a web page.
Other Marketing Research
- Diaries – People track their behavior for observation about how they interact with your products or services.
- User testing – Users test and give feedback about how they experience your product or service in real-time. We’ve all seen examples of this on TV commercials: the blind taste testing.
Primary methods like the above have many uses, but small businesses find them invaluable in two situations. First, small businesses use them when trying to uncover the true user experience with their product or service. Second, they use primary methods when they need to understand how their clientele feels about their company.
Next let’s look at secondary research. Secondary research involves using information that has already been collected by another party. Much secondary information is online research and is free or low cost. Examples include:
Government Research
- U.S. Census data (a good place to start is Census Data Gems).
- Information from government agencies like the Bureau of Labor Statistics, FEMA or the SBA.
Third Party Research
- Research reports (not your own), or information gathered by other companies. Example: a research chart from eMarketer.
- Secondary data from trade associations such as the National Retail Federation. It publishes industry statistics and studies.
- Information provided by specialized digital tools. An example is Google Trends data, showing public search trends.
Combining Qualitative and Quantitative Research
Balancing Depth and Breadth: Effective marketing research often involves a combination of qualitative and quantitative methods. Qualitative research, such as interviews and focus groups, provides depth and context to understand the ‘why’ behind consumer behaviors.
Quantitative research, like surveys and statistical analysis, offers breadth and generalizability to measure trends and patterns across larger populations.
Hybrid Research Models: Embrace hybrid models that blend qualitative and quantitative approaches for a more comprehensive analysis.
For example, a study might begin with qualitative interviews to explore consumer attitudes, followed by a large-scale quantitative survey to validate and quantify these attitudes across a broader audience.
Market Research Examples
Exactly what do you use marketing research for? There are hundreds of uses. Below are just 15 examples:
- Identify revenue opportunities – Research may reveal customer segments you never considered, or the opportunity to cross sell or up-sell. You can also identify new verticals ripe for expansion.
- Set pricing – Research can reveal whether your prices are high or low compared to the market. Research may show that price increases are justifiable.
- Capitalize on competitor weaknesses – Learn what the market hates about your competition, so you can compare your brand and persuade prospects.
- Identify competitor strengths – Learn what the market likes better about your competitors, so you can meet or beat them.
- Spot trends – Trends may suggest new technologies to adopt.
- improve reputation – Your business may discover a reputation problem from bad online reviews that your team needs to overcome.
- Compose winning marketing messages – Research may reveal which advertising messages appeal to your target market.
- Identify a new offering – Changing habits, tastes and needs may trigger ideas for products or services.
- Delight customers – Customer expectations may be different from what you assume, and research reveals what matters most.
- Demonstrate industry authority – Find out what content your target buyer values and how they want it delivered to them.
- Test concepts – Poll the public as to whether a brand name appeals to them, and test concepts before launch.
- Determine key influencers – Ascertain who holds sway over buyer decisions, so you can connect and leverage influence.
- Elevate digital presence – Assess your visibility in search engines and on social media. Identify opportunities to gain a bigger footprint.
- Identify product features – Research helps guide your development efforts by suggesting the qualitative value proposition at every stage of the product life cycle.
- Improve your website – Collect data about what draws prospects to your website. Identify elements they love, and discover what makes them convert.
How to Do Market Research
Now that we understand the market research meaning, the steps to conduct research are straight forward. Here are seven market research steps to follow:
1. Identify Your Goals
Start with your goals. Write down what market research information you want to gather and how you will use it. Be specific about the challenges in your business. A few sample goals include the following:
- Compare competitor prices to see if your business has room to raise prices.
- Increase word of mouth referrals by improving customer service levels.
- Identify your ideal potential customers so you can tailor products and services to meet their needs. Include age, gender, location, income and specific problems your customer wants solved. Create customer personas to guide your sales outreach.
- Isolate the messaging that resonates best for an ad campaign.
- Size the market before developing a new product or starting a new business.
2. Choose a Type of Research
Choose the type of marketing information needed to meet your goals. Start with these simple steps:
- Primary or secondary? Decide which type will give you the information needed for your goal(s).
- If primary, determine the format. For instance, you could invite current clients to participate in interviews. Ask your social media followers to participate in an online survey. Or try a service like Google Surveys to get responses from consumers and the general public.
- If secondary, determine what sources to investigate. Always check first to see if government research has what you need. Google searches will point you to other secondary information, including industry organizations.
For more, see these 21 market research tools.
3. Conduct the Research
Now it’s time to actually do the research. The best way to know what people are thinking is to ask them directly. In this section we will focus on the main three ways to get customer research: interviews, focus groups and surveys.
Interviewing Customers
Interviewing customers can be done over the phone, in-person or using one of many web-based tools.
Speak to 10 to 15 individuals to make sure that you are getting feedback representative of your target audience. Request 20 to 30 minutes to talk at a mutually convenient time. Be prepared ahead of time with your questions.
Ask respondents if they give you permission to record the interviews so you can refer back later. Alternatively, have someone with you to take notes.
Remember not to coach people or guide them to answers that you want to hear. You want their honest feedback. Do not react to what they say. Your job is to get their thoughts, not correct any assumptions or perceptions you may disagree with.
Holding Focus Groups
A good focus group size is 8 to 10 participants.
Conduct focus groups in-person or online using apps that lend themselves to the purpose. Many local libraries and community centers have rooms that you can use at little or no cost. Trade shows and conferences also offer an opportunity to conduct interviews and focus groups. You can also use online conferencing tools to facilitate this group interaction.
Start off the group with self introductions. Let everyone know that all opinions are valid and there are no incorrect answers. Then guide them through a discussion that you prepare ahead of time.
Limit the session to no more than two hours, or even 90 minutes. This should be plenty of time to get insights, while giving everyone a chance to voice opinions.
Conducting Surveys
Surveys are terrific for gathering customer feedback. Today most customer surveys are done online using a professional survey tool. Simply set up a survey and email a link.
Include questions to gather demographic or firmographic data such as zip code, age, title, gender, industry, purchase frequency, etc. (but skip anything you already know). This helps you analyze the data with specificity.
Then ask your substantive questions.
After collecting the information, take the time to isolate trends and segments. Most survey software today generates beautiful charts and graphs. But you will need to study them and perhaps do deeper analysis than the standard charts provide.
You can also survey non-customers. This option is great if you need industry data or general consumer input. Many survey software packages also provide access to a survey panel of non-customer respondents. You will have to pay for non-customer responses. Survey pricing varies for responses:
- Consumer samples are usually relatively inexpensive, perhaps $1 per response, although the cost will increase the more specific your needs are. Asking consumers over the age of 25 will be one price, for example, while asking men between the ages of 35-44 who have children, will be another price.
- For comparison: Google Surveys start at 10 cents per response for just one question, but that number can go up to $10 per each completed survey if you want 2 to 10 questions. If you want respondents screened for specific audience characteristics it costs more.
- Business-to-business responses are more expensive than consumer responses. It might cost as much as $100 per completed survey from a senior executive.
- If budget is a challenge, see if you can barter with another organization that has a large membership. You can increase the power behind this ‘ask’ if you partner with other businesses such as your vendors to see if they will join you in making this request.
Best Practices
As you begin exploratory research, follow these best practices:
- Pre-test. Do a dry run of a customer interview with someone on your team in role play. For a survey, ask a few colleagues take it as a test. This goes a long way to ensure questions are understandable and that information will be useful.
- Respect respondents’ time. Keep interactions short. For instance, it’s better to do a branched survey where respondents only see relevant questions based on prior responses, rather than forcing them to wade through a dozen irrelevant questions. People lose interest fast when they feel you take too much of their time.
- Use plain language. Use vocabulary respondents recognize. At the same time, tailor your questions to get specific answers. See these 75 market research questions to ask.
- Step into the customer’s shoes. Ask questions that make sense from your customer’s point of view. For instance, instead of asking a technical question about your software configuration process, ask the customer how long it took between opening an account and beginning to use your software.
Time and Skill
Before you begin, map out the research process so you’re clear on the effort, time and money needed. Small businesses tend to greatly underestimate the amount of time required and how much it will distract from other priorities.
Consider also whether you have the skills internally for the research process. For example, do you have the skill to develop a survey, get respondents, and analyze the data in-depth? What about time? A professional researcher may be able to complete the project in a fraction of the time of an unskilled staff member. In the end that may be faster and cost less.
Primary research can take anywhere from 1 to 3 months to complete.
Secondary research goes faster, but do set a time / hours budget. Remember, it takes time for someone to locate the secondary data, analyze it and compile insights. Establish a certain number of hours per week for secondary sources, and then stick to that schedule. Don’t fall into “rabbit holes,” since there are so many sources.
Embracing Technology in Research Methods
Online Focus Groups and Virtual Interviews: The digital era has enabled virtual research methods. Online focus groups and video conferencing tools allow for remote interviews, making it easier to gather diverse perspectives without geographical constraints. These methods can be particularly valuable when targeting niche markets or global audiences.
Mobile Surveys and Real-Time Feedback: Utilize mobile technology to conduct surveys and collect real-time feedback. Mobile surveys offer convenience to respondents and can increase response rates. Real-time feedback mechanisms, such as in-app surveys or interactive polls on social media, can provide immediate insights into customer experiences and perceptions.
4. Analyze and Summarize
You’ve completed the market research – now what?
This is where good businesses often stumble. They spend a lot of time doing a survey, for example, but then the survey sits. They do nothing other than look at some charts.
The best data is useless if not analyzed properly. Analyze the data, draw conclusions, and take evidence-based actions. Your research may identify new opportunities, or it may indicate that you should not take actions you were planning to take. Come up with a list of action items based upon the data.
Summarize the results into a report. A report makes data usable internally. You and your team will forget the details a month later, so you need to be able to refer back to something.
5. Incorporate into Your Marketing Plan
Incorporate the research information into your marketing plan. Here are two examples.
Example 1: Company A used research to successfully adjust its marketing approach for a product launch. Social media research revealed that consumers responded to certain messages and not others. The company tweaked its marketing messaging to better convey the benefits consumers wanted to hear about, not the benefits the company thought were important.
Example 2: Company B conducted focus groups and found that instead of a single target market for the product, the market actually consisted of a few segments, all with different needs. The client was able to change its content marketing plan to address each segment with more meaning, rather than a one-size-fits-all plan.
For more, see these small business marketing ideas and strategies.
6. Adapt Internal Processes
Share the marketing research with your team and seek their ideas. Identify and implement a few actionable steps.
Market research may suggest that your processes and procedures need an overhaul. For instance, you may need to re-imagine your method of handling customer complaints. You may need to turn around reputation problems such as years worth of bad reviews. Or you may need to redesign your products to meet competitor offerings if your current value-add is low. Let’s look at two examples.
Example A: Company Y discovered after a focus group that while some of the services it offered were highly valued, others were not. The company was able to shift efforts and resources to the services customers wanted most.
Example B: Company Z observed a few business customers using its product in their offices, and discovered that customers in certain verticals were using the product in unexpected ways. Company Z was able to get testimonials that specifically mentioned these use cases and saw sales conversions in those verticals grow.
Staying Agile with Ongoing Research
Continuous Market Monitoring: The market is dynamic, and consumer preferences can change rapidly. Implement systems for ongoing market monitoring to stay ahead of trends. This might involve regular social media sentiment analysis, keeping an eye on competitor activities, and tracking industry news.
Feedback Loops and Iterative Learning: Establish feedback loops within your organization where insights from market research continually inform business strategies. Encourage a culture of iterative learning, where marketing initiatives are regularly reviewed and adjusted based on the latest research findings.
| Market Research Steps | Description |
|---|---|
| Identify Your Goals | Define specific market research goals that align with your business challenges and objectives. These goals might involve comparing competitor prices, enhancing customer service, identifying ideal customers, isolating effective ad campaign messaging, or sizing the market for new products/business ventures. |
| Choose a Type of Research | Decide between primary and secondary research based on your goals. If primary, determine the format, such as interviews or online surveys. If secondary, explore relevant sources, including government research and industry organizations. |
| Conduct the Research | Engage in customer research through interviews, focus groups, and surveys. Tailor your approach based on the insights you aim to gather. |
| Interviewing Customers | Conduct interviews over the phone, in-person, or using web-based tools. Speak to a representative sample of 10 to 15 individuals from your target audience. Prepare questions in advance and ask for permission to record the interviews for reference. Avoid guiding responses to ensure honest feedback. |
| Holding Focus Groups | Organize focus groups with 8 to 10 participants, either in-person or online. Start with introductions and create a welcoming atmosphere for open discussions. Limit sessions to 90 minutes to ensure valuable insights and diverse opinions. |
| Conducting Surveys | Use online survey tools to gather customer feedback. Structure surveys to collect demographic data and substantive insights. Analyze collected data for trends and segments, leveraging charts and graphs for visualization. Consider surveying non-customers for industry insights. |
| Best Practices | Follow best practices, including pre-testing interviews and surveys, respecting respondents' time by keeping interactions concise, using plain language, and framing questions from the customer's perspective. Use vocabulary that respondents recognize while tailoring questions for specific answers. |
[embed]https://www.youtube.com/watch?v=V5kGgU7bVuU[/embed]
Conclusion
We hope this Guide has helped you understand what is market research in business. Most small businesses and startups could achieve greater success if they did simple exploratory research before launching a product or starting a business. Whatever your budget or staff size, research will make your business more proactive and results-oriented, with decisions based on fact, to power your growth.
Image: Depositphotos.com
0 Comments