No matter how small you think your business might be, it’s important that you always have a good grasp of who your customers are, and why they buy your product or service. This is why market research should be an important element of your annual business planning process.
While there are companies who sell you everything from detailed research brochures to credit reports on your current and potential customers, the best market research is done on your own. In-house market research can take many forms, from desk research to sending out a crack team of employees to interview identified customer groups.
Ultimately, you want to be able to answer the following questions:
Who are your current and potential customers? Demographic data such as age, income and occupation are what you need to answer these questions. You should also gather data on their lifestyle, value systems, emotional drivers.
What are they currently buying? Data or information on their buying habits pertaining your product or service, including the price points, features that drive purchase, and quantity. You also need to find out what the substitutes are – both direct and indirect.
Why do they buy? That is a tricky question to answer, as everyone might have different opinions or benefits that drive purchase. Your questions can also lead to certain assumptions if they are not crafted properly.
What will make them buy from you? Getting detailed answers to this can help you craft a compelling value proposition for your target market.
To ensure you get the best out of your market research process, here are a few tips to get you going.
Identify the Problem
A focused market research process guarantees you the best results. What are you looking to get out of this process? Are you also looking to get data on your competition? Deciding on the form and sort of data you need answers half the questions already.
Another way to get at this fast is to ask:
What issues are we facing as a business that our market research should help solve?
Market research could to help solve plummeting sales, or a proposed venture into a new region. You however can’t research everything, so prioritize on your “biggest payoff” and focus.
Agree on the Research Design
The research design is one of the most important elements of your research project. It is the blueprint of your research process. It defines the methods you will use to collect, organize and analyze data.
At this stage, you need to identify all possible data sources, the form of data you plan to extract, and how you will analyze them to ensure you get the best possible insights. The success of your market research process will be largely determined by how well thought out your research framework is. You should probably consider bringing in experts to help design this, if you have the budget to do so.
Put Together a Plan and a Budget
Lastly, draft down a plan and a budget. Most small business owners neglect this, but it’s super important.
- How many days will planning take?
- Will the results be analyzed in-house or will you outsource that to professional statisticians?
- How will your team get across town to interview or survey respondents?
Get used to factoring in all expenses, making sure to track down each expense and never combine your own money with business accounts. Even small business decisions like planning trips need to be highly budgeted.
You can plan to save by using a car rental comparison the next time you travel for business. This way, you know how much you’ll have to pay for a vehicle way ahead of time. Investments and supplies for the office can all be accounted for in advance as well.
With planning and budgeting, it’s all about proactive thinking. This is as essential as your research design and research question focus.
Final Thoughts
Market research is not a big-business luxury, or some line item you somehow never tick. The insights gleaned from a well executed process can take your business from small to successful in no time.
