Market research is the process of gathering information about your business’s buyers, target audience, and customers. You need it to determine how successful your product or service would be. Market research tells you where these members
of your audience customers are conducting their buyer research about products and services similar to those you sell.
It also tells you what’s trending in your industry, what your target audience needs out of products and services like yours.
There are two main types of market research that your business can conduct to collect actionable information on your products including primary research and secondary research.
Primary research is the pursuit of firsthand information on your market and its customers. You can use focus groups, online surveys, phone interviews, and more to gather fresh details.
Primary research is useful when segmenting your market and establishing your buyer personas.
The goal of secondary research is to analyze data that has already been published. With secondary data, you can identify competitors, establish benchmarks and identify target segments.
Your segments are the people who fall into your targeted demographic. People who live a certain lifestyle, exhibit particular behavioral patterns or fall into a predetermined age group.
Small business can’t succeed without understanding its customers, its products and services, and the market in general. Competition is often fierce, and operating without conducting research may give your competitors an advantage over you.
There are two categories of data collection: quantitative and qualitative. Quantitative methods employ mathematical analysis and require a large sample size. The results of this data shed light on statistically significant differences. One place to find quantitative results is your website, in your web analytics (available in Google’s suite of tools).
This information can help you determine many things, such as where your leads are coming from, how long visitors are staying on your site and from which page they are exiting.
Qualitative methods help you develop and fine-tune your quantitative research methods. They can help business owners define problems and often use interview methods to learn about customers’ opinions, values, and beliefs. With qualitative research, the sample size is usually small.
Many new business owners, often strapped for time and money, may take shortcuts that can later backfire.
Common Marketing Mistakes
- Using only secondary research. Relying on the published work of others doesn’t give you the full picture. It can be a great place to start, of course, but the information you get from secondary research can be outdated. You can miss out on other factors relevant to your business.
- Using only web resources. When you use common search engines to gather information, you get only data that are available to everyone and it may not be fully accurate. To perform deeper searches while staying within your budget, use the resources at your local library, college campus or small-business center.
- Surveying only the people you know. Small-business owners sometimes interview only family members and close colleagues when conducting research, but friends and family are often not the best survey subjects. To get the most useful and accurate information, you need to talk to real customers about their needs, wants and expectations.