Would you buy a car without researching it? What about a house? Would you give your boss a report you hadn’t researched? No, no, and definitely not. And yet, entrepreneurs frequently try to launch new product campaigns and target new markets without doing marketing research.
According to William Bill at Wealth Design Group LLC in Houston, TX, “Failure to do market research before you begin a business venture or during its operation is like driving a car from Texas to New York without a map or street signs. You have to know which direction to travel and how fast to go. A good market research plan indicates where and who your customers are.
It will also tell you when they are mostly likely and willing to purchase your goods or use your services.”
Although all businesses need to conduct marketing research, small businesses are more vulnerable to changes in their niche — but they also are more able to adapt and respond to fluctuating markets — than their big business counterparts. Entrepreneurs therefore should be giving more attention to researching the trends and attitudes of that market.
With just a minimal amount of research you can discern if your customers are satisfied with you and your products: do you need to start offering free shipping? Are your customers willing to pay more? Is your current product packaging boring? You can answer these questions and gather all the information you need to adjust your business operation for maximum profitability.
But you have to ask the right questions, and you have to ask the right people at the right times to conduct successful research. Just like a bad tip in the stock market can ruin your investment, bad research can wreck your business.
So here’s everything you need to know about marketing research basics:
Remember in high school when you had to write a research paper with primary sources? Primary research in marketing is a rough equivalent to that kind of information. The purpose of primary market research is to collect information based on your current sales and operations. With the data you collect you can run several different types of analyses to help direct your business. Additionally, primary research can be used to glean information about your competition, which will always give you an edge.
Data gathered by primary research can be obtained by:
- Phone, face-to-face, or email interviews, with customers, suppliers, investors, competitors, etc.
- Online or print surveys
- Holding focus groups comprised of customers or clients and soliciting direct feedback
Entrepreneur Magazine recommends asking the following questions:
- “What factors do you consider when purchasing this product or service?”
- “What do you like or dislike about current products or services on the market?”
- “What areas would you suggest for improvement?”
- “What is the appropriate price for a product or service?”
If primary research is straight for the horse’s mouth, secondary research is the horse’s story according to the rancher. In this case it means that when you conduct secondary research, you are reviewing previously published volumes and data stores and analyzing those data, using the results to direct your efforts. Secondary research is extremely helpful in identifying your target market — ie the people who want your products or services — and your competitors. Plus, studying trends will help you set benchmarks for your own company. McKinsey Quarterly regularly publishes great material, and there are hundreds of other resources you can use when conducting secondary research.
Qualitative vs. Quantitative
Another important aspect of collecting information is the kind of information you’re gathering. In marketing research there are two basic types of information: qualitative and quantitative.
Qualitative data is very useful in determining customer satisfaction levels and other hard-to-track points of data. Any information you gather during an interview, for example, will most likely be qualitative, because the nature of the questions you ask in interviews is largely open-ended. What a customer thinks of your new logo is a qualitative concern. But if enough of them have the same response, data like this can save your business.
Quantitative data deals with quantities: how much, how long, etc. Many small business owners today run online businesses, which makes quantitative research much easier for them, as products like Google Analytics run constant analysis on data points such as where incoming leads are arriving from, what percent of your ads are being clicked, how long visitors stay on your site, and so on. Looking at these data can make quick work of devising a strategy, because they lead you to conclusions about your customers that you can use.
Make sure to cover all these bases when conducting market research, and you’ll be on your way to huge profits and great success, as you will always be giving your customers exactly what they want.