One of the most common mistakes small businesses make is they don’t do their homework well when they are designing their product or service list. What if you work on adding more products or services only to see there’s no interest in them? What if you decide to launch an advertising campaign only to be disappointed by the results and lack of ROI? These are all situations that many businesses, both big and small, can experience. What differentiates a successful project from one that fails?
The answer is simple: marketing research.
So, in today’s blog, our business advice will be toward helping you understand the value of marketing research, how it differs from market research, and how to utilize it.
What Is Market Research?
Many people often confuse market and marketing research. They are close terms but not at all the same.
Market research is a process of collecting information related to a business’s clients, target leads, competitors, market size, and more. As the person or business commissioning this research, you can use this information to develop services and products, increase your lead generation rate, set prices, boost sales, create smarter marketing and advertising strategies, improve your customer service, etc..
In other words, it is the process of finding the essential data related to your industry and business. Every strategy and new venture begins with research.
What Is Marketing Research?
Although they have significant touchpoints, market and marketing research are not entirely the same. Marketing research includes everything from market research plus additional data about your company’s marketing efforts. The goal is to assess not only the market you’re in or are planning to enter, but also the actions you are currently taking to market your business and what kind of response that has with your target audience. Aside from advertising effectiveness, marketing research also focuses on salesforce effectiveness.
Breaking Down Marketing Research
To make things easier to understand, we will break down marketing research into several separate components, and we’ll look into each:
- Customer Research
- Advertising Research
- Product/Service Research
- Distribution Research
- Sales Research
- Environment Research
#1 Customer Research
This includes researching and understanding the demographic and geographic spread of your customers, as well as their buying behavior and motivation behind it. It also includes customers’ spending power and creditworthiness. Customer research is used for targeting and segmentation purposes, as well as for developing new products and services and predicting or spotting trends.
#2 Advertising Research
Building upon the data you have gathered, from the Customer Research, this section focuses on estimating the effectiveness of your advertising campaigns. It is about reviewing how the actual results measure up to your preliminary plans and expectations. Are your ads attracting your target clients, are they converting, do they start following your business, there are many questions to ask at this stage.
#3 Product/Service Research
Whether you’re developing a new product to add to your inventory or are thinking of offering a new service to your clients, you need to research the market and your target audience first. What if you don’t? You can lose resources in the process, and your reputation as a company can suffer, too.
When it comes to products, testing the prototype on customers can provide you with valuable insights, both in terms of the product itself and in how it is packaged and marketed. As for services, testing them with a couple of clients can help you find areas of improvement, learn which parts they enjoyed about the service, and which parts need to go or be completely re-made.
Select a number of customers to give your product or service a try, you can go with loyal clients or people who fit your ideal buyer description and offer it to them. Explain the purpose of this offer (a.k.a. research), and collect their feedback.
#4 Distribution Research
How is your product or service going to reach your clients? That’s the question this section is supposed to help you answer. If you’re selling painting tools, will you partner with physical stores, or will you look for online retailers? What are the pros and cons of each, and how are your competitors doing it, etc.? Distribution is key in every aspect of your sales funnel, so make sure you or your researchers are thorough.
#5 Sales Research
In the end, it is all about your ability to sell something to someone, no matter if that is a cocktail dress or a landscaping service. Here, you need to assess the effectiveness of different sales techniques, salespeople, and sales management methods. Your sales research should cover online advertising, too. There is hardly a business out there that isn’t in some way investing in marketing their business online.
#6 Environment Research
This is a type of research you need to be doing on an on-going basis. It focuses on the business environment where your company is active. What are the potential threats and opportunities for your business? What are the social and political factors that might affect your company? What about the economic and technological aspects of your market? The external factors that influence your business are in no way to be underestimated. Financial crises or instability, for example, can help you avoid making risky investments.
How to Do Marketing Research as a Small Business
If you don’t feel ready to turn to an agency that specializes in doing marketing research, there are a couple of things you can do yourself.
Add a survey form to your website
This assumes you already have a website, and if you don’t, now is the time to get it. Keep it short and concise, so your website visitors engage with it.
Find Facebook groups relevant to your target market
This provides a free way to easily communicate with target customers online. You can give advice, ask questions, gather information from their posts, etc.
Engage in short conversations with people within your target market
Let’s say you’re looking to start a remodeling business. Talk to your contacts who have recently completed a remodel or are looking for a remodeling service. Ask them about their experience in contracting and working with a remodeling contractor. You don’t often need the nitty-gritty details. Sometimes a 5-minute conversation is all it takes for you to get insights on certain aspects of running your business.
Why Small Businesses Need to Do Marketing Research
As a small company, it can be really easy to dismiss the idea of doing marketing research. Yes and no. Think about it: if you’re just starting out, you will need a constant flow of customers and steady sales for your company to succeed. It is through market and marketing research that this can be made possible. It will prevent you from making incorrect assumptions about your target audience and client behavior, and it will stop you from making costly mistakes.
We live in a world based on trial and error, and it is marketing research that helps bridge the gap between improving the trial and reducing the error.
Stay tuned for more articles full of small business tips and tested advice!
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