While a good product or service is crucial to your success, it’s not the only important thing. Understanding the people you’re selling to helps you to better place your offering in the context of their lives. And this gives you a clearer picture of how much they value it. Some products or services need to evolve over time to keep up with the changing needs of their customers. Others may need to branch out to cater to the differing needs of a new consumer segment. Whichever the case, it is market research that keys you into the need of the hour.

Is Market Research Important for a Small Business?

Market research helps you create more impactful strategies that connect with your target audience and keep your brand on point. Creating an accurate customer profile (or ‘avatar’, in marketing-speak) with details on what they value, how they make buying decisions and their opinions of other companies in the industry, helps you tailor your own strategies better, giving your business an edge.

Got a Small Budget? No Big Deal!

Market research is often trimmed or cut altogether due to the lack of funds, especially for smaller businesses. Having a smaller budget just means that you have to be more careful about where you invest your funds. In other words, carefully choose when you’re going to invest in research. Market research is recommended when you’re:

  • Wondering if the idea you have for a product or new business is actually feasible. Before you put in heart, hard work and money into it, check to see if you can realistically expect sufficient returns.
  • Moving your offering into a new market. Products and services don’t always translate well, especially if you’re considering moving it abroad. Cultural variations, different lifestyles, working styles, new languages and religion all have an impact on the popularity of your product. Even moving to a new city within the same country could be tricky.

Research will tell you if your offering is a good fit for the new market. You can use the insights you receive to make the necessary changes to fit the new market or to identify a more suitable place to expand into.

  • About to launch a new product or service. We are often blinkered by our own opinions and forget that what we take for granted may not be the same for others. It always pays to get a fresh set of eyes before a launch. Asking for new perspectives and differing opinions will help you see the whole picture more objectively.
  • Raising funds from investors. Many entrepreneurs will agree that, from time to time, you may need to trust your instincts and experience. But when you’re preparing for a pitch, you must arm yourself with relevant data and solid market research that demonstrates exactly how your business is filling a gap in the market.

Starting Your Market Research

Start by getting your feet wet online – look for consumer groups in your industry, relevant national and local organisations. Articles or reports published by them will give you a good idea about market trends, its size and key points about the area you’re going to be operating in. There’s generally a lot of information out there so it’s easy to get lost in the data.  Make an effort to stay on point and define your target customers in as much detail as possible. How old are they, what gender? Where do they live, what is their socio-economic status? Where do they hang out online?

After this you can conduct your own research by reaching out to your target audience. You could hold focus groups or chat with people who are willing to give you honest, constructive opinions (not friends or family, they are rarely honest and constructive). Well-designed online surveys can generate a lot of useful data. You could also create a community on social media to gain insights into the needs of your consumers.

Testing your products and services with informed volunteers is another way to mine valuable feedback. From initial reactions to the product, discussing price ranges and packaging ideas to even getting their opinion on possible taglines, there’s plenty of information you can glean.

Keep it Relevant and Real to Get Results

  1. Begin early: This is important no matter what scale you’re going to be selling at. Understanding your audience can take time and energy. But, if you don’t start off right, you’ll waste money chasing the wrong people. Knowing who, what, and where puts you in the right direction from the start, not down some dead-end rabbit hole.
  2. Consult existing research: You don’t have to start from scratch. Lots of other people have already done the hard yards for you. Look for reports, or articles that have already been published. These could give you some relevant information to start off with. You can then spend your energy asking more specific questions to refine your research.
  3. Listen to what consumers are happy with, and what they aren’t: Luckily you don’t need a big budget for this. Use surveys, limited focus groups and feedback mechanisms for your existing customers.

For new markets, you can use the internet and social media to look up blogs, join in discussions and check trending issues. This will help you understand what your target market values.

  1. Use online tools: Easily accessible online tools such as Google consumer surveys or Google Trends can help you identify problem points that need to be addressed.

Market research is an excellent tool to help you improve your product, service and your marketing strategy. But remember that it doesn’t have the power to predict the trajectory of your business with a 100% accuracy. Small groups that make up focus groups may not represent exactly what the rest of your target market believes. Customers don’t always fill surveys honestly. And finally, existing research may not have taken into account the latest trends. Who would have ever predicted the market for face masks prior to 2020?

It cannot be denied that market research helps you make informed decisions on taking your business forward. It’s crucial for the success of your marketing and efforts, and the wider performance of your business.