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Businesses of every size rely on data to sell their product or service, and that’s where a successful market research strategy comes into play. To fully understand the scope of your customer base and market your products to them, thorough research is necessary.
This is particularly crucial for small and midsize business (SMB) marketing, as you often lack vast corporations’ budgets and tools. Understanding your target market will help you properly utilize the resources at your disposal and make the right business decisions to reach your ideal customer, from better advertising to creating the right products for your market.
Why Engage in Market Research?
There are so many reasons why businesses of all sizes should engage in market research. Through this data, you can learn about how your audience thinks, where they live, and what type of work they do; you can learn about your competitors; you can find out what additional factors influence your customers’ buying decisions, and you can discover gaps in the market you need to address.
Read on for expert tips on implementing market research in SMB outreach strategies.
Conducting Market Research: Where to Begin?
For small and midsize businesses, conducting market research may sound daunting, especially in the early stages. But the benefits of doing market research are well worth the time and effort, as you’ll ultimately scale back on unnecessary marketing costs once you better learn which customer groups to target. After all, the key to any successful business in today’s digital world is strong marketing.
So: where to begin? First, it’s crucial to understand the market research types available. Generally, market research is divided into two categories, primary and secondary. Each has practical uses in determining whether an existing or upcoming product or service will be helpful to your potential customers or learning more about how customers perceive your brand.
Primary Research vs. Secondary Research
Both types of market research can be helpful when forming your marketing strategy, but it’s essential to understand the difference between the two types. Primary research refers to data collection done firsthand, whereas secondary research refers to data collected by third-party companies. Both will give you valuable takeaways about the state of your industry and how your customers think, though it can take weeks or even months to gather all of the data.
Primary research includes data collection like customer surveys, focus groups, interviews and more. While this used to be more difficult for businesses to gather for themselves, especially smaller companies, new forms of technology have made it relatively easy for companies to collect their own data. Online surveys or a virtual focus group can allow an SMB to gather insights without spending money on massive research budgets.
Secondary research, meanwhile, uses data gathered by third-party companies. It can be used on its own or in support of primary research. Secondary market research data can often be a cheaper and quicker solution for small business operations that don’t have the tools to gather all the data on their own.
How to Conduct Primary Research
Suppose you’ve decided to go the route of gathering primary data. In that case, it’s helpful to begin by starting with a question (or questions) that you hope to answer through your quantitative research (hard data) and qualitative research (keywords and trends). From this question, you can zero in on which type of market research will best suit your needs.
For instance, if you’re trying to determine your overall brand perception, conducting focus groups and gathering consumer feedback from your current customers could be the best way to draw conclusions.
But suppose you’re hoping to understand the potential success of a new product in specific markets. In that case, you may want to collect demographic data and other details, like buying habits, on those consumer markets. Much of this data is free and easily accessible, such as information in the U.S. Census or internal data on your business’s retention rates and sales.
It might seem intimidating to approach market research as a small company, especially if you don’t have experience conducting research. Start small, with simple customer feedback surveys at the end of an email or checkout experience, for example.
Even reading business news or studying the significant trends of your industry can help answer questions and point you in the right direction — this is often called “exploratory research.” If you’re feeling stuck, try your local library for assistance accessing public records.
Qualitative vs. Quantitative Data
Once you can narrow down which type of primary research you want to pursue, you can set up the studies and begin collecting your data. Again, both quantitative data and qualitative data can help form answers to the initial question you posed for your business — it simply depends on the question you’re trying to answer.
What, exactly, is the difference between this type of data? Think of quantitative data as hard numbers. This is data gathered through extensive surveys or forms, which can be used across graphs or statistics. You can also pull quantitative data from existing records, like census reports or consumer trend reports, rather than conducting your own surveys.
Qualitative data, meanwhile, is harder to express directly through numbers, mainly because it represents the attitudes and feelings of your customers. A focus group, in-depth interview or written feedback on your brand or product can provide helpful insight into how your customer feels. However, converting this information into strict numerical values might be more challenging.
While it can be helpful to utilize both types of data in your market research, one tends to help answer your overall “question” directly. For instance, if brand perception is your focus, qualitative data will help determine how your customer feels about your brand. But if you want to learn how a past campaign performed, you may want to use quantitative data like conversion metrics and profits.
Utilizing Secondary Research
As mentioned, secondary market research can be used independently or in conjoint analysis with primary market research. Secondary research can be as simple as data already put together for you, like pulling names from a database or neatly packaged, in-depth reports provided by an online marketing company. There are many advantages to partnering with a third-party company to conduct research on your behalf within your industry.
For one, gathering information can be time-consuming, so relying on a specific business to gather meaningful insights on your behalf can reduce your team’s labor. Additionally, third-party companies will have expertise in the industry that an SMB may not.
They can conduct an in-depth interview, create a customer profile, or design the right research questions based on your question(s). They can even analyze another business or perform a SWOT analysis of your company. If you don’t feel you have enough experience, or team bandwidth, to conduct market research, partnering with an outside company could be the way to go.
Types of Research
Whether primary or secondary, there are many ways to gather information during the market research process. In some cases, you’ll want to work directly with your customers to collect data — i.e., customer feedback surveys or interviews. Similarly, in-person or virtual focus groups and product testing can give you key takeaways.
Other specific research formats allow you to learn more about your audience without engaging with them directly. Researching your buyer personas and how to best segment your audience will allow you to design marketing campaigns that appeal to your customers.
Then some formats focus on the broader industry. A competitive analysis of other businesses can help you understand the landscape, as can pricing research, allowing you to understand what your customers are willing to pay.
Finally, you can zero in on how your overall brand connects with customers. Studying customer satisfaction will help you retain business, while learning about how consumers perceive your brand in the market will help attract new customers. You can also analyze past campaigns, see how they performed, and determine what markets they impacted the most. In turn, this helps design new campaigns.
Start Analyzing Your Data
Between your primary and secondary research, you should eventually have plenty of specific data to help target customers. The next part of a successful market research campaign is translating this data into usable strategic insights.
Organize your learnings — again, both quantitative data and qualitative data are crucial — anonymously, and focus on the key takeaways and standout trends. Anonymity in market research is vital, as it ensures your final results will be free of bias from those conducting the research. Additionally, by telling your customers upfront that your research is confidential, you can ensure you get authentic results.
When it’s time to present your finding, organize the data into an easy-to-understand report that others in your company will be able to understand. Grouping your findings into broad categories will make it easier to digest and also make it easier to decide on actionable next steps. You are essentially looking to have an answer to the original question you posed when beginning your market research journey. What did you learn, and what next steps can you take to solve your problem?
Supercharging Your SMB Outreach Strategy
Any market potential you come across in research should be shared with your internal team so you can implement your findings and gain a competitive advantage. Many easy-to-find data points can be used by small businesses to better reach target customers.
For instance, if one of your findings were that most of your target audience was young women, you’d want to highlight this information, as your marketing strategy will be geared towards this demographic. Or perhaps you discover that a competitor’s success stems mainly from social media marketing or SEO marketing — this is an area of opportunity that you’ll want to invest in, too.
Even a brief analysis of industry trends will help you reach out to a specific market so you aren’t wasting your time with people who aren’t interested in your product. Everything from market surveys that you conduct internally to market statistics provided by your industry trade association will help you find that niche target audience and, ultimately, improve your bottom line.
Although you may feel that you already understand your customers, it’s important to remember that your customer niche doesn’t represent the industry as a whole — which is why market research, conducted regularly, is crucial to keeping a leg up on the competition. Whether you conduct it independently on a small scale or partner with an outside firm to get data and create extensive reports, market research is necessary for the growth of any business.