Are you on the fence about investing in market research for your business?
If yes, it’s easy to see why. In-depth market research is a time and cost-intensive process. If you’re a small business, you probably don’t have in-house researchers and analysts, which means you’ll have to hire a consulting firm to do the job.
But here is the thing. You really have no choice, because market research is incredibly beneficial.
Continue reading to learn more about the importance of market research for businesses.
1. Establish Whether There’s a Market for Your Product or Service
Do you know one of the top reasons small businesses fail? They develop a product or service that has little demand in the market. Without enough sales, there’s no business.
So, how do you establish whether your upcoming offering will have adequate market demand? You guessed it. By investing in market research.
Researching the market enables you to dive deep into the regions you plan to be selling your product or service. By asking questions to random people, you’ll have a fairly good idea of whether people would want to purchase the product once it’s on sale.
If you have already developed samples of the product, this is the best time to give it out to people (for free) and wait for their feedback.
Did they love it? Did it solve their problem? How does it compare to similar ones that are already in the market? Would they buy it? At what price point?
Long story short, investing in market research before starting a business will help you make crucial decisions. If your research shows that the product doesn’t have enough demand, for instance, you’ll be better off holding off investing more money into the product.
2. Understand Your Customers
At the heart of every business operation is the customer.
How well do you understand your customers?
If you haven’t done any market research, the picture you have about your customers is probably distorted. If you’re a physical store, you could be thinking anyone who lives nearby is a potential customer.
Well, to succeed in business, you need to have a clear understanding of who your customer is.
How old are they? What’s their gender? How much money do they earn on average? Do they have families? What are the hobbies and interests? What about their political, cultural, and religious views?
Knowing your customer makes marketing easier.
For instance, if you know that your customers hold strong cultural views, you wouldn’t want the messaging on your ads or product packaging to evoke any cultural emotions. If you establish that most of your customers are sports lovers, you won’t be making a mistake when you resolve to sell your products in sporting events.
When you know your ideal customer’s age, it’s easy to choose the most appropriate social platform to reach them. If you’re targeting Gen Zers, for instance, you’ve got no business running ads on Facebook or Twitter. You’ll find your target market on TikTok or Snap Chat – and sometimes Instagram.
3. Know Your Competitors
Any good entrepreneur knows their competitors.
However, there’s a big difference between what an entrepreneur who hasn’t done market research knows about their competitors, and what an entrepreneur who has done market research knows.
If you haven’t invested in research, you probably just know competitors by name and where they’re based. But if you’ve done research, you know that there are primary, secondary, and tertiary competitors.
You also have the following information about your primary competitor’s
- Pricing strategy
- Sales and marketing strategy
- Customer experience (both online and offline)
- Online presence
- Shipping methods
- Hiring methods
Especially in the digital age, you want to know what your more established competitors are doing online. After all, you have the same target market, so if they seem to be focusing on Facebook as their go-to marketing platform, you have a reason to be there too.
In fact, sometimes having intricate knowledge of your competitors can save you a lot of hard work. Just copy some of their strategies!
4. Forecast the Future
There are several variables that can affect your business in the future.
For instance, customer preferences are always changing. To survive, your business needs to quickly evolve with those changes. But to thrive, your business needs to stay ahead of the customer’s changing preferences.
The question is: how can you be able to reliably predict what consumers' tastes and preferences will be like a couple of years from now? Market research is your friend.
When you’re always studying the market and collecting data, you can easily identify emergency trends before they sweep through the market. With such data, you’ll be in a better position to adjust your business operations strategically.
But you’re a small business. You don’t have the resources to constantly study the market, right? That’s no excuse.
You can partner with a research firm so that you have access to the latest market insights. Browse our links for more info on how a research company can offer you affordable custom market research and consulting services.
Embrace the Importance of Market Research
It’s understandable that you might be reluctant to invest in market research. It costs money and sometimes you might think it’s not necessary. You’ll figure out the market as you go, right? Wrong!
The importance of market research should not be underestimated. It opens you up to a whole new world of information that will enable you to make intelligent business decisions.
Keep reading our blog for more insights on the importance of market research and gaining market share. Visit the Digital Marketing and Startups sections of the Bootstrap Business Blog for additional insight!
