Market research is an essential tool for businesses of any size or industry to understand their target audience, identify customer needs and preferences, and gather information about their competitors. In a nutshell, market research helps businesses grow and succeed. This is a primary goal for small businesses, making market research integral to small businesses making data-driven decisions that will help them to grow and succeed in their industry.
According to the U.S. Bureau of Labor Statistics (BLS), almost 45% of new businesses fail during the first five years, and the biggest reasons for this are almost obvious: poor market fit, lack of funds, competition, lousy location, drastic market changes, and many others. Most of these challenges can be stymied by understanding customer needs and the market environment – which is what market research does.
Market research may look like an unnecessary step that costs some money, time and effort yet looks dispensible for smaller businesses. However, it is a basic step that may determine the business’s life. Conducting market research can be expensive and time-consuming, but not having proper data can lead to even costlier mistakes and a lack of understanding in the market, so it is critical to be able to invest in market research.
And market research doesn’t have to be complicated or expensive. In this article, we look at simple steps to conducting market research for small businesses and the important data that they can collect.
Steps to conducting market research
One of the first steps in conducting market research is to define the research objectives. This will help the business to focus on the specific information that they need to gather. The research objectives should be specific, measurable, achievable, relevant, and time-bound (SMART), and once the objectives have been defined, the business can choose the appropriate research methods to collect the data.
There are two main types of market research methods: primary and secondary research. Primary research is conducted by the business itself and can include surveys, interviews, and focus groups. This method allows the business to collect firsthand information from its target audience and gather their opinions and feedback. Secondary research, on the other hand, is conducted by using existing sources such as published reports and studies, government statistics, and industry publications.
After the data has been collected, it should be analyzed and interpreted to extract valuable insights. This can be done through statistical analysis, customer segmentation, and competitive analysis among other methods. Once the insights have been identified, they can inform critical business decisions such as product development, pricing strategy, and marketing efforts.
Types of market research data that small businesses can collect
There are several types of market research data that small businesses can collect in order better to understand their customers, target market, and industry. Some common types of market research data that small businesses should consider collecting include:
- Demographic data: Information about the age, gender, income, education, and occupation of their customers and target market. This type of data can help a small business understand the needs and preferences of their target market and tailor their products or services accordingly.
- Behavioral data: Information about how customers use a small business’s products or services, as well as their opinions and attitudes towards the business. This type of data can help a small business understand customer satisfaction and identify areas for improvement.
- Competitive data: Information about the products, services, and marketing strategies of a small business’s competitors. This type of data can help a small business understand its competitive landscape and identify opportunities for differentiation.
- Sales data: Information about the sales of a small business’s products or services, including information about the number of customers, revenue, and profit. This type of data can help a small business understand its financial performance and identify areas for growth.
- Social and Online data: With the help of different tools one can collect data from various social media platforms, reviews websites, ratings, searches, and other online data, which can be helpful in understanding how customers view the business, how they find the business, and how they engage with the business.
- Surveys: One of the most potent tools of market research, surveys are a way to gather direct feedback from the customers, which can be used to improve products or services, customer satisfaction, and understanding of the target market.
In conclusion, market research is a valuable tool that small businesses can use to gather important information about their target audience, competitors, and industry. By conducting market research, small businesses can make data-driven decisions that will help them to grow and succeed in their industry.
Keep in mind that collecting market research data can be time-consuming and costly, so small businesses need to focus on the types of data that will be most valuable for their specific needs. Engaging experts like GeoPoll can also greatly cut the costs in money and time while producing more reliable reports.
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