Market research is a critical phase of planning process that helps business owners understand how their audience thinks, what kind of products/services the customers like, who their competition is, and the viability of their product offerings.
The more thorough you are with your research, the better prepared you’ll be for the eventual challenges that come with starting a new business.
Make no mistake about it; there will be challenges no matter what industry you decide to invest in.
The problem, however, is that it’s very hard to conduct detailed consumer and competitor analysis on a small business budget. Most entrepreneurs won’t have the time nor the money to fund things like full market surveys, SWOT analysis, questionnaires, etc. which are all common tools used in the industry to gather information.
Instead, these new business owners must improvise and come up with intelligent ways to get the same amount of data as a standard consumer survey while spending only a tenth of their marketing budget.
This sounds impossible at first, but we’re here to tell you that there are certain tactics you can use to get the insight you’ll need to get your business off the ground. In this article, we’ll discuss 5 of these tactics in detail.
The Importance Of Market Research
Before we get into the tools and tactics you should use, it’s important to understand why you need market research in the first place.
We all agree that customers are vital to a business’ success, but when was the last time you sat down and genuinely thought about your consumers as people – human beings – instead of figures on a profit-loss statement?
This is a common problem in the modern industry.
We’ve seen countless examples of entrepreneurs whose businesses failed simply because they didn’t consider their customers’ needs and requirements while creating their products. It wasn’t that there was a lack of demand for such a products or that they weren't manufactured keeping the quality intact. Rather it was about overlooking what the customer was specifically looking for while producing items that the business deemed suitable.
Market research has countless benefits for small businesses, such as helping you:
- Create more focused marketing material
- Identify industry requirements that need to be addressed
- Understand your customers’ psyche
- Minimize the risk of introducing new products
- Determine the viability of your business plans
To put it simply, thorough market research helps you get into your customers’ minds, ensuring that your products/services are optimized for maximum usability and an enjoyable user experience.
4. Affordable Market Research Techniques
1. Online Surveys
When business owners hear the word ‘survey’, they usually think it requires an immense amount of legwork and effort to reach out to thousands of customers, but that simply isn’t true.
We live in the digital age, where people spend more half of their day browsing the internet. Use this to your advantage.
The great thing about online surveys is that they’re usually going to produce far more accurate results than if you simply walked up to customers and talked to them face-to-face. It’s normal human psyche. We tend to be more honest about things we don’t like when we don’t need to reveal our identity to the person at the other end.
However, you’ll need to be smart about this. Consumers are flooded with surveys on a daily basis and most of these are never given a second look, let alone answered.
It’s usually a good idea to offer some kind of incentive for completing the survey. For example, you could offer a discount voucher to customers who successfully complete the survey.
While there will still be people who opt out and you won’t get as many responses as you were hoping for, it’ll still be enough to establish a solid baseline
2. Social Media
It’s incredibly surprising to learn that even in this day and age, a large number of business owners still don’t understand the power or the importance of social media for businesses.
You’ll be hard pressed to find anyone who doesn’t have at least a Facebook account. Those that don’t are typically found on Twitter or Instagram. You’ll always find one way or the other of reaching your customers digitally.
This is an excellent opportunity for new businesses since you can extract a lot of the information you’ll need about the industry, without your own established customer base.
When on Facebook, join a few of the business groups in your industry and start participating in the discussions. You can also add posts about your own concerns.
It’ll take some time, but eventually you’ll have enough data to work with. These groups are also extremely useful for getting your surveys across to a large number of people.
3. Data Analytics
If you’ve been a business owner for a few years, you’ll know that customers don’t always know what they really need, even though most will always tell you what they think they want.
Successful entrepreneurs know that it’s useless to chase after what customers ask for because their preferences are extremely volatile and will have changed by the time you produce the product/service they originally asked for.
Instead, the smarter approach is to study consumer behaviour in detail using data analytics software. These tools scan your website and tell you exactly how long customers spend on each page, which sections they click on most often, what information they read on your pages, and other useful information.
Analysing all of this data helps you understand how your customers think and what they want, meaning you can optimise your products/services according to their requirements. This gives you a huge edge over your competitors since you’ve already created something that is guaranteed to get customers’ attention.
The biggest benefit of using tools like Google Analytics is that this is the most cost-effective method of performing market research. You spend close to nothing to gain access to the data of millions of customers.
4. Competitor Analysis Tools
Unless you’re introducing a completely new concept into the market, there’s a high chance you won’t be the only business in your niche.
This is an excellent opportunity to study what’s working for your competitors and what’s not so that you can avoid their mistakes and take inspiration from their success stories.
To perform a detailed keyword analysis in your target industry, go to Buzzsumo and start searching for content relevant to your products/ services.
Aside from content, make sure you study your competitors’ marketing material. Look at the kind of promotions they run on their online stores, the kind of message they give through their brand, etc.
All of this information will be extremely useful as your business starts to grow since you’ll have a general direction to head in.
While you’re conducting this research, make sure you only use data that is relevant to your brand. The last thing you want to do is to copy someone else’s idea
Conclusion
Once your business established, you can consider using more expensive methods of market research such as focus groups and full market surveys.
Until that happens, however, the 4 methods on this list are the most cost-effective ways to get into your customers’ heads so that you can you offer them exactly what they want to buy.
For a small business in a large industry, this type of research can provide a huge competitive edge since not a lot of companies bother investing money into any kind of market analysis.
