Lower Business Risks
Around half of businesses with employees don’t survive past the fifth year, according to data from the Bureau of Labor Statistics. The way to make sure that your business survives for longer is to ensure that you’ve got a steady stream of sales and customers. To do that, you need market research.
Regular market research will be your way to check in with your current customers and potential customers to ensure that you’re still meeting their needs. Here’s how you can apply this:
Test new designs and products before launching. Before you go all-in on a dramatic change for your business, you can test it on a smaller subset of your audience to see if the change would be welcome.
- Find out why customers don’t come back.Ideally, your small business should have recurring customers. If they don’t come back, you can conduct a survey of previous customers or set up a focus group to find out why you’re not making any repeat sales.
- Get insights on problem areas. If your most popular product sees a big drop in sales for three consecutive months, you need to find out how to fix it before it ruins your profits completely. Survey your most frequent customers about the product and find out where the problem lies. It could be anything from a decline in the product quality or a glitch on your online store. You’ll never know unless you ask.
Know Where to Advertise
One of the problems that small business owners face is a limited budget. Because of this, your marketing budget should be optimized to give you the best returns possible. Your market research can help ensure that you’re reaching your intended audience in the channels where they’re most likely to see your message.
These are some of the budgetary tasks that your market research can help with:
- Buying ads on social media. If your market research shows that your target audience spends most of their time on Instagram and almost never use Twitter, you’ll know to direct most of your social media ad budget to Instagram and forget about Twitter.
- Placing flyers and posters.Knowing the physical spaces where your customer spends their time will tell you where you can best place your advertising. For example, university students are likely to be on campus, so placing ads for that market means that you can try bulletin boards on campus or outside local establishments that their crowd tends to frequent.
- Targeting ads.Online ads such as social media ads and pay-per-click ads can often be targeted with precision. This means that you can target based not just on the usual demographic data, but also based on online behaviors, life stage, and interests. If you truly know your customers, you’ll be able to maximize the potential for targeting.
Set Better Goals for Your Business
When business owners set goals for their business, it’s typically related to growth in sales or customers. But without market research, you won’t be able to know if your goal is achievable and how to achieve it in the first place.
You might say that you want to double sales by the end of the next quarter. With market research, you’ll be able to determine the specific directions you want to grow your customer base.
Easily Spot Business Opportunities
After you’ve done your market research, it’ll be clear to you who you want to reach out to (your target customers), where you can reach them (your marketing channels), and what they’re interested in. Once you’ve defined these, you’ll be able to easily spot business opportunities.
- Form partnerships with other businesses. Learning about who your customers are, such as their demographics, can help you find other small businesses that serve them. You can approach these businesses for joint promotions that’ll be mutually beneficial.
- Create profitable order upgrades. Knowing the other products and services that your customers tend to buy can help you come up with add-ons, product bundles, and upsells that increase the average value of each order.
- Find new locations to sell to.Knowing the geographical areas where most of your target customers live will allow you to create compelling targeted campaigns that suit the needs and culture of that area.
Create Relevant Promotional Materials
If you’ve ever wondered what text or images to put on your fliers, website, or social media accounts, with thorough market research, you’ll know exactly what to do. Since target customers have already expressed all their wants, needs, and frustrations with you, you’ll know exactly what to address and how to address it when you start creating your marketing materials.
The business that knows their customers more tends to win more. If you can beat your competitors at finding out your customers’ needs and you aim to fulfill those needs, you’ve got a better chance of standing out from the competition. Here are some ways you can use market research to outsell competitors:
- Target dissatisfied customers. Asking target customers about their frustrations with your competitors’ products or reading their product reviews can help you improve your own products and market them to an audience ready to switch brands.
- Find an underserved customer segment. Your market research might reveal that there’s a segment of the market that your competition has neglected. This will give you a new customer segment to reach out to.
- Identify unaddressed customer needs. During your market research, you might uncover some customer pain points or desires that you don’t see addressed in your competitors’ marketing materials. Try including them in your own marketing and see if the results show an increase in sales.
Decision-Making Becomes Simple
The need for and importance of marketing research frequently comes up when making tough business decisions. Instead of having arbitrary criteria for the decisions you make as a business owner, you can always go back to your market research report.
While not all decisions should be solved by market research, many of them can be, such as:
- where to spend your advertising or marketing budget
- whether there’s a demand for a new product you want to make
- if you should open a storefront in a new location
- which products to discontinue and which ones to merely improve
- how to price all your offers
There’s a real need for market research because it provides you with solid facts. Through market research, you’ll make more informed decisions rather than resting the fate of your business on guesswork.