Navigating Market Research

Understanding your target audience may be one of the most important parts of being a small business owner. If you don’t know the wants, needs, likes, and dislikes of your clients, then why create a product or service for them to use? What issues are you solving with your business? What value does your product or service bring to your customers? The answers to these questions all lie in your knowledge of your target consumers. Whether you’re creating your products from home or have a warehouse with a team of employees, researching your audience is one of the key ways to stay ahead in the game of business. That’s where market research comes in. In this article, we’re breaking down the ins and outs of market research in a way that’s easy to understand, and more importantly, practical for your small business. So get ready to jump into the world of market research!

What is Market Research?

Before we discuss the importance of market research, we first have to understand what it is. Market research essentially refers to the process of understanding your customers. It allows you to now only define your target market, but you can also get opinions and feedback from consumers about their experiences with your products or services. Even huge corporations conduct market research before introducing new products. They need to see how well these concepts could perform in the marketplace. Companies don’t just launch the first idea their teams come up with; they must first understand what the market wants to see if that idea can generate a profit. Otherwise, they would be wasting time, money, and resources for something that consumers don’t even want. And as you navigate through your journey as a small business owner, you’ll soon see the importance of this understanding as well (if you haven’t already).

Benefits of Market Research

Market research allows you to truly gain a better understanding of your buyers. By understanding their problems, concerns, and desired solutions, you can determine methods to naturally appeal to them. Market research also allows you to answer some very important questions as a business owner, such as:

Where does my target audience and current customers search for their products or services?

What’s trending in my industry?

Who makes up my market and what challenges do they face?

How do my consumers feel about cultural, political, and social issues, certain topics, products, or other brands?

How do my customers feel about certain prices for a particular product or service?

Understanding these topics through market research allows you to fine-tune your products or services to really meet their needs. It also allows you to see the best methods of advertisement, communication, delivery, and customer service skills that your customers will want and appreciate.

Qualitative vs. Quantitative Data

Before diving into the different types of market research, we must first discuss the different types of data you’ll experience as you start your journey. There are two types of data that you’ll encounter: qualitative and quantitative data. Quantitative data is all about numbers. It encompasses anything you can measure, such as revenue, experiment results, website conversion rates and loading speed, and your customers’ demographics such as age, gender, religion, and ethnicity. On the other hand, qualitative data focuses on interactions. In other words, it’s all about the things that can’t just be measured with statistics. It’s observational; this data records how people interact in natural settings and includes responses to focus groups and interviews. Your customers’ opinions, thoughts, likes, and dislikes all make up this kind of data set. Both of these two types of data go hand-in-hand; you won’t get a full understanding of your customers if you have one and not the other. As you start your market research journey, make sure you’re getting all the necessary information from these two types of data.

Primary Research

Now, let’s get into the nitty gritty of market research. The first kind of market research you’ll encounter is primary research, which is commissioned for a particular purpose at a particular time. This is the kind of information that you’ll obtain first-hand. You’ll be the one conducting the research or commissioning someone else to gather the data for you. It’s specific, relevant, and unfortunately limited because of its higher costs. You’re essentially going directly to the source (your customers), rather than relying on pre-existing data samples (such as doing a simple Google Search on your target audience). This kind of research includes everything from releasing surveys, gathering reviews, or even doing some experiments.

Experimental:

The first type of primary research is experimental. As its name entails, you’ll essentially be conducting experiments on your consumers’ responses to your products or services. Large companies have the luxury of conducting actual experiments to test their products; however, we small business owners don’t have the resources to do this. However, there are types of experimental research we can do with the time and money we have at our disposal, such as test-launching a new product or service (for free or for a discounted price) to understand how your customers would react to an official launch.

Non-Experimental:

Non-experimental research is all about qualitative data. It’s all about observing and understanding your customers. Imagine this: you’re running your business as usual and want to figure out why your sales go up on the weekends and go back down on the weekdays. Non-experimental research helps you understand this situation. This type of research includes conducting surveys via email, asking your clients to leave reviews on your website, and reading other forms of customer feedback you can get on social media. This approach is perfect for us small business owners because it’s cost-effective, practical, and gives us valuable insight we can use to grow our business.

Secondary Research

Secondary research consists of all the data that has already been released for the public. It exists whether you’re conducting your research or not because it’s general information. This kind of research includes accounting records, customer records, publications, online articles, and anything else you can find at-hand or online.

Internal:

Internal secondary research includes all the information about your business and your customers that you already have (whether you realize it or not). It’s cost-effective (because you already own it) and relevant to your business (for the same reason). Your sales files, consumer interactions, website clicks, and social media data are all part of your internal secondary research. Everything you need is already at your disposal; all you need to do is comb through it to see which ones are the most useful for you and your endeavors.

External:

External secondary research is all about the information you have outside of your business. It can be free, such as from a government census, or paid, like with special reports. Think of articles, newsletters, journals, and other forms of information you can find online. Although this kind of research doesn’t specifically apply to only your business, it is very useful when understanding the market and industry you’re in as a whole. Discovering market trends, finding information about your competitors, and analyzing consumer attitudes are all part of this kind of research. The best part? All this information is right at your fingertips with just a simple search and a click of a button. Whenever you’re looking up information about your industry, you’re conducting external secondary research.

Whew, what a ride! I know we went over a lot of new key terms and phrases, so it’s okay if you’re having trouble differentiating the different types of research right now. The most important thing to take away is this: market research should become your new best friend. Being a business owner is all about learning, growing, and adapting, and conducting research is part of all of these processes. Take your time to really understand it all, and before you know it, you’ll be conducting market research like a pro.

If you want to read more about Barbie’s journey as a small business owner, check out the rest of her page at barbiepatel.com. Or if you want to learn about her Indian bridal makeup and hair services, visit her website at cinderellabridez.com.