We’ve had market research on the brain lately! A few weeks ago, we wrote about what market research is. Shortly thereafter, we wrote about how you can do market research cheaply and made a long list of questions you can ask your customers.
Now we’re going to talk about all the ways you can use market research to grow your small business! It’s time to put all the information you’ve painstakingly gathered to good use.
1. Research demand for new products or services before starting.
You know the easiest way to screw up in small business? Make something that nobody wants.
I know this sounds incredibly simplistic, but the truth is that it’s such an easy error to make. Market research lets you identify which opportunities you shouldn’t pursue so that you can focus on the ones that you should.
By conducting market research, you can get a sense of market demand before you waste time. You can identify products that are ideal for your target market, or that have, in other words, a good product-market fit.
2. Identify customers’ goals to see if there are needs not yet met.
Good marketing strategy has two major parts to it:
- Identify customers’ needs and meet them.
- Tell potential customers that you can meet their needs.
Consumer behavior is driven by needs, but not just basic needs like the need for food, water, and sleep. People have a need to feel confident, to feel intelligent, to feel like they have achieved something with their life, and so on.
This may seem heady and abstract, but when you actually ask customers questions through market research, you often find they have unmet needs. When this happens, you have the chance to make good products or services before your competition catches on!
3. Identify more niches in your industry.
One of the ways that market research can help you grow your business is by identifying needs that are not yet met. When your business finds a way to meet those unmet needs in a way that few others are doing, then you have found a new potential niche.
This is really valuable. Finding a unique niche helps you narrow down your business’s focus so you can do what you do best.
4. Create more compelling marketing materials.
Some businesses are phenomenal at creating products or providing services. However, their marketing messaging is lackluster, and thus, people either walk away without buying or simply never find them. It’s a shame!
Market research can help you identify which kinds of ads people respond to. It can help you polish your brand so that your business looks like what others expect, thus signaling your ability to meet potential customers’ needs. In short, using market research to figure out what others like or expect helps you play the part when it comes time to brand and promote your business.
5. Watch your competition and understanding their marketing strategies.
It’s no big secret that paying attention to your competition can make you richer. Often in the course of market research, you find out a lot about what your competition is doing.
You can learn about what they offer and their unique selling points. You can get a sense of how their business is positioned. Lastly, you can often figure out their marketing strategies just through simple observation. Knowing what your competition is doing allows you to respond in kind.
6. Watch your competition and understand their weaknesses.
Similar to the point above, you can figure out what your competition is not doing as well. This can often be as insightful if not more so than figuring out what they are doing.
Are their products expensive? Is their branding lackluster? Are they failing to engage their audience? Are they leaving important meets unmet? Market research helps provide answers to these questions.
7. Reduce risk of bad marketing plans.
It’s easier for customers to remember bad marketing campaigns than to remember good ones. Just think of the Quiznos ads that came out around 2004. (Though in their defense, “they got a pepper bar.”)
Above, we said that marketing basically has two goals:
- Identify customers’ needs and meet them.
- Tell potential customers that you can meet their needs.
That means a bad marketing plan either doesn’t meet needs or doesn’t effectively signal that a business can meet customers’ needs. In my personal experience, market research with customers helps you avoid the first error while observation of competition keeps you from repeating their expensive mistakes and making the second error.
8. Fix problems in your product or service before it’s too late.
Reviewing what customers say about you is a form of market research. For nearly any business, there is a place where online reviews can be found – social media, Yelp, Trustpilot, Google, Shopify, Rate My Professor…you get the idea.
The point is: read the reviews every once in a while. Keep doing what works, of course, but pay extra attention to the negative reviews. You might find out that some of your staff is rude. Perhaps your slow responses to emails are alienating clients. Whatever issues you find, take steps to address them.
9. Test products or services before release.
Remember how we said that the most egregious error a small business can make is to create a product or service that people don’t want? Oftentimes, this can happen not because the idea was poorly conceived, but rather just poorly executed.
One form of market research involves creating focus groups. This kind of market research provides you an excellent opportunity to test products or services before releasing them to the general public. That way, if there are issues, you can correct them before it’s too late.
10. Test branding and advertising on a small scale.
Similarly to the way that product and services can be testing, so can branding and advertising. You can do this by running advertisements or branding decisions across a group of people online or in-person.
In the case of digital marketing, you can also take out ads on a small scale or set up simple A/B testing. This lets you see how people will react to changes on a small scale before spending a lot of money.
11. Make improvements based on survey data.
One of the most popular forms of market research is collecting survey data. When you send out surveys to either current customers or potential ones, you can ask nearly any question you want. This means if you have specific questions you want to be answered, you can read real responses from people that you can take to heart. You can also ask open-ended questions if you want unprompted, unfiltered responses.
In both cases, you can aggregate survey data and find trends. When you spot a trend, you can start implementing the survey feedback.
12. Improve the effectiveness of social media.
Basically every social media channel creates an enormous amount of data that you can review. Facebook and Instagram both have Insights. Twitter has Analytics. The list goes on.
One of my favorite goals for social media is simply engagement, more so even than growth in many cases. Engagement includes comments as well as likes, views, clicks, and so on. To improve engagement, you can review your social media history and create more posts like the ones that performed the best.
13. Improve effectiveness of website.
Using market research as well as data from tools like Google Analytics, you can figure out how to improve the effectiveness of your website. If people are adding items to their cart but abandoning them without purchasing, you can use market research to figure out why that is and discourage that behavior.
Similarly, you can figure out where to place calls to action to get more sales or email signups. Market research can also help you figure out how to layout your website, which pages are most likely to get attention, and how to optimize for search engines.
This is particularly notable when you run an eCommerce business. Often small tweaks can turn a 2% conversion rate into a 3% conversion rate, which if you’re already established, is like putting money right into your pocket.
14. Catch on to industry trends early.
The act of market research alone forces you to get out of your shell and observe the outside world. Just through the simple act of researching alone, you become a lot more aware of industry trends in the making. This allows you to respond appropriately early on.
15. Improve customer retention.
Once your business is established, one of the easiest ways to improve your profitability is to improve customer retention. This could mean upselling, implementing a subscription-based model, or launching new but related products or services. It could also mean, as we mentioned earlier, finding breakdowns and fixing them so you don’t lose potential repeat customers.
Market research helps you identify both the weaknesses you need to correct and the opportunities you need to pursue. This makes it a lot easier to keep customers coming back for more.
Final Thoughts
As you can see, market research is not merely a bookish exercise. It has many practical applications! Market research data, like oil or timber, is a natural resource upon which you can build larger marketing strategies.
Used correctly, market research will allow you to identify needs, make sure your meeting them, and make you’re communicating value. The goals are simple but the benefits of applying market research well are profound.
