With the internet becoming more important for businesses every day, business owners are giving serious thoughts to investing in market research. The main reason is gathering valuable data that allows them to improve the process of decision making and set their operations on the right course.
The truth is that there’s so much you can learn from customer preferences, online behavior, purchasing habits, concept testing, ad testing, claims testing, exit-intent surveys, and customer satisfaction polls.
Your market is constantly changing, with information fluctuating all over the place. Doing research has become an integral part of any marketing strategy, almost becoming as popular as CRO, paid media, or SEO.
In other words, investing in market research opens a whole new world of opportunities. Doing this research is cheaper, faster, and quicker than ever. If you want to keep your business competitive and relevant, doing regular research of your market is necessary. Here are a couple of reasons why this research matters today.
It Helps Identify New Target Audiences
Modern businesses are required to find new potential customers to grow their operations. Since the internet is the most abundant source of information, it’s the best place to start your research journey.
To identify a new target audience, you first need to understand who your consumers are, their purchasing behavior, and key demographics. When your customers search for your services or products online, they have the following questions:
- How can your products/services help them?
- Who uses your products/services?
- What is the age range of your consumers?
- Are your customers mostly female or male?
- What is the average income level of your consumers?
- What is the geographical location of your customers?
These questions provide valuable answers that give insight into relevant factors of determining your new target audiences effectively. What you have to do is take time to understand these factors to use the data in the best way possible.
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It Allows You to Understand Your Existing Consumers
Just like you need time to understand the determining factors of identifying new target customers, you should also make an effort to understand your existing consumers, their needs, problems, wants, etc.
Again, it’s all about asking the right questions:
- How do your products/services help your customers?
- How do your products/services help your customers solve real-life problems?
- Why do your consumers choose you over your competition?
- How do they make their purchasing decision?
By analyzing the information you get by asking these questions, you get a basic understanding of how your customers make their decisions, their habits, preferences, behavior, etc.
Use that data to improve the way you present your products/services to them, improve interaction, and ensure that your consumers get the highest level of customer experience each time they interact with your business. This creates more opportunities to upsell and cross-sell.
Be Realistic with Your Business Goals
You can gather all the relevant and accurate data about your customers, new target audiences, competitors, and so on, but it won’t mean anything if your business goals aren’t realistic.
The only way to get ahead of your competition and keep your customers happy is by setting realistic and achievable goals. This is how you improve and grow your business operations.
Market research is an excellent way to see what your competitors have been up to, their way of doing things, etc.
Having unrealistic expectations from your business goals goes both ways. Sometimes we delay making moves due to having assumptions that the actions we’re considering are too risky. Market research helps us deal with these fears and assess if our goals are that risky, or we’re merely overthinking the situation.
The more facts we have, the more accurately we can assess our business goals’ upsides and downsides.
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Understanding Your Market Allows You to Develop Effective Marketing Strategies
Data that market research gives is an excellent foundation for enhancing your decision-making. You get information on potential opportunities, marketing mediums, distribution channels, and pricing, among many other things.
Use this data to identify the right moment to launch new offerings and cater to your existing customers. Expanding your operations is excellent, but you also have to think about your current activities. This is the right moment to think about the following things:
- Reduce or expand.
- How to diversify your current operations.
- Targeting the right audience with your marketing efforts.
Gather data and use it to adjust your marketing strategies to be more effective and according to your business needs and your customers.
Discover Your Strengths and Weaknesses
Every business has strengths and weaknesses, regardless of its size or success. The trick is to be aware of those challenges and know how to solve them.
Market research can help you discover both and determine the best course of action to address your sales, marketing, competition, etc.
Working in the online environment can be tricky as none of the salespeople working for the company come into direct contact with the customers. The closest we come to face-to-face situations are instant chats, and, in more complex customer support cases, Skype or Zoom calls. This is not enough to get a beat on customer profiles and their motivations and pain points.
In traditional B2C situations, this information is gathered through relationships that your employees crate with the customers, and working online doesn’t create these opportunities without extra effort.
Market research helps you put a face on these people and gives them a voice to communicate with you. All companies love customers who are passionate enough about their brand to be willing to share their opinions on making the brand better. This is invaluable to the brand’s future development, but it’s also essential to identify what makes your brand stand out in their eyes.
Quite often, brands make a mistake of going for changes that alienate their core customers without knowing it. Removing a feature or a service that attracted customers in the first place is the business equivalent of shooting yourself in the foot with your gun. The market research gives you an idea of where your brand fits in in the grand scheme of things, outlining the staples that make your brand a success.
These pillars can than be used to solidify the brand position and give it a steady platform for future growth and experimentation.
Accurate Data Can Help Prepare for Expanding to New Markets
Business expansion to new markets can make or break your business. It’s paramount that you be prepared for it, and the best way to prepare yourself is by getting the right data. This is where market research plays a vital role.
It tells you whether a new market is ready for your business. If your target market is currently overwhelmed, expanding to such a business landscape isn’t going to bring the wanted results.
That’s why market research matters so much as it tells you all you need to know about the market you want to expand to.
One of the biggest mistakes businesses make when moving into a new market is assuming that the strengths that created a foothold for them will initially work in the new market. Sometimes they will, but more often, this is not the case.
Market research doesn’t just give you a dry overview of the state of your future market and any competition currently operating there. It will also reveal any differences in the motivation and goals of the target audience you consider to be vital for you in the new market.
The same customer profiles may be quite different from market to market, making the assumption that a copy/paste approach will work quite dangerous and potentially bank-breaking.
Being that modern market research is done through data acquisition and analysis, you’ll be able to prop up your assumptions about the new market based on concrete, factual information. This gives organizations the ability to project plans and potential outcomes with greater accuracy and reduce the risk of losing money during the expansion.
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Market research is a worthy investment that isn’t reserved only for new startups and small businesses. Companies of all experiences, industries, scopes, sizes, and shapes all use market research to make their decisions and go about their daily operations.
Investing in such research allows business owners to solve problems, identify issues, learn about existing and new customers, beat their competition, and so much more.
More importantly, the data gathered from market research is one of the determining factors of your business success. It helps you discover new opportunities, keep your customers happy and competitors at bay.
This article is written by Mia Guthrie. Mia is a content marketer presently working with BackOffice Pro, a Business process outsourcing company. A writer by day and a reader by night, she loves working in the ever-changing world of digital marketing and is fascinated by the role content plays in today's marketing.