Market research is not just for big businesses and it does not need to be expensive. In fact, with reduced budgets and restricted resources, smaller companies may have even more to gain.
Research can identify demand for your good or service before it launches, it can help you understand your customer – what motivates them and engenders their loyalty – and it could save you money in the long run.
Market research is a hot button topic right now. This week, Market Research Society (MRS) launched a new website for small and medium sized enterprises (SMEs) – Research_for small business – to demonstrate the value of market research for smaller companies and provide them with support and expert advice when getting started.
No matter whether you are starting a business or running an established one, there is no excuse for not researching your target market. Knowing who is buying your products and how this changes over time will help you maintain an increase in sales.
Your marketing strategy, as any graduate with a marketing diploma will tell you, is the overarching plan that will drive your business forward. It will be the plan that sets out who is doing what, what tweets and updates will be posted when, the design of the leaflets, the timing of press releases and more.
But this marketing strategy needs to be based on solid footings – and this means understanding if there is a demand for your products, goods and services, who your customers are, where they are and why they would look to buy from you, as opposed to a competitor.
Market research improves your branding
If you don’t quite have a handle on your brand, you need to ask yourself some questions – how do your customers perceive you? How does your brand stand alongside your competitors?
Market research can be used to improve your branding by exploring subjects such as:
- Personification: What characteristics do customers associate with your brand?
- Brand awareness: Are customers are of your brand? How familiar are they with it?
- Comparison: How does your brand compare to that of your main competitors?
You can seek the opinion of your customers on a wide variety of topics, such as the appeal of your website, what they think of the ordering process or your customer service. The more information you have, the better changes and improvements you can make.
You can understand your customers better
You will no doubt understand the need to know who your customers are. When you started your business, you probably gathered this information. But, are your customers today the same people as they were last week, last year or ten years ago?
It is common for the customer demographic of a business to change over the years and this is why market research will help to understand your customer demographic better.
Knowing who is buying your products (and who isn’t) will help you target your marketing better. Can you create a customer profile from the information you already know about your customers? If you can’t, you really need to update this knowledge.
Promotes improved marketing effectiveness
You invest a lot of time, money and effort into creating marketing campaigns that you ‘hope’ will work.
But ‘hoping’ isn’t enough and shouldn’t be the basis of any marketing campaign. We touched on this in the previous point about knowing who your customers are.
That’s only part of the equation. You also need to gauge their response to your current marketing campaign. How well received was it? Did your customers react well to the marketing message, if at all?
By understanding how customers react to a campaign, you can build these ideas into future marketing and promotional campaigns, improving their reach, engagement and effectiveness.
Market research can identify new opportunities
Expanding and growing your business is essential to survival and market research can provide the information you need to expand into new areas.
For example, if you have a new product lined up, you can test market readiness with market research. Or, if you are expanding into a new geographical location, you can use market research as the basis for whether this happens or not, what the opportunities and threats are.
You can analyse market size, demographics, key competitors and information on the local area, to name just a few pieces of information you may need.
Improve product features
Have you noticed how some businesses release a product, run with it for a while and then release a new and improved version?
This all comes from market research. This is because the brand has taken the time to gauge the response to their product and what the customer feedback is on what needs to change. This is a great way to keep evolving.
Market research allows you to connect with your customers, being genuinely interested in their feedback and using this information to make the changes that improve your business.
Case study: Emma Williams of Credas discusses how her ID verification company went about conducting research to learn about the specific pain points of her target market.
Credas launched in May 2017 and provides a simple, quick and secure way of verifying someone’s identity using real-time facial recognition technology.
While it was tempting to go after every market, we identified one fundamental gap within the property market.
In June 2017, it became a legal requirement for estate agents to verify the identity of both the seller and buyer in a property transaction, as part of the Anti-Money Laundering (AML) Fourth Directive. If an agent fails to comply with the new legislation, they put their business at risk of substantial fines, of up to €5 million or up to 10 per cent of their annual turnover.
This adds a real administrative burden for estate agents, who must track down the client, and ensure they check that the document is authentic. We also knew that the way that estate agents stored these documents would be under further scrutiny after May 2018, with the introduction of GDPR.
We knew our tech could allow estate agents to quickly and safely comply with the AML regulation in real-time, but we needed to understand how the industry felt about these requirements before we started speaking to them; ie, did they understand the changes? What were the key challenges?
We wanted to capture as much real-life examples of the pain points estate agents are experiencing as possible and thought the best way to get this would be via an anonymous survey.
Using an independent agency for online research
We decided to use online research to answer these questions. We recruited a sample of 100 estate agents through an independent agency to find out how they were managing the AML process currently.
The research came back in two weeks and showed that many businesses in the property sector felt overwhelmed by the latest anti-money laundering requirements or didn’t have the resource to be compliant.
We found that anti-money laundering checks were taking an average of 2.25 hours per property listing, with one of the main barriers to completion being cited as getting hold of clients to verify their ID documents.
“We needed to ensure that the research agency we used was reputable”
From this, we were then able to estimate that if the process was streamlined using our tech, it could save businesses an average of 312 hours a month which gave us the basis of our campaign.
As a small business, our budgets are tight so research seemed like a big expense at the time but we shopped around before deciding which way to go.
Due to the nature of our business, we needed to ensure that the research agency we used was reputable, such as OnePoll. By doing this we ensured that the data and research would hold under scrutiny. We would recommend researching and connecting with an agency that suits your business requirements.
We also tried to think of ways to use the research once it had been done, so as well as helping us define our product proposition, we also developed a PR campaign from the data and used a number of the stats on social media.
Case study: Simon Wadsworth of reputation management company Igniyte discusses how his company undertook key research on how negative content online can damage businesses.
In 2009, Google was starting to monopolise search, but not many companies were specifically monitoring or actively doing anything about their page one search results. Igniyte was formed to help them do this using specialist tools, SEO and best practice, dealing with negative results and promoting a positive online reputation.
The company works with high-profile individuals, businesses and brands and provides expert comment/advice regularly in specialist and national media.
Igniyte regularly receives enquiries from brands seeking help dealing with negative content online. We wanted to understand the scale of the problem; how it was impacting the finances and reputations of UK businesses in 2018 and how we could help.
Utilising market research
We have used research before to great effect. The results of a 2014 survey informed new services and triggered national media conversations.
For this project, Igniyte developed questions to see how things had evolved and commissioned market researchers OnePoll to survey 500 business owners, decision makers, strategists and marketers on our behalf.
These results help shape the services we offer and provide valuable insights to SMEs.
Five tips for effective market research
- Preparation is crucial when you undertake market research. Think backwards; what are the kind of findings you are looking for?
- Good questions are key to gaining relevant insights. Spend time refining/testing to make sure responses will be relevant
- Think about your audience and ensure a large enough sample to be truly reflective
- Choose a credible researcher such as OnePoll – to help guarantee breadth and segmentation
- Once data is collated, plan time to review results; capturing trends/insights and then act on them.