If you have ever driven across town with no GPS, and only a vague idea of where your destination might be, then you have a pretty good idea of what it is like to run a business without market research. Market research tells you everything you need to know en route to your business destination. Any startup– even seasoned businesses have conducted business marketing strategy research. If you want to learn how to conduct market research, this guide will serve as a roadmap.
1. Clearly Establish Goals
Before you even begin brainstorming your methods, you will first want to establish the purpose of the market research. Be specific. Write down the mission statement, consisting of what you hope to learn, the demographics you need to research, and why you want to conduct this research. The reasons may vary, and the research often results in unexpected findings that require further digging. That's to be expected. At the beginning, however, if you want to know how to conduct market research effectively, you will need to have goals in mind.
2. Conduct Secondary Research
Secondary research uses existing published data, which can be found online or in print journals. Trade association, university journals, and government websites are great places to learn more about your industry, demographic trends, and other business and economic data. The US small business administration website has a full list of published data that is available to business owners and developers. If you want to know how to conduct market research quickly from several sources, SBA.gov is a great place to start.
3. Create a List of Questions
Once you have a background knowledge of the industry and trends that may affect your business, it is time to embark on phase two of the market research strategy. The one downside to secondary research is that the information may be outdated by the time it gets published. This is especially true in fast-moving fields like the internet or fashion industry. That is why you should never rely on that data alone and should ask people directly what they think.
It is important to take that information and analyze how it may affect your business. You then need to come up with a list of questions you would like to ask your customers based on the things you have read and researched, as well as any other things you may have thought of while doing business within your field. The questions may be unique to your business model, but some apply to almost anyone.
- What are some things that frustrate you when …?
- What do you like best about …?
- If I created a product that would solve (X) would you buy it?
- How do you like to keep in touch with your favorite retailers, restaurants, etc?
- If you could change anything about your last experience with (X) what would you change?
4. Talk to People!
Once you have your questions, it is time to start asking them. There are several ways you can go about this step, which is also known as conducting primary research.
- Ask Surveys;
- Create Focus Groups;
- Ask 1:1 Interviews;
- Conduct Product Tests.
Surveys are a great way to get your questions answered by a large group of people in a short amount of time. Focus groups are more concentrated, but can give a detailed understanding of a specific demographic. A 1:1 interview is more intimate than a survey, and gives more detail. However, it does tend to take a lot of time. Product tests are especially useful if you are going to be selling a new product and want to see what people think of it.
The other caveat when conducting primary research is to not limit yourself to people you already know or those who are already shopping at your store. If you only speak to those who already are aware of what you have to offer, you will miss out on the possibly groundbreaking perspective of a complete stranger who has never known you before today.
5. Analyze the Competition
After studying the general data, speaking with your potential customers, and getting a read on what they like and dislike, it is time to do a little scoping out of the competition. To learn how to conduct market research on the competition, again, you start with questions. How do they advertise? What appears to be their biggest demographic? How do they reach their customers? What appear to be their strengths and weaknesses?
These questions matter because your business is not being opened in a vacuum. Your potential customers are already shopping somewhere; if you want them to change, you first must understand why they do it.
6. Assemble the Answers
You may spend months learning how to conduct market research, and gather lots of data. Once you feel you have enough to get started, a SWOT analysis (strengths, weaknesses, opportunities, threats) lets you see the patterns and how you can improve. If you are doing this for someone else's business, a SWOT analysis makes it easy to describe results and determine the best course of action. Numerical data can be made into a graph. Regardless of what method you choose, before you put your market research into action, it helps to have a strong visual.
7. Use Your Market Research
The time and money spent on market research is a major investment, but now it must be utilized. By taking the data and plugging it into your business model, you will see the results in better client relations, sales, and possibly even newcomers walking in your door or visiting your website. Many of the earlier questions may be answered, and you probably asked some new ones along the way.
Now that you have learned how to conduct market research, it is time to let your business grow to its true potential. All you have to do is ask the right questions and find the answers.
What have been your experiences with market research? Do you have any other tips you'd like to share? Feel free to weigh in and share your stories.