How to do Market Research in 7 Steps Do you know about the world-changing Amazon market research strategy of 2012? Few do, yet it influences millions […] The post <strong>How to do Market Research in 7 Steps</strong> appeared first...
How to do Market Research in 7 Steps
Do you know about the world-changing Amazon market research strategy of 2012?
Few do, yet it influences millions of people’s daily purchasing decisions.
Many of those who were part of it got very rich. And most had zero business or sales experience!
Its simplicity was brilliant.
I’ll tell you about it and give you 7 actionable steps on how to do market research that works for every business, regardless of size.
And explain why your market research could be the secret to your success.
How market research changed how we shop
Two guys, Jason Katzenback and Matt Clark created an Amazon-based marketing and sales strategy called the Amazing Selling Machine that forever changed how we make our shopping decisions, and it ran on market research. Here’s how it worked:
You chose a category, found a popular and profitable product, researched the major competitor’s negative reviews, and then used them to create a better alternative.
Most, if not all, of the page-one products you see on Amazon today are there because of this strategy!
The key was the better your market research, the more profit you made. And the same is true for businesses in most markets, off and online.
Now, let’s dive in and discover how market research works for you:
What is market research?
Market research illuminates what we don’t know, removing the uncertainty of the unknown by blending economic trends and consumer behavior to validate your business idea.
And it does it by asking questions like:
Most people buy stuff or services to solve their problems and improve their lives. Market research identifies who those people are and their concerns by analyzing data that define their needs and demographics. Providing accurate, reliable, up-to-date information you can use to design the perfect sales and marketing strategy for your business.
In short, market research removes the uncertainty of the unknown, helping you create a product/service that a specific group of people needs, which in turn reduces the risk when starting a business.
Why is market research essential when planning a new business?
People made tens of millions of dollars on Amazon because they knew their customers’ needs, what to sell, and how to advertise it.
The market research was so powerful it was like shooting fish in a barrel.
Author and marketer, Mike Gospe’s quote, also explains why market research is essential-
“Whoever understands the customer best wins.”
And while the 2012 opportunity on Amazon was unique to that platform, market research applies to every business setting.
It helps you:
Market research empowers you to identify opportunities, avoid pitfalls, understand your competitor’s strengths and weaknesses, and make informed decisions on product development. Saving you from investing in a business idea that might not work because of a lack of demand for what you offer or where you’re offering it. This is essential especially now, and for anyone considering the best business to start in a recession.
How to find your competitors
Your direct competitors provide a similar service to your target audience and engage them using identical marketing strategies, like a website, social media, and local business listings.
Here’s how you find them:
When you find your competitors, study their websites and social media platforms to see which services they offer, their marketing strategies, pricing, how they engage their audience, and why they’re successful.
Reading their recent reviews, you can see what’s unique about their work. Then use this information to design your service.
Types of market research
Before diving into the different market research types, you need to know that they fall into 2 categories, primary and secondary.
Primary research involves collecting original data through surveys, focus groups, and interviews. This type of research is often time-consuming and costly, but it can provide more in-depth and accurate results.
Secondary research involves gathering data that others have already collected and published, such as industry reports, government statistics, and online databases.
While secondary research may be less specific and current than primary research, it’s often more cost-effective and efficient, making it a viable choice for small to medium businesses on a budget.
Okay, here are the most common market research methods:
Surveys
Surveys are a fast way to gather large amounts of data and work by asking respondents a short series of open or closed questions. You can do them online, by phone, or in person.
They’re easy and inexpensive to run, and the results are straightforward to analyze.
Focus groups
Involve a small group of carefully selected people to test your product or service, which answer specific questions or provide open feedback.
Focus groups are great for gathering in-depth insights and exploring different perspectives about your product or service.
Interviews
Allow you to ask detailed questions, observe body language, and follow up on responses to discover what your intended market wants and thinks. And you can hold them one-on-one or in a group setting.
Interviews are perfect for creating a buyer’s persona around your target audience’s gender, age, location, family size, job title, budget, likes/dislikes, and buying habits.
Product/service use research
Product or service research is discovering what people think about your product or service and their features.
Usability testing research tells you why and how your target audience uses your product/service and which features are most helpful. Giving you insights into what your ideal clients like most about them or, sometimes, dislike.
Observation-based research
With this market research approach, you observe how your target audience uses your product or service. Noting their user experience (UX) to determine which parts work and where the user has problems. Helping you to improve your product’s/service’s functionality.
Buyer persona research
Your buyer persona research is about identifying the people that make up your target audience to discover their challenges, why they need your product or service, and what they want from your brand.
Market segmentation research
You categorize your target audience into different groups based on defining characters to understand their pain points better and determine how to meet their needs effectively.
Pricing research
This helps you know your competitors’ price points for products or services like yours. It enables you to charge what your target audience expects and is willing to pay ensuring they see your brand as an attractive option.
Competitive analysis
You need this market research to know who you’re competing with and the level of competition within your market. The results can give insights into what products or services are hot and which competitors you can beat or avoid.
A competitive analysis is also how you identify your competitor’s weaknesses and improve your USP (unique sales proposition) to separate yourself from the crowd.
Customer satisfaction and loyalty research
It’s about researching your current customers to find out what they love about your business, what satisfies them most, and which strategies best encourage them to become repeat ones.
Some customer satisfaction guarantors include rewards, loyalty programs, great products, or exemplary customer service.
Brand awareness research
Here’s where you discover what people know, recognize, or think about your brand.
Brand awareness research is crucial as it highlights the consumer’s perception of your brand, like what you believe in and stand for and what associations they make when they think of you.
Now let’s look at how you put those marketing strategies into action:
Steps for conducting market research
The following steps of your market research will help you get to know your target audience and what they want from a business like yours. And uncover crucial information about your ideal clients, such as their age, wealth, family situation, interests, needs, and buying habits.
And when you bring those together, you’ll have invaluable insights that can help create a thriving business.
1. Define your research objectives
There are many reasons to conduct market research, such as to create new opportunities, assess business threats, and look at past problems to avoid repeating them.
But the first question you must answer is whether your market research is for internal or external use.
Internal use is for you and your business, while external is for others outside your business. The purpose of internal use could be to streamline your business operations and improve cash flow. In contrast, external use could convince lenders to provide a business loan.
Research for external use is often extensive and time-consuming. Internal requires less data, and you can do it with less experience.
With that question answered next, define which elements of your business you’re researching and why.
Research areas could be:
Once you have the why your next step is to define who.
2. Determine your target audience
Here’s where you identify your target market to ensure your business idea meets their needs.
There are many external ways to research your target audience, and we’ll look at some later. But there’s a way you can do it right now; try this strategy out:
Imagine you’ve started your business and are yet to make a sale. Then your shop door opens, or someone lands on your sales platform. They need what you sell; your business idea solves their problem, and they buy your solution.
Do you see them?
What do they look like? Can you describe them??
That person is your target audience.
Now, your business might have several target audiences; each could have different reasons to use your products or services. But they’ll have common traits such as demographics like age, income level, location, or gender. Or it could be psychographic traits, such as similar interests or likes and dislikes.
Your goal is to identify each group, known as market segmentation, to create marketing campaigns for each.
And for your market research purposes, choose your research methods and arrange your questions to suit.
I’ll explain why next:
3. Choose your market research methods
You can use many methods to conduct market research, including surveys, interviews, focus groups, online questionnaire research, and observation.
Which you choose depends on 3 factors:
For new business owners, a broad approach is often best. Using strategies like surveys or focus groups to balance quality and quantity at an affordable cost.
4. Prepare your research questions
To get the best from market research conversations, you must prepare by creating a discussion guide that’ll help you control the session and maximize the results.
A discussion guide contains the topics and questions you want to discuss with participants throughout the interview.
The outline can include an introduction, some easy warm-up questions, product- or service-specific exploratory questions, and a debrief. Each section should be natural and conversational, with open-ended questions and time allotments.
How to design your discussion guide:
Define your goals, research questions, and hypotheses
Think about what you want to learn. What you’ll do with the feedback you get? What problem you’ll solve for your customers?
Also, have a testable hypothesis to use in your research. It helps create your discussion guide with structure, use test scenarios, and get feedback on your product/service designs and functionality.
Put your guide into critical sections, each with a unique purpose
Each unique area (intro, warm-up, specific, and debrief) ensures you answer all the essential questions you formed when defining your goals.
Ask for feedback
Your research is all about feedback, including your research sessions!
Ask interviewees about their experiences and other thoughts to help improve your future research sessions. This feedback could also illuminate areas you hadn’t considered, leading to further discussions and enlightenment.
The open-ended question rule!
The golden rule in marketing research is to ask open-ended questions to avoid “leading your interviewees” or getting the dreaded one-word answers.
Also, when you ask yes or no questions, you might sway their opinion with your conclusion.
5. List your primary competitors
To analyze your market thoroughly, you must research the other businesses in your field to see what they’re offering, who they’re targeting with their marketing efforts, their location, and their advantages/disadvantages in the marketplace.
To identify your competitors, choose a handful of industry search terms relevant to your business idea, then use them online to build a list of your competitors.
For example: A landscaping business could use search terms like “landscape service” but also other search terms like “garden service” or “garden maintenance,” etc.
List in hand, now Google them
Record any websites using your industry terms, then compare them against your target audience’s needs and demographics.
The aim is to see which competitors are the most likely to attract and convert your ideal clients via Google before you do. Because if Google’s promoting its website for your industry-relevant search terms, they’re your direct competitors.
Once you have your list next, determine each competitor’s strengths and weaknesses using a (SWOT analysis) to answer questions like:
SWOT analysis complete, rank them from most to least threatening, and determine your start-up’s marketing position and advantages in comparison.
6. Document your findings
Your 2nd last step is to document your market research findings. How you’ll report them depends on why you need them.
For instance, market research for internal use and only seen by you or your business partners can be informal.
However, if you need investors, you should write it as a formal market analysis and include a business plan.
But before doing either, you must organize your findings into different sections, so it’s easier to document. Areas could consist of your competitors, target audience, product/service development, and purpose.
Some things to consider in your findings, especially if using them to gain funding:
7. Put your analysis into action
Once you’ve analyzed your data, it’s time to put it to use. Use your findings to inform business decisions, such as product development, marketing strategies, and customer service improvements.
If it’s internal, consider how you can implement your findings to improve your business, such as making your sales process more efficient or customer care more attentive.
For external, now prepare yourself to talk with those lenders about your research results and conclusions.
Finally, revisit and update your market research analysis to see where you can tweak and improve your business as it grows.
Conclusion
The main takeaway is the more time and effort you put into market research now, the better you`ll benefit from it in the future.
And remember, every successful business began not knowing exactly where it was going. And got to where it is today because of yesterday`s market research.
Albert Einstein said this:
“If we knew what we’re doing, it wouldn’t be called research.”
My advice is not to let the thoughts of market research overwhelm you. Choose a strategy that suits your business, style, and resources, then take it from there.
Happy researching; the results might surprise you!
This portion of our website is for informational purposes only. The content is not legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information as well as has not been evaluated the accuracy and/or completeness of the information.
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