10 December 2020
Why is market research important? Simple, it gives you access to information you can use to make better business decisions.
By identifying and analyzing the market needs of your customers, your business will be in a better position to deliver customer satisfaction and research shows that 55% of consumers are willing to pay more for a guaranteed good experience.
Perhaps you are launching a new product or trying to improve your existing services. Maybe you are looking to stay ahead of your competitors or you want to focus on a new marketplace in the UK or overseas? It is data gathered through market research that will help you accomplish these goals, yet for many, the whole area of market research can appear daunting – just where do you start?
So here are 8 reasons why we think market research is important and how it can be used to help grow your business.
#1 Understanding your Customers
There has been a shift from product-based to customer-based campaigns and the customer experience has become a key branding opportunity. As a result, the understanding of your customers has become an essential component of market research and some of the questions that can be answered might include:
– Who will likely buy your products?
– What do they expect from your business?
– How often might they buy your products?
– What are their needs?
– How much are they prepared to pay?
Finding answers to these questions will give you a better understanding of your existing market.
Creating profiles or personas that represent your ideal customer can help you understand what their buying triggers are. Valuable data to gather might include information such as job role, demographic, business activity, interests, and behavioural traits. Using buying history to make targeted offers plays a key role in retaining existing customers, but can also help in your understanding of what might appeal to new business leads.
The key to using this data effectively will be your understanding of the persona goals, pain points and buying patterns. Awareness of these buyer personas should play an active role in driving your content creation, product development, sales follow up, and all aspects of customer acquisition and retention.
#2 Understand your Competitors
Aside from understanding customers, you need to understand your competitors. Appraising their activities and comparing them to your own will play a part in your success. You can monitor their presence and activities on social media using sales intelligence tools which can be both time-saving and effective.
Understanding your rival’s strengths and weaknesses will give you the opportunity to offer better, more targeted options to your potential customers.
Of course, it’s not always easy to acquire competitor market data, but metrics such as NPS can be gathered from consumers and social media rankings give some useful insight. You should also consider measuring your own business according to those same metrics, which will give you a benchmarked measure of your own business performance.
Review competitor websites and keep an eye on their marketing campaigns. If you can identify strategies that have proved successful (or not!), that may also be helpful when it comes to developing your own marketing strategy.
Doing your market research helps you stay ahead of your competitors, by allowing you to think more creatively and to form sales and marketing strategies with purpose. Whether you are focusing on a local or overseas marketplace, knowing the key players will help your understanding of how best to approach the market.
#3 Launching Tested Products
Whether you are launching a new product or service, you need to be as certain as you can of its likely success rate. This can be determined through product testing, which is the process of gathering feedback directly from customers or potential customers about a product or service.
This can be done through informal conversations, surveys, or gathered indirectly using click-thru data from online ads or website traffic. You can also gain useful insights into industry trends through keyword research. This can help you understand which search terms are being used that relate to your products or services.
Product testing can happen at any point of development from initial idea stages to the prototype to the finished product. This will help determine viability and gain a crucial outside perspective about your product or service. And yes, whilst this sort of market research takes time and money, it will undoubtedly be worth it, because there is little point in launching a product or service that no-one wants or even needs!
#4 Staying Relevant
Your business does not exist in a vacuum and to survive in a competitive global marketplace it is important to be flexible. Not least with the seismic and ongoing effects of the pandemic lockdown both locally and globally.
To stay relevant it is important to remain open-minded to customer feedback and as we have touched on previously, use customer interactions in the market to inform your product and sales processes, and even your company focus.
Get involved with next-generation projects within your industry and keep up-to-date on what’s trending in adjacent industries. Be prepared to learn something new.
Position your business as an authority in the industry and run tailored marketing and pricing campaigns. This will help attract higher-value visitors, leads, and customers to your business that you’ll be more likely to retain over time.
Market research works both ways. Your ultimate aim is to increase revenue streams and gain new customers, so you should promote your business, not just through your website but through global marketplaces too. This will increase the opportunity for buyers who are doing their own market research, to find your business and become a customer themselves.
#5 Significantly Reduce Risk
The idea that embracing risk will help your business is not one to be taken lightly, but diligent market research helps to mitigate that risk and any potential revenue loss that might result.
Using multiple sources to help with your market research will give you a more complete picture. Relying on the wrong information increases risk, so wherever relevant it is important to consider different points of view.
#6 Detailed Segmentation-Targeting-Positioning (STP)
This is a common strategic approach that allows you to develop marketing strategies and should be a customer-focused process rather than a product-focused one.
Targeting, segmentation and profiling through in-depth market research mean you can prioritize and engage with different audiences through customised marketing.
#7 Foster Better Decision Making
Market research arms you with accurate data that will help you make better-informed decisions and this encompasses customer satisfaction which is important to every business.
Acknowledging and doing something about customer dissatisfaction should be the aim of every company. It doesn’t pay to be blinkered to negative feedback, especially if it has been shared in an online public forum – that digital footprint doesn’t go away and disgruntled customer comments may prove to be the deciding factor in potential decision making.
# 8 Planning For The Future
Every business person regardless of their industry wants to grow their business and this can be achieved by listening to and meeting the needs of your customers.
Conducting meaningful market research takes out the guesswork and allows you to plan for the future. As an integral part of many business decisions, market research will help you analyze and better understand business threats, opportunities, and strengths, as well as lessen potential risks.
Why is Market Research Important? What’s Next For Your Business?
Understanding customer needs and wants through market research will undoubtedly give you the opportunity to grow your business. If you would like to see how Kompass can help whether that is researching new target markets or using sales intelligence to track competitor activity, then contact us today.
Disclaimer: Please note that this blog only contains general information and insights about legal matters. The information is not advice, and should not be treated as such. Kompass.com