At a training workshop on understanding the how’s and why’s of doing market research, participants were asked what first comes to mind when asked what market research is. Interestingly, doing survey is the dominating definition that most of the attendees can come up with. Fair enough. However, market research is not only about surveys. Old school defines it as the systematic gathering and interpretation of information, which sounds more like archiving what is already known, and that’s not what we need. Hence, traditional market research is dead. What market research really is today is gathering data and using such information to create new knowledge and solutions to address the WHY’s and WHAT’S NEXT’s in business.
And because of the long, tedious and costly work associated with doing market research, even research agencies nowadays are trying to avoid using those terms. In fact, even successful enterpreneurs themselves claim that it’s unnecessary and that they don’t do it. But in fact, every successful business does market research. The act is just in disguise behind the words customer insights (to mean market research), campaigns (instead of saying research) or audience (to mean sample). Market research or no matter how you would call it these days is a MUST for every business, regardless of size, to survive and thrive. Upcoming are 10 benefits of doing market research. Hence, they are also your 10 loses if you neglect this essential step in setting up your own business.
- It connects you with your target customers.The more you demonstrate how well you understand your customer behavior, lifestyle and preferences are, the more you can communicate with them on a personal level. With such connection, the more you’ll gain a longer span of their attention (something that is too difficult to achieve these days due to the internet of things). Knowing what your target customers need and want can also help you determine right content or messages in your marketing and promotional materials. Most importantly, the data and insights you’ve gathered about customer preferences are solid grounds for building your product and/or service portfolio.
- It helps you identify opportunities for business growth. Having an in-depth understanding of your existing competitors and what they have to offer and how different your products and services are from your competitors makes it easier for you to identify which business strategy woks best for you and as to which product or service features do you need to strengthen and develop so you can stand out against your competitors. Knowing where you are and where you are going also helps in managing your time and limited resources. For example, there are just so many networking events out there but with specific goals and focus in mind, you can easily pinpoint whether such networking or training events are something that could help you move forward.
- It’s your manual for projecting costs and sales reasonably. Knowing how much your competitors price similar products/ services, how much your target customers’ are willing to pay, and all the necessary costs incurred when delivering quality products and services, you can estimate the right pricing reasonable for your customers to pay and for you to deliver. You don’t end up guessing and coming up with ridiculously low or high prices!
- It’s a proven guide when developing your product or services.When you go out there and really ask your target customers what they want or need, you’ll be surprised to see how your assumptions have gone wrong. There are features that they would wish would be there but aren’t, and these feedback serve as your guide in determining which of part of your offerings need development or even which features are most likely not needed.
- It’s your compass.When making decisions in every aspect of your business, the data you’ve gathered and analyzed serve as your compass on which direction and options to choose. Going with your gut is a great strategy – unless you are making a high-stakes decision that will affect your business and brand. With research to back you up, you can make decisions more confidently, whether you want to open a second location or invest in new technology.
“What market research really is today is gathering data and using such information to create new knowledge and solutions to address the WHY’s and WHAT’S NEXT’s in business.
- It helps you to minimize risks.You may think you have come up with the greatest idea that no one has ever figured out before, but most likely after conducting a thorough research, you’ll actually figure out that your someone has already thought of the same thing and the business is already up there and running. With knowledge, you can definitely minimize your risks of potentially investing too much of your resources (e.g. time, effort, money) and having no to less return of investment.
- It makes you an expert in your area of business.Having a vast amount of research-based knowledgebase of your customer behaviour, lifestyle and preferences enables you to early develop product features accordingly as well as get rid of what’s not necessary. This capability brings you a step ahead your competitors. It gives you more credibility, and therefore, makes you not only an expert in what you do but also as an expert to go for other business owners in similar fields.
- It helps you create benchmarking tool to monitor your progress. How well are you doing? By setting the standard high from the start, you will be in a better position for sustained growth. Benchmarking is comparing your process and performance metrics to industry bests or best practices from other companies or businesses.
- It serves as your tracking device to monitor competitions. By knowing what your competition offers, who their target audience is, what is working for them and the marketing strategies they use, you can use such information to help you differentiate your business. You can offer products or services that solves a problem and that your competition missed to address. Borrow some marketing techniques that work for them or could also offer similar promotions, but drop those that don’t generate a lot of engagement.
- .It gives you power to set industry standards (and predicts trends). With data comes knowledge. With knowledge comes insight and with insight comes the ability to make better decisions, predict trends and set industry standards.
The more limited your resources are, the more you should consider doing research prior to entering the market and when your business is already up and running. It’s like a compass. Without it, business owners like you and me can end up in crossroads of guesstimations, which is like building a house on sandy grounds. If thriving businesses or big companies use market research to navigate them to the right business strategy, the right product/service specifications, the right target market and even the right goals, then shouldn’t you do the same?