When you’re running a business and have direct contact with your customers, discovering their preferences, buying habits and future needs. But this kind of informal data is risky to use for the basis of major business decisions. Before launches, pivots or expansions, businesses of all sizes should conduct a more formal level of market research. Here’s a few tips on how to make market research work for YOUR organization.
Answers Some Basic Questions
Follow the US Small Business Administration’s checklist (page 8) to answer some basic questions about your business and its place in the competitive landscape. Examples: “Who are my customers and prospects?”, “Do they see my pricepoint as a good value?”, ‘How do we compare to our competition?”. Many of these can be answered internally or through some basic qualitative research with your current clientele.
Understand Your Position in the Market
Market size tells organizations how they are doing. Measuring market size nationally is easier than at local levels. The federal US government reports on county-level research via their County Business Patterns (CPB) reports.
To conduct your own local research about market structure and brand opinions, telephone surveying is the method most likely to yield accurate results. It can be difficult to launch yourself, but remember that we can connect you with one of our clients who can assist with some local phone research.
Understand Your Market’s Concentration
Market concentration is important to understand. It can be measured by creating a list of competitors, sorting them by sales, and then adding up the market shares of the top 3-5. If these few companies have a high percentage of total market sales, you’re in a highly concentrated industry.
Conduct Product Research
The best product launches are always supported by research. Testing products before wide release will help you rationalize the best design, positioning, packaging, name, and marketing positioning. Be sure to systematize the process – record and analyze respondents’ opinions and deploy a scientific methodology. Scientific product testing follows a pattern: pre-trial (choosing respondents, designing questionnaires), trial (observing reactions), and post-trial (analyzing results).
Conduct Consumer Opinion Research
A/B Testing in stores is a good way to get reactions from the customers already familiar with your brand. Mount two very different product displays and then conduct face-to-face surveys that ask customers some simple questions about which they prefer.
You can also gauge the opinion of your non-customers through online surveys. While not as scientific as in-person or phone surveys, online surveys are a lower-cost way to do market research about whether an idea or a product will be appealing to consumers.
Get Started Today
Organizations that conduct scientific market research and regularly focus on data collection are leading the way in the industry. Market research can be motivated by internal forces (declining sales or a new product technology) or external forces beyond your control (new laws, or a new competitor). C-level executives need support before they make decisions to drive or pivot the future of an organization. While market research may only confirm management’s assumptions, the findings can help drive the company in a new direction with confidence.
Ready to get started? Pull ahead of your competition and make some educated marketing decisions today. We can help!