To succeed as a small business, you need a solid understanding of the industry you’re operating within, the customers you’re targeting, and the competitors you share a market with. With that in mind, market research is a hugely valuable process for businesses of any size.
You may be passionate and knowledgeable about the product or service you sell and the industry you work in, but market research offers deeper, data-driven insights into the market that can help you identify potential weaknesses or limitations, discover new opportunities, and define your approach as a business.
Understanding the market means understanding what your customers want and need and how best to reach them, and doing so is essential if you want true success.
What is market research used for?
There are a lot of cases where market research becomes vital for small businesses – it’s not just when you first open shop.
You might consider conducting market research if you’re targeting expansion and are interested in exploring new markets with your existing business. Perhaps you’re thinking of launching a new product or service, and you need to see if it’s really viable before you get too far into the process. You might be seeking new investors or partners and you need a better idea of the current landscape to help shape your approach.
Wherever you are as a business, market research is a way to remove the guesswork and gain an understanding of your business environment that’s grounded in data.
Market research methods and strategies
How you approach market research will depend on your goals and budget. While aspects of market research can be done in-house and cost-free, the most effective methods do require a bit of spending, which is certainly worthwhile considering the benefits. There are plenty of market research companies who can guide you with specialized tools and resources to facilitate the process.
Below are some of the most common and reliable types of market research used by small businesses:
To understand the landscape of your market, you need to know who is already doing well in it, and why they’re doing well. Competitor analysis and benchmarking is the best way to do this.
Once you have an idea of who your main competitors are, you can start to explore what it is that makes them your main competitors. How do they interact with customers? How do they approach branding and design? What sets them apart, and on the other end, what commonalities can you identify across all competitors in the market? Think about every angle, from pricing to customer service to social media presence, and beyond.
Understanding what works and what doesn’t for other businesses succeeding in your market can help you identify gaps to capitalize on. You might find through competitor analysis that the market is already saturated, or you might discover an innovative approach that competitors have yet to tap into.
You can get a good idea of the market, how it operates, and how customers interact with it simply by monitoring and evaluating what you see on social media. Of course, it helps to look a little deeper and take a data-driven approach to find out what’s trending and how consumers interact with brands online, and there are plenty of market research tools that are designed for social media analysis.
Social media provides important insights as it can offer the most genuine, raw perspective of consumers. While surveys and questionnaires are prompted and guided by the researcher, monitoring social media offers a huge amount of unfiltered, valuable information.
Surveys are a great way to reach a wider audience, especially when conducted online, and they’re useful when you have specific topics or ideas who want to explore. Many survey companies incentivize participation, which encourages more engagement, in turn giving you a broader perspective on behaviors within the market.
You can tailor surveys to target specific customer personas based on attributes like age, gender, location or otherwise, which can help you conduct more specific or nuanced market research.
Setting up focus groups helps you gain insight in a more interactive, personalized way, compared to questionnaires and surveys. Having a more natural conversation may help you identify factors that you may have missed by asking questions in a survey. Focus groups also allow for interaction between participants – which can uncover further insights.
A simple, cost-effective approach to market research could simply be simply analyzing what consumers are searching for online. Google has a suite of comprehensive analytics tools that offer insights on how people interact in the digital marketplace.
You can conduct keyword research and analysis to understand how to shape your online presence and content output to best serve your desired audience and their online behavior. You might be able to find less competitive opportunities within your market, or discover new and emerging trends that you can take advantage of. You might also find that there’s a way to approach your marketing that better aligns with what customers search for online, or a more opportune way to shape your brand.
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