Market research provides businesses with valuable insights into their competitors, customers and industry trends. Do it well and you can spot new opportunities before others. You’ll also be better able to anticipate future trends and improve profitability. But where to get started? Five simple strategies can form the basis of your market research plan.
How to conduct effective market research
Most effective market research strategies don’t cost anything but time and labor. Others, however, may require spending some ad dollars or ponying up for a survey platform. All are worthwhile, however, for better understanding the market your business is in and the customers you want to reach. We specifically recommend the following research methods.
1. Develop buyer personas.
Buyer personas, also known as customer personas, give you a much more thorough understanding of your customers and who they are. They are essentially fictional creations based in reality — you imagine your ideal customer and build a realistic persona around them.
Market research tools can help you develop buyer personas based on your target customers’ interests, problems and lifestyles. The more personas you have, the better, as understanding why customers buy from you is perhaps the most valuable piece of information any business owner could have. Do they buy to meet a need or desire, address a problem, or exploit an opportunity to its fullest? Your marketers can zero in on this information to create advertising campaigns that generate inquiries by appealing to customers’ needs and wants. Likewise, this insight will help your sales team sell more and your development team iterate better in the future.
As you build buyer personas, harnessing demographic details like age, location, education level, parental status and income levels is very useful. These details can help you develop a communication style and tone of voice that connects with customers. An appreciation of cultural nuances, especially in a diverse country like America, can also benefit you through a better understanding of consumption patterns, attitudes, and product or service preferences.
Buyer personas can also shed light on the people, organizations and institutions that shape customers’ views and opinions. Take influencer marketing as an example. Partnering with an influencer your customers like and respect can generate a lot of sales. Identifying the influences, values and psychology of your audience can help you understand how emotions play a part in their decision-making. [Read related article: The Psychology of Sales]
2. Conduct a survey.
A problem that many new businesses face is they don’t have a lot of customer information to use for their own market research. To gather more information about the people who buy — or may buy — your product, consider adding a survey form to your website or sending a survey to email addresses you collect.
Surveys allow you to solicit feedback from prospective and existing customers. When you create a questionnaire, try to include a few questions with text boxes so respondents can type in their own answers. You want to solicit as much information as possible — without making your survey so overwhelming that people won’t want to take it — so you can use the answers to build successful, accurate profiles for your market research.
You can also use surveys as a means to get more sales. Some business owners find that adding the option to do a survey in exchange for a discount, such as giving 10 percent off an order, is enough incentive for customers to answer your questions. Everybody benefits. You learn more about your customers and generate revenue at the same time.
Google’s Keyword Planner is one of the best market research tools you can use to determine which words and phrases you should bid for in digital advertising campaigns.
3. Upload your lead list to Facebook Ads.
Social media marketing tools, specifically the Facebook Ads program, are an effective way to carry out market research on your audience.
Look for a feature called “Custom Audiences” on your Meta Business Manager dashboard and upload your customer email list to it. The platform then automatically finds the profiles of the people on your list. After analyzing their Facebook pages, it builds charts that showcase trends among the people you added. You can see what habits and interests these people have and use this information to conduct more precise market research.
For example, Facebook may tell you that many of your customers use YouTube. If that’s the case, you may want to advertise on it as well as create video content and a YouTube channel for your target audience.
4. Study your competitors.
All businesses benefit from a better understanding of their competitors. That’s especially so with larger companies that offer similar products to you. They didn’t get big by accident — they must have done something very well consistently over an extended period to grow so large. You want to learn what that is.
Competitors’ websites are a good place to start when researching why they have a greater market share. You can use tools like Ahrefs and SEMRush to understand the aspects of their content marketing that cause their sites to rank so highly. This is great for technical SEO planning, and it’s also good for getting an idea of why their content resonates so well with the target audiences you have in common.
There are certain things your rivals do better than you that their customers appreciate. Try to uncover what their clients value the most and make those products or services part of your proposition. On the flip side, there are some things you do better than everyone else in the minds of consumers. Find out from your customers what they are and then build on them further to retain your competitive advantage.
On an operational level, there are important insights you can extract by studying your competition. Where are they advertising? What new products or improvements for existing products are they working on? They may have spotted an opportunity before you did.
You’ll find Semrush and other useful services on our list of the best business tools and technology.
5. Set up multiple small email campaigns.
Another way to enhance your market research is through conducting small email campaigns. Once you’ve gathered customer data using the above strategies, you can develop applicable email marketing campaigns and gauge their performance. [See our top picks for high-quality email marketing and survey software.]
Segment your email database into groups that share certain characteristics (like average spend, frequency of purchase, age, annual income, internet habits and so on). Market to each group separately to see who interacts with your emails more by clicking through to your site and making a purchase.
These small tests can provide detailed insight into what kind of marketing works with your audience. While you’re likely to make sales from all segments of customers you contact, you can focus more time on experimenting with the most active groups to incrementally increase engagement with each subsequent campaign.
As explained in our Campaigner review, you can segment customer databases as a list manager in your email marketing platform.
Why market research is important
Market research is time-consuming, yet it’s important for launching and expanding a successful business. When you know your customers and what they want — and you understand the market you’re competing in — the information you collect can help you grow your company, win sales, and build strong relationships with the people who buy your product.
As you conduct your market research, you’ll discover that people are complex and diverse. They have specific wants and needs that they want someone to solve for them. If you use your data properly, you can build great products that truly help people.
Take the five strategies above and start to implement them in your market research activities. Gather data, keep notes, learn what people like, and you could soon build in future success and stability to your business.
Syed Balkhi contributed to this article.