But, first, let me give you a simple definition of market research.
Market research is the process of gathering and analyzing data about one or more of the following:
A specific industry: For example, trends and patterns affecting the industry as a whole.
A product market: Research concerning the performance of a specific market. This research may look into things like the forecasted growth of the market and the number of competitors active in the market.
Products or services: Research involving a specific product or service. This kind of research may involve estimating demand for a new product or determining if sales would be improved by changing the appearance, branding, or product cost.
Customers: Research that seeks to understand the behavior of past, present, and future customers.
Conducting market research can reveal information about product branding, product differentiation, pricing strategies, marketing campaigns, and much more. This information can be extremely helpful for new business owners seeking to understand their business model or established business owners looking to increase sales.
Here are some things that should be at the top of your to-do list.
Know Your Target Audience.
Before you start making any significant steps in starting your new business, you want to ensure there’s an audience for you to sell to. Without customers, there are no sales. Market research will determine your potential audience, where they are, and how to find them.
If no one’s interested in the product or service you’re selling, you’ll need to reconsider if starting a business in that direction is a good idea. On the other hand, if there is a promising audience, it’s critical you make the right decisions regarding where and how to sell to these customers.
Know-How to Sell to Your Target Audience.
According to data from the Bureau of Labor Statistics, as reported by Fundera, approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed. Within the fifth year, about half will have failed. And by the end of the decade, only 30 percent of companies will remain — a 70 percent failure rate. The way people buy is forever changing. A thorough understanding of your target audience will help you determine who to sell to and how to sell to them.
If your audience doesn’t utilize all social media channels, why are you wasting time posting to all of them? Know which social media platform they are on and maximize your efforts there! Market research lets you know the best platforms for you to sell to your audience. Knowing how your audience shops is crucial for your business and its success, from online solutions to in-store promotions.
Know Your Competition.
When starting your new business, you must be aware of any companies that may be considered competition. Whether direct or indirect competitors, knowing how their companies may threaten yours will help you promote your product better and remain competitive within the shared audience.
Market research determines who might pose a threat to your new business, giving you a competitive advantage. If you’re aware of the competition, you can strategically change customer loyalty and position your brand in a unique light. Without this knowledge, you’ll find yourself feeling like a small fish in a big pond–unable to get past competition you didn’t know existed.
Know Who Can Help.
Understanding the ins and outs of marketing and sales can be confusing, especially when you’re starting a new business. Marketing tactics may seem unclear. How can you best reach and communicate with your audience? Where do you even begin?
Thankfully, combining market research with a marketing firm can help you improve your communication tactics. From content creation to social media management, a marketing firm can couple the information from your market research with the most effective marketing and sales tactics to drive results. Only with the in-depth knowledge of your target audience can a marketing firm effectively and successfully promote your business.
Starting a new business may seem scary. However, it doesn’t have to be. Taking the extra step and conducting market research guarantees you have all the information you need to succeed in your new business venture. Be proactive– equipped yourself with the information you need to be among the 30 percent of businesses that remain.