How to Do Market Research in 5 Simple Steps
Whether you’re looking to start a business or already went as far as creating your website and other promotional assets, marketing is a priority for you. That is, if you want to gain new and keep existing customers.
You may need to create a fresh marketing plan or adapt yours to meet the needs of today’s shoppers, since these are constantly changing. In order to do this, your first step will be to conduct market research.
In this article, we’ll explain what this term means, the difference between primary and secondary research, and how to do market research of your own in five simple steps.
What is market research?
Market research is the process of gathering information about your target market to determine the key to your business’s success amongst this crowd. It involves understanding the behavior of consumers, such as knowing where and how they are shopping, what factors influence their choices, and why they do or don’t buy your products and services. This data will allow you to best serve your specific audience.
Through market research you’ll also be able to learn about your industry, such as spotting top trends, examining the market size, and getting to know your competition.
By the end of this research process, you’ll be able to draw conclusions about your market and get super clear on your business’s value.
Primary vs. secondary market research
There are two main types of research that all of the different methods fall into. Understanding a bit about them will allow you to decide which one, if not parts of both, best suits your market research needs.
In simple terms, primary research is the direct study of customers. It’s the firsthand information on your market. Methods of research include things like focus groups, interviews, and surveys.
This strategy is mostly useful for establishing your buyer personas and defining your target market, which we’ll dive into more below.
When conducting this kind of market research, you can do either exploratory open-ended conversations, or come prepared with specific questions you want to discuss. You can decide which approach best suits you based on your needs.
Secondary research is mainly comprised of information that outside sources have gathered, but it’s not limited to just this. It includes all the data and records available, such as trend reports, market stats, and industry-related content.
To access this outside information, you can turn to public sources and commercial research agencies, including places like the U.S. Census Bureau, Bureau of Labor & Statistics, trade and professional magazines, and even libraries.
Internal sources are also reliable and useful. Look into sales reports to spot trends from the past. Also turn to digital marketing statistics, such as your website and social media account’s stats.
How to do market research
Following these five steps on how to do market research will allow your business to grow to new heights by being able to reach your customers more strategically:
Define your buyer personas and target market
Engage with your audience
Determine the best methods to meet their needs
Research your primary competitors
Draw conclusions from your findings
01. Define your buyer personas and target market
The very first thing you should ask yourself is ‘who are my customers?’ If you can’t answer this question, you can’t even begin to interpret their behaviors. This is where buyer personas come into play. Defining your own starts with creating a fictional representation of your ideal customers. Answer questions such as, ‘how old are they? ‘ ‘where are they located?’ ‘What kinds of jobs and hobbies do they have?’ You get the point, the more specific, the better the results will be. Likewise, it’s okay to have multiple buyer personas too - just make sure to specifically define each of them.
Through your buyer personas, you’ll be able to discover your target audience. Your target audience is the real market you’re reaching. There is a specific audience size and available data you can find through both primary and secondary research on these people. As we’ll discuss more below, you can directly reach out to these people to engage with them and understand their buying preferences.
02. Engage with your audience
Now that you’ve defined your target market, it’s time to pull a sample and pick their brain. Through primary research methods like focus groups, online surveys, and personal interviews, you’ll be able to get common opinions about your products and services. If you’re still in the process of starting your business, reach out to people that fit the common buyer personas you want to have as future customers.
In order to find your sample, there are many different paths you can take. Ideally you’ll want to choose customers who purchased from you recently, as they’ll have a good memory of their experience. Also, people that almost purchased from you but didn’t in the end, such as abandoned cart shoppers. Other methods include turning to your social media accounts and asking coworkers and their friends. In all, you want to get a large variety of people. The more, the merrier.
While conducting your research, have your goals in mind. Getting to that goal involves having planned questions or conversation topics. For example, you can ask your participants ‘how much are you willing to pay for our products/services?’ ‘do you prefer to purchase online or in person?’ and ‘how will you respond to the new product or service we are launching?’ At the end of your survey, make sure to reward your participants for giving you their valuable time. Offer compensation in the form of money, gifts, food, or something else.
03. Determine the best methods to meet their needs
This step is pretty straightforward. Now that you have an understanding of your audience and have asked their opinions on your offerings, turn inward to yourself or your marketing geniuses at your company to determine the best methods to meet their needs. The practice of shaping your marketing efforts to fit your audience's needs is powerful for drawing customers toward your brand, and it lies at the core of an important practice called inbound marketing.
An important thing to consider is your product branding, as the look and personality surrounding your brand will certainly determine your success. Likewise, promotional efforts including social media marketing and email campaigns have big impacts on your selling rate. Although there are tons of advertisement spaces online and offline, you’ll learn based off of your audience, as well as trial and error, which ones work best for your business.
04. Research your primary competitors
This begins by classifying your business into one or multiple identifiable industries. Having your industry(s) in mind will allow you to determine who your competitors are. This is because you can download marketing reports for specific industries that list out this key information. Besides market reports, you can also turn to search engines like Google and social media channels like LinkedIn to search for industries and related companies. Note that the more specific you are about your niche market in the industry (step number one above), the more fluid it will be for you to spot your competition.
Once you have your competitors in mind, the next step is to perform a SWOT analysis on them. A SWOT analysis is where you’ll write out the strengths, weaknesses, opportunities, and threats of each of these businesses. Make sure to address the prices of their offerings, the display of their products and services, and other specific information about their marketing efforts.
After reviewing your customers in depth, you will be able to address how your business can compete with other companies in the field, what advantages you have in the industry, and what trends you should hop onboard with.
05. Draw conclusions from your findings
So you have tons of data at this point regarding your target market, their buying and decision-making processes, how you plan to reach them, and who your top competitors in your relevant industry are. The last thing you need to do is pull all of these findings together into a formal report.
Most of the time, this marketing report is part of a company’s business plan. That’s the case if you’re just starting out though. If you’ve been established for awhile or are using this information for one particular experiment, you can create an individual marketing research report. For both cases, you should lay out your background information, the purpose behind creating the report, and a summary of your findings for the four previous parts. Finally, end your report with strategic action items to meet your goals.
By Jennifer Kaplan
Small Business Expert & Writer