Are your customer and market insights based on assumptions, observations or ad hoc feedback?
Have you sidelined or avoided structured market research because it’s too difficult, too expensive or you simply don’t have time? Maybe you’ve gathered lots of customer feedback, but you don’t really know much about the wider audience, your prospective customers.
Skipping market research to save money is like skipping a house survey to save £500 — it’s cheap until it isn’t.
A little market research could save you a lot of time and money. And it doesn’t have to be complicated either.
What market research is exactly
In short, market research is about gathering information from the market you’re operating in to answer questions that will help you make better decisions.
It’s about better understanding your customers, your competitors or peers (and why your ideal customers choose them or you), the context you’re operating in – the external forces that affect you.
A quick way to check if you could benefit from market research, is to ask whether you can comfortably and fully answer these questions right now:
- Which people / organisations are we best suited to serve? Why?
- What do people need and value from us?
- What factors prevent people from choosing to come to us?
- What alternative options are they considering or comparing us to?
- What is it that makes us not only unique, but relevant and credible compared to other providers?
- What marketing channels should we prioritise and what could we stop doing?
When should an SME do market research?
Some of the situations to proactively consider market research include:
- When you’re thinking about developing a new product or service
- When you want to increase conversion or retention rates
- When you want to better target different groups of potential customers
- When you want to diversify your customer base or penetrate new markets
- When you want to understand how to stand out better from the competition
- When you want to understand whether people are aware of how they feel towards you
However, sometimes the motivation comes from experiencing challenging issues such as:
- An awareness or concern that resources are being wasted
- Realising that your tactics and messages aren’t resonating with your target audience
- Continuously missing out on new opportunities
When deciding whether it’s a good time to do market research, a good question to ask is: Is it going to be expensive to get this wrong? If yes, do some market research first.
If you want to achieve any of the goals or overcome any of the issues set out above, market research will give you an evidence-base to drive more strategic, data-driven decisions.
The main two types of market research
1) Secondary research (data that already exists)
Ironically, secondary research should come first. It’s quick and cheap to access, avoids reinventing the wheel – and AI has made it infinitely easier to source and sort through it.
Externally, there’s a wealth of free open data sources out there including:
- Government/open datasets (ONS Business Counts, census data and other national statistics)
- Industry/sector reports
- Search trends, marketplaces, directories
- Competitor websites – pricing, reviews, messaging
Internally you may be sitting on a wealth of data which could be better organised to give you useful insights. Data such as:
- Your own analytics (web, email, social media channel engagement, sales notes)
- Customer reviews
- Web search queries
Secondary data can help you define and refine the questions to ask when you move onto primary research.
2) Primary research (data you collect yourself)
Primary research enables you to fill the gaps and answer the questions that desk research can’t. Often this means customer motivations, barriers, buying behaviour, propensity, price sensitivity, clarity of messaging, and user-friendliness.
Primary research methods include:
- Surveys and questionnaires
- Interviews or focus groups (where you interview multiple people at the same time)
- Observation or field studies
- Test or experiential marketing e.g. giving away samples and getting feedback or showing two versions of a design.
The good news is that even a handful of interviews, a couple of focus groups or a short survey can yield some valuable and actionable evidence.
Primary research can often confirm what you know or assume to be the case, but it will inevitably provide some gold nuggets of information you weren’t aware of. And the power it has in getting buy-in for marketing projects and decisions is amazing to witness. Plus, depending on how you obtain consent you might be able to get some case studies or testimonials out of it.
Why committing to a day of research pays
The following four 90-minute exercises can help you to get your market research on a firmer footing:
- Spend 90 minutes exploring what data exists in the market e.g. census or business counts, industry reports.
- Spend 90 minutes doing a competitor (or substitute service) scan looking at what they charge, how they communicate, what they provide customers in the way of convenience, and what makes them credible.
- Spend 90 minutes looking at what data you have already e.g. via your customer records, Google Analytics (which pages visitors are interested in), Search Console (what queries visitors who come to your site use to get there).
- Spend 90 minutes making a note of what assumptions you’ve validated and what you’ve discovered, then brainstorm what:
- you should continue doing
- you should stop doing
- you could start doing
- what questions remain unanswered and could be answered through some primary research such as interviews
Say for example a business assumes that their bespoke/ tailored approach is what differentiates them; they spend 90 minutes doing a competitor scan of 8 similar consultancies and see that pretty much all of them use some variation of the wording “tailored/bespoke.” So, it’s not differentiating. On looking at the competitors’ reviews however, they see that clients don’t always rate their expertise or the reassurance they provide. This is something your customers have mentioned they appreciate about you. They decide to stop focusing on the ‘bespoke/ tailored’ message; this is a minimum expectation – a ‘hygiene factor’ – and change your messaging to lead with your credentials and accreditations. Within a couple of months, you’re attracting higher quality leads who can single you out from the generic messages other providers are putting out there.
Is it worth a day of your time to discover something that could turn business around?
If you don’t have the time, or want a truly unbiased view, you might want to consider outsourcing this to an external specialist. But just by undertaking these activities, you’ll have greater clarity and confidence about what to promote, who to target, what to say, where to invest your time, and what to stop doing.
Remember, the cost of guesswork is often higher than that of any research project.
I’ve helped many organisations develop market research insights and carry out small-scale research. If you’d like help gaining valuable secondary or primary insights, please get in touch.