Market research is the process of gathering information about target markets and customers. In other words, it’s about finding out who your customers are, how they behave, and what they like (and dislike).
Obviously, understanding your customer should be a top priority. Market research can help set the course for your marketing efforts—and even influence product developments or services. It might also uncover new data insights that would’ve otherwise gone unnoticed.
But how exactly can market research benefit your business? Let’s take a look at the main advantages of market research.
1. Collect the data you need to make more informed business decisions
Businesses regularly have to make tough decisions. But they’re a little less tough when you have some data insights that can point to one choice being better than the other.
Market research data can provide the information you need to determine whether a key decision will prove popular with existing and potential customers.
Conducting market research is key to determining a lot of major business decisions, such as:
- What sort of demand exists for new products, features, or services
- What pricing structure to use for your products and services
- What products or services need improvement
- What products and services should be phased out or replaced
- Where or whether or not to open a new physical location
2. Understand the people that form your customer base
You should know your customer like the back of your hand. Developing a deeper understanding of your customers is key to satisfying them—and also figuring out how to market your product or service to other potential customers.
You can use market research to answer important questions like:
- What is the demographic breakdown of your customer base?
- What are your customers likes and dislikes? How do those differ along demographic lines?
- What attracts customers to your products or services?
- What do customers dislike about your products or services?
- What are your customers primary concerns?
One of the most common market research methods is customer surveys. You can design surveys (or use pre-existing templates) that will get to the heart of a customer’s feelings about your brand. And you can incentivize customers to take the surveys by offering some sort of discount, coupon, or gift if they participate.
The more surveys you conduct, the more information you’ll have about what makes your target audience tick.
3. Identify exciting growth opportunities
Market research can help you recognize new avenues for growth and improvement that you may have otherwise ignored. For example, customer surveys might reveal product issues that can lead to new features or improvements. Or, a closer study of your market might reveal an untapped customer base that you can begin targeting. Maybe you will also discover upselling and cross-selling opportunities you can take advantage of.
Perhaps your market research will reveal that many of your customers have other brand loyalties in common. Assuming it’s not a competitor, this type of discovery could lead to a potential business partnership opportunity. The two of you can team up with a cross-branding exercise that delights your shared customers. It’s a great way to “link and build,” as the kids say.
4. Stay on top of the latest trends
Regularly conducting market research also gives you insight into emerging trends. Consumer behaviors change over time, and businesses need to be agile and stay on top of those changes so that they can be quick to adapt.
This type of market research often involves analyzing your competitors to see where they’re succeeding—and seeing what new products and services are trending with your own customer base.
When trying to stay ahead of the curve, your market research should focus on:
- Consumer purchasing behaviors
- New product features and improvements
- New technologies
- The changing popularity of various advertising platforms
- Successful messaging strategies
5. Make the most of your advertising dollars
Market research is an investment. You spend time and money studying your market, in order to figure out the most prudent way to spend your marketing and advertising dollars.
After all, advertising is not a one-size-fits-all proposition. Some businesses benefit from a strong social media presence, others do not. And to get even more granular, some social media platforms will be more suited to your target audience than others. Perhaps you have a younger customer base that spends more time on Tik Tok and Instagram than Facebook—in which case, your social media ad spending should reflect that.
Targeted online ads, such as pay-per-click ads, can also do a great job of reaching your primary demographics. And market research can help you create the most effective online ads for your target audience.
There are also the old school advertising mediums, such as mailers and billboards. Once again, market research can help you determine whether or not such advertisements would resonate with your target audience—and also, where to distribute them.
Research your market in order to conquer it
Knowing is half the battle. And knowing your audience is key to converting new customers and keeping existing ones loyal for life. Market research can help you understand who your customers are, what they like, how to delight them, and how to advertise to them. Sogolytics can help you collect the customer feedback data you need to make important decisions and drive customer acquisition and retention.
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