If your business is doing well, you may feel like market research is a waste of time. After all, you’re bringing in revenue and getting rave reviews from clients … clearly, you’ve got the hang of this!
But here’s the thing, lovely: you don’t know what you don’t know.
Avoiding market research is a little like sticking your head in the sand and pretending your business is so perfect it couldn’t possibly be improved. And EVERY business can be improved.
When done correctly, market research can have a huge impact on your company’s growth trajectory, client impact, and bottom line. And it’s not nearly as complex and overwhelming as you might think!
Finding out about what’s going on in your niche and with your clients can only lead to good things for you as an entrepreneur.
Why is market research important and beneficial?
When you first launched your company, you probably spent some time gathering information about your target customers’ needs and preferences. Why do it again?
Because those needs and preferences change over time, and so do the methods you can use to address them!
You’ve gotta update your data and understanding of the people you serve if you want to continue serving them fully and skillfully.
Not only that, conducting regular market research – even every few years – can help you increase sales, improve customer service, and grow into new markets.
This one type of data collection paves the way for better inventory management, business planning, time management, and employee management.
BUT! It must be done right or it can take you and your business on a wild goose chase.
Pitfalls of market research
Since market research involves gathering information about groups of people and making decisions based on what that data tells you, you need to be sure you are meticulous about your methods.
First off, you need to make sure you gather enough data to draw sound conclusions … but not so much that you can’t possibly sort through it all.
You also need to ensure the data you use is accurate and of good quality, and ideally that it was either gathered by a VERY reputable source or collected by your own team. (Third-hand data is not to be trusted!)
Finally, market research can feel a bit like trying to hit a moving target since client expectations change almost constantly. So be sure to frame your research questions to have a smidgen of flexibility, but also yield solid, actionable answers.
Your guide to market research best practices
There are five basic methods that can be used to conduct market research: surveys, focus groups, personal interviews, observation, and field trials. Naturally, some will be easier and cheaper than others to do, so pick the ones that make sense for budget and business model.
Once you’ve got your methods, you need to frame up your questions!
Naturally, you can investigate any issues you think are relevant to your business, clients, and marketing strategies, but I strongly recommend including all of the following in your efforts:
Understand who your ideal client is: I hope you’ve already done some exploration of your ideal client profile already, but if you created that profile more than a year ago it needs a refresh.
You can do much of this by brainstorming on your own, but the research portion comes in when you consider demographic and statistical information. If your ideal client is middle-aged empty-nesters, you need to know where they live, how much they make on average, what websites they frequent, and more.
Identify how you can help that client: What are your ideal client’s pain points? Needs? Desires? What problems do they face, and how are they addressing those problems now? How do their current solutions fall short? What talents, ideas, or solutions can YOU offer that will address those pain points better?
Gather data about your ideal client: Beyond demographics, investigate your ideal client’s likes and dislikes, habits, and histories. Where do they hang out in real life? Are they more likely to use a mobile device, tablet, or laptop? How many courses do they take each year? How many books do they buy? Consider how you’ll be interacting with them and what you’d like to sell them, then reverse-engineer your questions from there.
Determine who your competitors are: Who else is operating within your niche and offering similar services to your ideal clients? Consider a spread of competitors from low-priced to super-expensive so you can really dig deep into how they operate. You want to know what they’re doing better and worse than you!
Gather as much data as you can about your competitors: This can be tricky, but do what you can. How many Instagram followers do they have? How many people subscribe to their podcasts or YouTube channels? Which press outlets have featured them? If possible, create a dossier on each so you have a rough idea of how they stack up.
Once you’ve gathered all of this info, you’ll need to go through the data and determine what will and won’t help you.
Some of it will shape your immediate actions and impact how you design your offerings—like client pain points and use patterns—but some will just be anecdotal. Knowing that your ideal client hits the gym twice a week may not shape your strategies, but it gives you insight into that client’s lifestyle, priorities, and values.
Sort through your data and divide it up into three categories: unimportant, impactful, and anecdotal.
You can discard the first group, but I’d recommend writing up reports on the other two so you can fully process what you’ve learned.
Once you’re done, document your processes so you can do it all again in a year or two.
Those clients will change, and so will the world, so plan to keep doing market research on a rolling basis to keep yourself informed and tuned-in to what will help you.