As we mentioned some time ago, you’re probably already conducting informal market research on a daily basis, whether intentionally or not. Each time you chat with one of your sales reps about customer complaints, compare your prices with your competitors’ prices, or talk with a prospect about product features, you’re learning more about your market.
But there are numerous reasons why it’s worth formalizing this process. Perfecting your market research process can help you find answers you didn’t even know you needed.
Segment your target market
Market research reveals the socioeconomic, sociocultural, geographical, and personal structures of your target market. This helps you focus on specific segments so you can adjust your marketing, advertising, and promotional strategies. When you know more about your different market segments, you can create effective campaigns and compelling marketing materials that resonate with your niche audience—you’ll know ahead of time which email subject line or ad image works best for which segments. Furthermore, knowing your audience is just as important for retaining customers as it is for bringing in new ones. After all, 34% of consumers have admitted to “breaking up” with a brand because of “poor, disruptive, or irrelevant marketing messages,” and nine out of ten consumers report “developing an unfavorable attitude” towards a company that sent them irrelevant advertising.
Identify new chances to meet needs
Market research can help you discover under-serviced or ignored segments whose needs aren’t being met at all (for instance, a special group whose pain points no business has considered). Ask yourself: is there a gap in your market you can fill by adding new features to your product?
Market research reveals current customer opinions, giving you insights that may drive future innovations and product improvements (which in turn drive more sales). What else do current customers want? What are you currently doing right? What could you do better?
Find where you fit
Through market research, you’ll learn about your competitors’ products, services, pricing, and marketing strategies, as well as their customers’ sentiments. How do they attract and retain customers? What do their customers say about them? What does their content marketing look like? Where are they flourishing? Where are they unsuccessful?
To understand your place in your industry, you should work to clarify your unique selling proposition (USP), value proposition, and brand position. The more thorough your knowledge of your competition, the better you’ll understand how your offering is unique. This is crucial when it comes to differentiation statements (like your USP) and strategies (like your product differentiation strategy).
Get to know your consumers like your own family
Clay Christensen, professor at Harvard Business School, has observed that 95% of new products fail because businesses neglect to “crawl into the skin of [their] customer[s]” and empathize with them. Thanks to market research, you don’t need to be a mind-reader. You can test new products and features on your target audience and gather feedback directly from them. This sort of research and response can mean the difference between success and failure when it’s time to go on the market.
Avoid unpleasant surprises
We already mentioned one risk—launching a dud product—proper market research can mitigate. Market research can also help avoid bad brand positioning and poor pricing strategies. Knowing your market helps you recognize and prepare for economic and industry shifts. When you know your consumer’s needs, you can test and run ad campaigns that resonate with your target audience. If your business is an ongoing story, market research helps you anticipate what happens next and keeps you from being taken unawares by unpleasant plot twists.
Thorough market research offers a multitude of benefits, and this shortlist only gives you an idea of what you stand to gain. Research your key questions and pay close attention to what you find—this is how you meet your consumer’s needs.