How To Conduct Market Research

An essential part of achieving business success is to know exactly who your customers are. By conducting market research, you can identify how you can reach your customers, address their needs, and stand out from competitors.

What is market research?

Market research is the process of gathering information on the market that your business operates in. This involves collecting data on your customer base and competitors to refine your products, services, and marketing strategy. With this information in mind, you will be able to stand out from competitors and better appeal to your customer base.

Why conduct market research?

Market research allows you to gain a comprehensive understanding of your customer base. Without knowing the needs, wants, and pain points of your customers, you cannot fully understand what they want from your business and what sort of marketing will appeal to them.

How to conduct market research:

1. Identify your audience.

The first step in market research, is to identify your audience. From this, you will need to create customer personas, which is a fictional model of your typical customers. Through this, you will need to identify the demographic and psychographic characteristics of this ideal customer, which may include:

• Age
• Location
• Gender
• Income
• Relationship status
• Education
• Job title
• Interests
• Challenges and goals
• Demographic/psychographic

Upon completing this, you will likely find that you have a few customer personas, but some may hold a more dominant share in your customer base than others. Knowing who your customers are is essential to being able to market towards the right people effectively. To gain a better idea of how to create your customer personas, check out our previous guide which also contains a template for you to use.

2. Check out your competition.

Once you have identified who your customers are, it is important to look at who you will be competing against for your customers attention. By identifying who your competitors are, you can see what they are offering, how they are offering it, and the prices they are charging. You should also expand your research beyond your direct competitors towards companies who may compete with your product or service but be putting more effort into another product area. For example, you may run a graphic design business, and be competing with a marketing agency that offers some graphic design services. By making a list of your competitors and what they have to offer, you can see how your business stacks up in comparison. It is also useful to see what your competitors are doing that works well with your customers. To help you with this, Business Foundations also has a guide on how to create a competitive analysis, which you can check out here.

3. Engage with your audience.

In this area of market research, you will be gathering some primary data on your customers to gain feedback on how your business can improve. The most economical way to do this would likely be through a survey, which you can send to your existing customers on your mailing list. You should ask them what they find valuable about your product or service, how you help them, and what they would like to see from you in the future. To maximise the number of responses to your survey, consider offering a discount or an entry into a raffle to entice customers to participate. You should also make the survey as simple and convenient as possible, by only asking three to five questions. From conducting this research, you may find out that a need is not only not being addressed by you, but by your competitors as well.

4. Compile the data.

With all the data you have collected so far, organize it in a way that applies to the customer personas you have created earlier. Detail how each competitor may have a different appeal to each persona and identify the ways that they are engaging well with these customers. In addition, you will want to take the feedback you gathered from Step 3 to see how this will improve your engagement with each persona.

It is important to conduct market research before undergoing any marketing activity. By knowing your competitors and audience, you can accurately target your marketing to address the needs and wants of your customers.