How To Do Market Research For Your Small Business

Small businesses are precarious in nature unless a strong data-driven approach supports them. It involves gathering information from various sources to understand how the marketplace operates and how customers react to different products. Equipped with this knowledge, entrepreneurs can make informed decisions that help them succeed in satisfying customers and creating outstanding products.

Thus, market research plays the most significant role in the inception and growth of the business. It is not a one-time activity that can be overlooked when the entity expands. Instead, it is needed at every stage of business development to determine the external factors affecting the venture.

So, here is how small businesses must conduct market research to gain the attention of their target audience. It will help you navigate the tedious process in an organised and effective manner.

What Is Market Research?

Market research uses different techniques to collect data about the target audience and competitors. It helps the business owner determine the feasibility of launching a business, product or service and even selling business online. It involves defining the demographic and psychographic characteristics of the buyers. The demographics include location, age, income, occupation, gender, etc., while psychographics include their needs, desires, likes, dislikes and preferences.

It is also helpful in capturing customer feedback to understand the satisfaction levels related to the products the business offers. It informs the business about the features of the competitor’s products that the target audience prefers. Small businesses can use this valuable information to improve their products and customer service, which helps in boosting sales and profits.

How to Do Market Research for Your Small Business?

Market research is a time-consuming and exhaustive task that includes focus group discussions, surveys, observatory research, competitive analysis, pricing research, etc. Here is a step-by-step process for market research.

• Create the Buyer’s Persona

Market research involves assessing the buying behaviour of the customers. However, it requires defining the ideal target buyer who can be questioned during the research. It is needed even when the entrepreneur plans to sell business online to ensure that they will find qualified buyers.

The buyer’s persona is characterised by defining the ideal buyer’s gender, age, geographical location, occupation, income and family size. It gives an insight into finding the right audience for persuasion and sending communication. It helps in achieving the best marketing results.

• Find Target Buyers for Research

After the buyer’s profile has been created, entrepreneurs need to find groups of such people in the market for the research. They need to create a pool of the target audience to be used as a sample in the survey. Businesses can collect data through online surveys, telephonic question-answers, and focus group discussions.

The information gathered from this sample helps to understand the target audience’s characteristics and buying behaviour. The sample can include buyers who have recently purchased from the brand or provided feedback honestly. The group should have a mix of target audiences, such as those who purchase from competitors. They must be incentivised to help in the research work.

• Prepare Questionnaires for the Survey

Remembering that you must put relevant questions in the survey and follow a structured pattern is vital. The form must begin with personal questions like age, occupation, location, income level, etc. It must flow organically to the topic of discussion that will include questions related to their favourite things, challenges, and needs.

It must have open-ended questions to get elaborate answers from the respondents and gather a good amount of data for analysis. The next part must have questions about your products and services to know what improvements are needed. It helps successful entrepreneurs enhance their offerings and build a strong entity, which can generate excellent returns when they decide to sell their business online.

• Conduct Competitor Analysis

Business owners must know how their competitors perform and satisfy the target audience. They can gather data about their rival brands from various sources. The first step is identifying direct and indirect competitors in the same marketplace. Find out the strengths and weaknesses of these entities to seize opportunities through the determination of gaps in their offerings.

Entrepreneurs should also look at the industry reports, market news, trends in the sector and social media patterns to get a deeper understanding of the competition. It is necessary to review their marketing strategy and identify the type of content that can be used for wooing the target audience.

• Review Data and Draw Conclusions

Entrepreneurs must collate the data and determine the valuable findings. They must compare the answers and identify the common patterns in the information collected from the sample. The data will help you answer your questions about the type of promotions to be used and the features to be added to the products to increase sales.

Businesses can also use information from social media to write the research report and the findings. It must include recommendations to be followed by the business to grow in the competitive space.

Wrapping Up

Market research comes in handy when the entrepreneur is trying to sell a business online, wants to improve products, test a new offering or expand. It must be used before every big decision to reduce risk and make calculated predictions.