Research is an essential effort to gain a better understanding of a problem at hand. Without it, we would collectively be limited in our ability to solve problems and generate solutions because we lack the context around what the issue is. Similarly, market research provides businesses with answers to their questions and solutions for the problems that they have. This is just one of many reasons why the marketing research process is important for your business. Perhaps the most important reason of all is that happy customers equal happy buyers, which directly impacts your top and bottom-lines.
Why it’s important
Not only is the marketing research important, but it should be a fundamental part of every business, even if you’re one of the 32,000,000 small businesses based in the USA. There is simply no business too small to be exempt from knowing their customers wants, needs and behaviors. This is the essence of market research.
Even a one-off market research effort can be highly illuminating. Going one step further and employing the market research process as a standard business practice offers numerous benefits. Let us count the ways!
- If you don’t know that you have a problem, how will you know that you need to fix it? By reaching out to your customer base through defined market research protocols, you can uncover insights which will drive new features, products and business ideas. Or, efforts will elucidate opportunities for improvement with respect to service.
- Engaging with your customers opens the door to 2-way dialogue. By building trust through accountability and demonstrating that you value your customers’ opinions, that dialogue will be open and transparent. You may be surprised by how much you learn.
- Your business can gain an indirect advantage by probing which of your competitors’ products your customers use and why they prefer to use them. This affords businesses with a legal and ethical approach to competitive intelligence.
- You will better understand who your customers and non-customers are. The latter are particularly insightful because you can tap into why they aren’t buying what you’re selling which may trigger an innovative solution on how to win them over.
- On the topic of understanding, the market research process is important for your business because it enables you to better understand the whole marketplace, as well as who’s playing within it.
- This benefit may not be intuitively obvious, but market research exposes knowledge gaps with respect to your own business. You may not even be aware that you have an issue with your customer base that needs immediate attention; or that consumer preferences have begun shifting away from your offering. Running the market research process rigorously and routinely can spotlight potential problem areas before they escalate out of control.
- Market research is the critical right arm to product development. Without in-depth understanding of how customers use or intend to use a product within the given category, product developers will unable to effectively prioritize a feature set. Being unable to do so has consequences. For example, the wrong set of features could be prioritized resulting in the launch of a sub-optimal product which flops on the market. This can lead to potentially irreversible damage to the brand. On the other hand, having all of the features included can significantly delay product development time, increase cost and increase the risk of being too late to market.
Questions that market research can answer
The questions that can be asked via marketing research are truly endless. It’s up to your market research team to craft meaningful questions that generate descriptive responses. Binary yes/no answers can be informative but not richly so. There are a plethora of tools to conduct your market research with. For example, you can opt to send out surveys, host bulletin-board style focus groups or even employ CrowdWeaving® which is an immersive process for collaborative engagement between customers and stakeholders. This approach to co-creation quickly builds trust and secures in-depth responses.
Below are some of the key ways that businesses use market research and some examples of the questions they may ask:
- Trend-Spotting: Which trends have died? Which are emerging? Is our product still on-trend? Does the market have a need for what we are proposing to build? Are there economic drivers that we need to be concerned about?
- Customer Satisfaction: How did we do? Are you happy with our service? What can we do better?
- Product Innovation: What’s missing from this product? Since you don’t have a product to do X, how do you do it on your own?
- Distribution: Where are our competitors actively selling their products? Which distributors are the best promoters? What’s the optimal product placement?
- Competitive Analysis: Who else has a similar offering? Why is their product better? How are they contacting you? Which group is their product most popular with? How are they pricing and promoting it?
The bottom line? Your bottom line is precisely why the marketing research process is important for your business. In the absence of a solid understanding of who your customers are, what they want and what they need, you will spend countless hours and dollars creating something that the market doesn’t want. Betting your business on a hunch is not a sensible strategy! Always opt for market research, and if you can’t determine whether you should go it alone or which firm to choose, have a look at this guide.
