With all of the uncertainty that COVID-19 has brought us, it is now, more than ever, important to find ways to stay ahead of your competition.
Despite 2020 being tumultuous for most of us, online businesses have continuously been booming. This means there’s more competition today than ever in our digital landscape—and it’s also fiercer than ever before.
Additionally, researchers found that we can no longer rely on shallow demographic characteristics to predict consumer behaviour. This means it’s time for you to dig deeper and put in more effort to understand your customers and the market you’re serving.
That’s exactly what market research is about: collecting data and using it in the best way to attract more paying customers.
If you’re looking for ways to get more sales in 2021 and grow your small business — keep reading.
In this article, I’ll answer all of your market research questions. You’ll be equipped with a step-by-step instruction on how to conduct research within your budget.
- Defining Market Research and Why You Need It
- Why It’s Important to Know Who Your Customers Are
- Don’t Let Competition Give You Headaches
- Market Research Budget — What to Do if You Don’t Have One
- Conducting surveys yourself
Defining Market Research and Why You Need It
First and foremost, let’s establish one thing: it’s nearly impossible to grow your business without proper market research. This makes it that much more important for small businesses.
One of the most common mistakes that small businesses make is trying to reach multiple avatars (ideal customers) at once. Thus they fail to connect their product to the specific needs of a specific market and end up being mediocre in all fields they venture in.
Try to reach everyone and you’ll end up reaching no one.
It’s crucial to optimise your product and your marketing strategy to target a specific group of consumers.
That’s where market research comes in:
Market research is the process of collecting and analysing data on your target audience so that you can reach them in the most efficient way possible.
The goal of any market research is to learn more about your customers and their behaviour in order to prevent wasting money and time on tactics that don’t work.
To put it bluntly, adequate market research improves your sales and keeps your business afloat. Failing to conduct adequate research, on the other hand, will result in two things:
- You’ll fail to align your product with your target audience’s desires. In other words, you’ll simply bark at the wrong tree.
- You’ll get overrun by your competitors that provide stellar, “custom-made” service to their ideal customer, which you’ll never be able to replace when you’re targeting everyone.
Why It’s Important to Know Who Your Customers Are
Knowing your customers is essential for any business, as it helps business owners understand how, when, and where to reach them. By exploring their habits, experiences, and preferences, you’ll get invaluable insight into how to offer and advertise your services or products to them.
You can also find out if there is a gap in the market that your company can fill and explore the best ways to do so. It’s also important to know who your customers are in order to know where they are — both physically and in the grand scheme of things. So, keep in mind that you will want to research (and later advertise to) customers within your reach.
Consider the behaviours of your target audience, how and when they spend money, what are their interests, their go-to places for inspiration and shopping are, etc. In essence, market research helps you meet your audience where they already are and meet and exceed their expectations. In turn, this will dramatically improve your sales.
Don’t Let Competition Give You Headaches
Many small business owners and seem to fear or get extremely annoyed by their competition. So, my advice to you is: instead of letting the competition give you headaches — embrace it!
Competition a fact of life for every business, but it can also help you with your market research. Consider exploring their online content and ask the following questions:
- What type of content do they publish?
- What do their customers say in their reviews?
- What’s their brand like (e.g. friendly, authoritative)?
- Who’s their target audience?
- What are their most popular products or services?
Instead of working against your competition, use it to your advantage.
Additionally, you can target current, disgruntled, or not-so-satisfied customers of your competitors, by giving them what they felt was previously lacking. This way, you'll get a unique approach that can help you get more sales in 2021, and appeal to new markets at the same time.
Market Research Budget — What to Do if You Don’t Have One
Small businesses often find it hard to compete in a market so saturated with huge giants and their enormous market research budgets.
What small businesses don’t realise is that they hold a unique position in the market, and represent a company culture that many customers appreciate. So you (or the agency you hire for market research) can and should capitalise on that.
All that being said, hiring an agency to do your bidding for you can cost well into thousands of dollars, so it isn’t within everyone’s reach. What you, as a small business owner can do is take things into your own hands and use the available tools and resources to do market research for free.
Also, if you, like many other small business owners feel that the existing insight tools are unnecessarily complicated — worry not. I’ll outline simple methods that don’t require you to have a master’s in marketing or spend hours on research and preparation. Additionally, you can do all these things even if you don’t have a market research budget.
a) Conducting surveys yourself
Doing the legwork yourself is worth its weight in gold, because, in addition to facilitating market research, it helps you nurture relationships with your customers.
The first thing that you need to do is form a survey that will help you better gauge your ideal customer.
You can compile a series of question such as:
- Who are my potential customers? (their age, income, gender, location, occupation, education level, marital status, etc.)
- What are my customers’ shopping and buying habits?
- How large is my target market?
- How much are potential customers willing to pay?
- Who is my competition?
- What are my competitors’ strengths and weaknesses?
Say that, for example, you’re the founder of a small online jewellery business and are in search of new conquests, markets, and customers in general. You can start by asking your current customers what they’re looking for and missing with such products.
Additionally, you ought to reach out to your industry contacts (who are within your target market) to ask them about their thoughts, previous experiences, objectives, business background, biggest challenges, content preferences etc.
Lastly, you want to look into your competition and their advantages or disadvantages in the market. Emulate what you can and improve where you see a place for improvement, but before you do any of that, try to assess whether the given niche is saturated.
Facebook groups offer a gateway for you to reach your target audience and approach them in an easy, straightforward way.
The best way to find these Facebook groups is to search for relevant keywords and see where they are mention. For example, if you have a jewellery business, search for that specific word, but also look for mentions of “necklace”, “ring”, “earrings”, etc. You can be even more specific and type in terms such as “gold necklaces”, “wedding rings”, “jewellery gift/present”, and so on.
Once you find groups with people from your target audience, you can ask the members about their thoughts and opinions about the market and its needs. You can even enquire about their feelings about your business and brands.
Subreddits can be a great resource for information about market research, tips, and tricks, and a good way to reach your target audience. For general information, you can check out r/marketing or r/entrepreneur. Additionally, you can use Reddit to research content ideas and get relevant keywords.
You can also join specific communities, related to your field to get advice or cross-promote. These people and posts can be a great source of inspiration — especially when you’re feeling down and thinking of giving up.
All that being said, you’re strongly advised against using Reddit to blatantly and aggressively advertise your small business.
If you’re looking for more info on the dos and don’ts of using Reddit for market research, I recommend taking a look at this Quora post.
In this day and age, it comes as no surprise that most businesses consider (and invest in) influencer marketing at one point or another. After all, it’s a great way of reaching your target audience and conducting market research — when it’s done properly.
Ideally, you’d want to find an influencer that’s somehow related to your business activities or niche so that they can share specific insight into your target audience.
Then, ask them if they’re willing to help you with your market research, and what they expect in return. To conduct the research, the influencer could ask their audience questions (like the ones you’ve included in your surveys). They could do so via stories and posts on their social media.
As you hopefully know by now, market research is an integral part of growing your business and increasing sales in 2021.
However, that doesn’t mean you have to spend money hand over fist to do it. You really don’t need to pay a dime to do it, which is extremely important to most small businesses.
Not to mention, by doing the market research yourself, you’ll get to know your audience better, reach them more efficiently, and ultimately reach into new markets.
Are you a small business owner or know someone who is struggling? Share this article to raise awareness of the importance of market research!