Before we can dive into how market research helps a business, we first need context around the concept of “market research” itself. Some define it narrowly as “the act of gathering information about customers’ preferences and habits.” Others define it a bit more broadly to include the processes, policies, techniques and tools that are utilized to solicit, collect, analyze and interpret that information. At KL Communications, we uphold the broader definition, which includes both digital and in-person approaches to market research. In fact, we were one of the first to provide a market research online community (MROC).
Market research helps a business by informing strategy. As reported by Teradata, more than 60% of marketers do not conduct market research. As a result, they do not have data-informed marketing strategies. That’s a missed opportunity to deepen the engagement with consumers and drive loyalty. There are numerous benefits to conducting market research but we have identified the most critical ones.
Here are five key areas where market research will help your business.
1. You will understand your customers better.
Empathy is not a skill that every business considers. Even fewer businesses have mastered the art of studying and implementing improvements based on customer experience. Businesses should study what their customers do to make a purchasing decision. This includes all their considerations such as what savings they might obtain, how they evaluate competing options, the actual act of making the purchase, as well as any resulting feelings or actions after the purchase. Tapping into the mindset of your customers affords your business new opportunities.
Invite your customers to open up, but be prepared to take action on what they say as they will hold you accountable. Lose your bias, be transparent and authentic. Let them tell you what they want, need and what their pain-points are. Let them share how they feel about your brand, your competitors and what they think you should be doing differently. Only then can your business truly tailor products, services and marketing to them.
2. You will understand your non-customers better.
Non-customers may be the most important resource of all when it comes to market research. In contrast, loyal customers are already won over. They may not have a negative perception of your offering or they may not choose to voice it. Instead, tapping into those people who are not yet invested in your brand may provide your business with a fresh perspective you’ve never considered before
What’s keeping these non-customers from using your services or products? Ask former customers the critical questions regarding why they abandoned your product or brand. Ask them what changed and what would it take to win them back. Asking open-ended questions can be insightful and may serve as the key to harvesting valuable information which can be translated into actionable insights.
3. You will understand your industry and marketplace better.
That adage, “a bird in the hand is worth two in the bush” rings particularly true when it comes to how market research helps your business better understand your industry. Using online search tools is effective in helping break your industry down into discrete categories to refine your own classification and niche, but you need more. Sure, you can hire analysts to benchmark your brand, assess whether your messaging is current and if your strategy is on the same path that the industry is headed. However, it’s not quite the same as hearing it from your customers.
You can ask – and learn – where are the opportunities? The pitfalls? Who is stumbling and why? You’ll learn about the related activities, initiatives and products that your customers are excited about. There may be some new information that could spark innovation.
4. You will understand your competition better.
It can be challenging to understand what your competition is doing and downright difficult to predict their next moves. That said, asking consumers what they like versus dislike about your competitors’ products and brands gives you a window into your competitors’ own market research. Surely, they are hearing the same things that you are from their customers. This type of “social listening” is encouraged to enhance your business’s strategic planning.
Consumers know what they want and market research provides tools and techniques to help them articulate it. Once you have that knowledge, you can adjust your positioning, as you will likely learn more about your competition’s value proposition. Market research helps businesses understand their competition better and affords an opportunity to then “double down” on whatever makes your own business unique.
5. You will understand your business better.
It seems a bit counterintuitive that outsiders, both customers and non-customers, can tell you more about your own business. But, the truth is that they can, and they do so through an unfiltered lens. Cultivating conversation to secure that outsider’s perspective helps businesses do better.
Market research uncovers strengths and weaknesses that may or may not be known internally. If those gaps are known, employees may withhold sharing what they know for fear of retaliation or some other negative reaction. Even more importantly, market research will shine the light on what makes your business special, what makes your business better, what makes your business more interesting and better. Market research helps businesses see, with tremendous clarity, how their messages, products and brand resonate with their customers first-hand. Customers can see through any veil, perceived or real, that a business projects and they will, in very clear terms, call you out for a lack of transparency or a misfire.
What does all this mean? The message here goes well beyond how market research helps businesses do better, be better and grow. It means more customers, happier customers and growth for your business which makes shareholders happy, too.