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The Benefits of Market Research for Small Businesses
How Businesses of All Sizes Can Learn What Their Customers Want
When you run a business, every dollar counts. One of the key benefits of market research is that it helps you maximize those dollars by enabling you to make smart, informed investments in products, services and communications strategies that resonate with your audience.
Fortunately, a market research strategy is attainable regardless of the size of your company or how long you've been in business. Options run the gamut from hiring large firms to bootstrapping and doing it yourself.
Why Market Research Matters
Market research tells you whether there is, well, a market for your offerings. You may have a brilliant idea, but you need to find out if it fulfills a need among your audience. If it does, you need to learn how to sell it to them.
If your business is already successful and you want to develop new products, market research will help you learn about comparable products and how they've been received.
The tone of your ads, the platforms on which you reach consumers and your brand reputation play an integral role in whether the market responds to what you're offering.
By studying your current customers you can track their behavioral preferences over time and tailor your offerings as demands change. You can also use data points such as ages, professions, lifestyles and locations to identify similar markets into which you might expand.
For example, the Walt Disney resort in Orlando has managed to provide customers with additional convenience while learning about them. Visitors can use MagicBands to make ride reservations, buy souvenirs and get into their hotel rooms. Through collecting data through these wearables, Disney is able to present targeted offers to people who attend the park.
Social media also plays an important role in modern brand communications and should be factored into any market research strategy. Tweets, Facebook posts, Instagram mentions and reviews on sites such as Yelp and the Better Business Bureau provide important signals about how your company is being perceived and where consumers are talking about it.
One of the benefits of market research is that it helps you shape your message and develop your desired brand reputation. Communication is everything when it comes to connecting with consumers, so studying their values and online and offline behaviors provides insights into what types of messaging will have the most positive impact on them. Then you can tell your company's story in ways that resonate.
Consumers today largely demand personalized, frictionless user experiences, and market research can help you understand exactly where to meet them. Personalized experiences can lead to a 6-10 percent revenue increase, according to Boston Consulting Group, but the experience needs to make sense for your specific audience. A market research strategy helps you learn their pain points and finds ways to serve them through dynamic, automated platforms and tailored customer service.
Market Research on a Budget
There are many ways you can do market research using existing resources, allowing you to stretch your budget that much further.
If you've already had moderate success, you'll want to determine what's worked so far. Who is buying the product or service and why? If you're still in the early stages of the company and haven't yet launched, you need to do a deep dive into the people you expect to serve.
You can begin the market research process by looking at secondary sources — statistical reports and surveys compiled by outside organizations. Industry groups often release studies about market trends that can provide context about your audience, and government organizations maintain demographic records that can help you learn more about the area in which you're operating.
Secondary reports can provide a great jumping-off point for building broad profiles of your audience segments. They also help you develop a broad view of your market and industry, which is key to developing offerings that are unique or in demand. You can also use secondary market research sources to begin thinking about how to position your brand and what types of messaging and language are resonating in the industry at a given time.
But to go deeper and more specific, you'll want to rely on primary sources, such as customer surveys and interviews. Speaking with customers can also provide inspiration for other products and upsell opportunities. Surveys and testimonials are also great ways to obtain candid feedback.
By combining the secondary and primary resources available to you with real-world insights, what you learn from a market research campaign could make all the difference in your business's success.
Investing In Your Business
There are always good reasons to invest in your business. We provide guidance on how you can approach these financial decisions that likely will have a lasting impact.
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The opinions expressed and information contained in any article published in the Vault are given in good faith and considered reliable. However, such opinions and information are subject to change without notice and are provided only as of the date issued. Neither Boston Private nor its affiliates warrant the completeness or accuracy of such information. Any third-party opinion is solely the opinion of its author and does not necessarily reflect the opinion of Boston Private or its affiliates. The materials on this website are for informational purposes only and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein.