Conducting market research is a vital part of any business, especially when you’re trying something new. You need to know that there’s an interested market who are ready and willing to buy whatever it is you’re selling. There’s no point in wasting time, money and effort developing a new product or service if customers aren’t going to pay for it. So, you’ll need to do some market research, but how?
Market research isn’t just about sending out surveys and refreshing your inbox or waiting by the post box for replies. There are five key steps to conducting market research:
- Deciding what questions you need answers to
- Knowing what questions to ask to find those answers
- Figuring out how to ask potential customers those questions
- Understanding and analysing the answers you get back
- Putting that information to good use in your business
Choosing your questions
Knowing what information you want to find through your research is very important, otherwise you won’t know whether your research has been useful or not. It’s not always enough to ask whether they like your product or service, liking doesn’t necessarily mean they’ll commit to purchase. Delve a little deeper and try asking things like:
- What features do you look for when purchasing _____?
- How often do you buy _____?
- What motivates you to want _____?
- Do you make the buying decisions in your household _____?
- What’s your typical budget for _____?
You might not necessarily need to have direct questions to ask customers either. If you’re researching the best place to open a shop, for example, you might look into the passing foot-traffic in the area at different times of day. If there aren’t lots of potential customers walking by, it might not be the best place for you to try and sell from.
How to get responses
Once you know what questions you want to ask, you’ll need to know how to get answers from your potential customers. There are several different ways you can ask people for feedback about your product or service, and each has its strengths and weaknesses. You could send out questionnaires or conduct interviews with a sample of your current customers, provided you have their permission to contact them. Done online or face-to-face, these could be a relatively cheap way to gather information from your market, however, the response rate is typically low so you might not get as much feedback as you need.
You might also consider holding a focus group or offer tasters of your new product or service to get immediate and direct feedback from your target market. Conducting market research in this way can be expensive and requires a lot of planning, but you can get some really detailed and helpful responses from your testers.
Take a look at our top tips for market testing here.
Finding secondary data
Market research isn’t just about gathering what’s known as “primary” data directly from potential customers either, you can get excellent “secondary” information by spending an hour or two online. Primary data is great because you’ve conducted it yourself and so you know that it’s fresh and directly relevant to your business, but using other people’s research as a secondary source can be just as helpful if it’s coming from the right place. The Office for National Statistics, Federation of Small Businesses and the British Chambers of Commerce all gather data about your market – and your competitors – that you can access for free and could be a good place for you to start.
Using your results to make decisions
Gathering lots of great primary and secondary data is a great start, but there’s no point in having all that information if you don’t make use of it. You have to use your results to inform your next moves. If people claim to like your product but don’t have the funds or reason to commit to a purchase, you’ll need to make changes, whether that be to add more value to your customers, or to tweak your target market. Listen to what your results are telling you, and don’t just pay attention to the parts that you wanted to hear.