Our guide on how to do market research

Market research is a great tool to help you better understand your customers’ wants and needs. It can help you maintain a competitive edge over similar companies in your industry and is an important part of business development. Good market research can help you better identify your target audience and help you determine how successful your product or service will be with that audience.

What is market research?

Market research involves gathering information about and from your target market. It can help you as a business owner identify the needs of the market you are operating in, as well as any competition you are facing. You can use the findings from your research to shape your business to meet the needs of the market.

Why market research is important

Market research should be a key part of your business development strategy because it allows you to do several things, like:

• Get to know your customers: what do they like, what do they dislike, and ultimately, what are they looking for from a business like yours?
• Identify problem areas in your business: what isn’t working so well? What could be improved upon?
• Understand your position in the market: who are your key competitors? What are they doing the same as you? What are they doing differently?
• Communicate better with your customers: finding out more about your client base means you can tailor your marketing and communications.
• Test and improve your products: what do your customers like about your product? What are they not so keen on? What about those in your target audience who haven’t bought your product – why haven’t they?

The limitations of market research

While market research is a great way to get an overview of your customers and what they want from a business like yours, it also has its limits:

• It can’t predict consumer behaviour in the future: Market research is a great way to capture consumer attitudes at a moment in time. There is, however, no guarantee that this will remain constant.
• It can be lengthy and time-consuming: Good research can take a significant amount of time. From the initial secondary research, to thinking about what to ask and who to ask.
• Getting good quality responses can be difficult: Any research is limited by who is willing and able to respond.
• It can be difficult to collate qualitative data and make sense of it: Qualitative data is notoriously difficult to analyse and present. It is mainly anecdotal, and therefore it can be difficult to show any meaningful findings.
• Results won’t be 100% accurate: Market research relies heavily on respondents giving you accurate answers.
• It will be biased towards the customers you interview: Your research can only show responses from those you have managed to survey.

The types of market research

Primary market research

Primary research refers to the methods where you are directly sourcing your own responses. Primary methods can result in both qualitative and quantitative data collection. Some key methods include:

• One-to-one online interviews
• In-person interviews
• Surveys or questionnaires
• Focus groups
• Beta testing
• Customer observation

Secondary market research

Secondary research methods will see you drawing upon existing research and data that can help you with your investigation. This might include things like:

• Reading existing research papers or reports
• Utilising existing databases
• Conducting competitor analysis

How to do market research: step by step

Step 1. Secondary research and context

A good place to start is with your secondary research. This can give you a good contextual background to get you started. This might include reading research reports published in journals relevant to your market sector, or conducting competitor analysis.

Step 2. Define your buyer persona

The step above can help you begin to define your buyer persona. You can also do some of your own research to find out more about your target audience. It is important to know who you are targeting, because you can’t know how to target someone until you know who they are.

Think about the gender, age, likes, dislikes, location and occupation of your target buyer. You might be able to get some of this information from previous purchase data, or from existing databases.

Step 3. Identify customers to target

Once you’ve got a broad idea of who your target audience is, you need to think specifically about who within that group you want to target.

It is good to aim for a combination of existing customers, customers who nearly purchased from you but then decided not to, customers who have not engaged with your company at all, and customers who have engaged with a competitor company. Think about the number of respondents you might need to make the data usable.

Step 4. Choose and prepare your research methods

The method you choose for your research will depend on your aims, budget, and the time you have available to conduct the research. It is important to think about what method will help you get the results you need. Will a survey with tick box answers provide what you need, or do you need to ask more in depth questions using a one-to-one interview.

If you are doing one-to-one interviews, what questions will you ask? Will you ask open ended questions? Will you follow up if you feel like you need more information? If you are using a survey or questionnaire with multiple choice answers, make sure the answers you are providing are robust.

Ultimately, this is the time to think about what it is you really want to know. Can you get what you need from a short online survey, or do you want the opportunity to ask more? A good tip is to try not to make surveys, interviews and questionnaires too long.

Step 5. Reach out and engage with respondents

Think about how you will reach and engage with your respondents. Use your existing networks and databases to reach out to your target audience. Use social media, newsletters, LinkedIn, co-workers, spread the word as far as you can. The more diverse your group of respondents, the more accurate your findings will be.

Incentives can really help. Can you give people something exclusive as a thank you for taking part? Perhaps a discount code, or a limited time offer.

Step 6. Collate your findings

Highlight your key messages, create visuals and infographics, and make a note of any important findings. Remember, you want your findings to be presented in a useful way.

Make market research work for you

Market research is a great way to get closer to your target audience; find out what makes them buy and why, and then use this information to shape what you do. Research can be time consuming, but if you put in the effort, the rewards can be huge. And remember, research is only as useful as what you do with the findings.