Anyone who works in market research, and its related fields (market research recruitment), understands the value of conducting market research studies. What may seem so obvious to us, isn’t necessarily understood by those who haven’t benefited by market research.
In today’s blog we’ll highlight five benefits of conducting a market research study. Keep in mind that sometimes there are very specific reasons to conduct market research, such as: testing UX design; product testing; brand identity; and testing start-up ideas. Even if your market research study has a very specific scope, you’ll end up learning a lot more about your product or idea and customers. Of course there are more than five benefits to market research, but for brevity, we’ll focus on some of the main ones.
1.) Identify Business Opportunities
Market research studies reveal who your target customers are and how you can reach them. Armed with this information, your teams can explore ways to expand market share through strategic partnerships or relevant product offerings or upgrades.
2.) Minimize Business Risks (especially startups!)
The odds of a start-up business lasting five years or more is about 50/50, according to the SBA. There are many challenges facing new businesses with cash-flow being one of them. It’s sometimes hard to justify spending money on market research when a fledgling startup, but it can be money well spent helping ensure that your business or idea isn’t one of the 50 percent that don’t make it beyond five years. Conducting ongoing market research during the early years can help in a number of ways. For example:
1. You can test products and design ideas before launching. By testing your concepts on a small subset of your target audience you can get invaluable feedback and implement the changes before committing to a full launch.
2. You can learn why customers aren’t returning. A quantitative or qualitative study can help reveal why customers aren’t returning, and what the barriers are.
3. You can gain insights into decreasing sales. Maybe your product has a flaw that isn’t readily apparent or perhaps your UX platform is cumbersome and doesn’t make it easy for customers to get the information they’re looking for or complete a purchase. The problem is, you won’t know until you drill down and learn what the issues are for customers.
3.) Know Where to Direct Precious Advertising Dollars
From startup businesses to legacy brands, knowing where to direct your advertising budget always makes fiscal sense. Market research studies can identify which channels to reach your intended audience and which messages or images they’re most likely to notice. Whether your brand engages in traditional marketing campaigns (television, radio, etc.) or online, knowing where your customers are and how to reach them ensures you’re not wasting time and money in your advertising efforts.
4.) Improve Goal Setting for Your Business
Goal setting often includes increasing sales or customer reach. These are worthy goals for any business, but are unrealistic without deeper insights into your target audience. Is there room for growth, or is your market saturated? How is your competition perceived within your market? Are you missing out on certain demographics because your product isn’t culturally sensitive? All these questions, and more, can be answered by conducting market research. Reaching certain goals is hard enough, but without a roadmap, it’s near impossible!
5.) Fact-Driven Strategic Planning
Anyone who has read the book, Thinking, Fast and Slow by Daniel Kahneman knows that humans are notorious for our cognitive biases. There are hundreds of examples where a business leader followed a hunch, when really s/he should have followed the facts. Market research is a sure way to separate hunches from facts. When making strategic plans for your business, you want your information to be factually based. It isn’t uncommon for a business team to have a supposition that is refuted by conducting market research. Market research provides your organization with facts helping your teams make informed decisions.
There is an oft-quoted saying, “The best time to plant a tree was 20 years ago. The second best time is right now.” Substitute ‘conduct market research’ for ‘plant a tree’ and this quote applies to any business, large or small.