Knowledge is power. However, not all knowledge is equally as useful. As a small business with limited funds on your hands, you need actionable information which you will be able to use to your advantage. You also need to uncover marketing techniques that give you the optimal ROI, as well as the business practices your customers will have the best response to. All of this can be reached through a good market research effort. Here are several reasons why this is important for a successful business strategy.
Investing money in your marketing is great, yet, without proper research, you don’t really know which investments are paying off. John Wanamaker, one of the pioneers in marketing, once said that half of the money he spends on advertising is wasted, but that he can never know which part. With present-day marketing research methods, this is no longer completely true. In the digital world, it’s much easier to tell where someone comes from, for how long they lingered on your page, and which categories they looked at. Later on, this raw data can be processed through adequate business intelligence software, and tailored to a campaign that gives you a maximum out of every single cent you invest.
Recognizing the problem
Making a mistake as an entrepreneur is something that can become quite costly in the long-run. You see, if this mistake goes unnoticed, there’s a chance that it will keep making deficit for years to come, or even grow in size. This means that by ignoring a hiccup, you can turn a minor problem into a major one and spend a fortune later on to repair something that you could have fixed easily if you just had had the right diagnostics on your side. This is particularly important when it comes to something that’s brand-related. For instance, a poor reaction to the video on your homepage can ruin your conversion rate and even diminish your rank (which heavily depends on the average visit duration).
The next thing you need to understand is that the market research offers you with nothing but cold, hard facts. Sure, some methods are more preoccupied with only answering the question “what” and not focusing on “why,” however, you can’t get all the answers you need by utilizing a single marketing method. For instance, you can use your analytical software in order to track the behavior of the audience on your domain, but when it comes to a bit more detailed feedback, you should probably consider using paid surveys online to get the answers you need.
A safer way to implement innovation
In order to maintain relevance in a certain market, your business has to evolve. Nevertheless, not every change is 100 percent safe. Sometimes, by altering a seemingly minor factor of your image, you will make your brand barely recognizable, which will cause an outrage amidst your most loyal customers. A/B testing may seem like an adequate way to check this before doing anything radical, but the only way to really know how your fan base will react is to do solid market research.
A stronger business plan
Market research will help you devise a solid business plan by validating your ideas and making sure that the market is ready to receive them. On the other hand, you can’t afford to stop here. You need to proceed to test the market in order to see how it reacts to your brand long after you’ve launched. Predictive market research is more than necessary, but it can only take you so far. In other words, tailoring your business strategy around your market research is more of a process than it is a project.
Prospecting your competitors
Sometimes, your competitors will be heads and shoulders above you, so, instead of trying to beat them at their own game, you might want to look into what it is that they do better, and try to learn from them. They don’t even have to be your direct competitors. After all, one of the best ways for small businesses and startups to grow and expand is to emulate the top dogs of the industry. Moreover, by doing extensive research, you might just be able to discover the service or feature that no one else is offering, but your audience is desperately looking for. In this way, you’ll make a major breakthrough in your industry.
Understanding different types of your users
Finally, regardless of how specific your product is, not everyone is going to buy it for exactly the same reason. For instance, an end-user is someone who really intends to use your product as regularly as possible, while a ‘savvy’ purchaser might care more about your product’s position in the market. Either way, understanding different types of your users is important in order to make your business more appealing in their eyes.
At the end of the day, while creating good market research may be your top priority, making all of this work is far from simple. For instance, you need to know which questions to ask; how to find the most cost-effective research alternatives and decide whether to do the research on your own or to look for some help. This, however, is a story for some other time.