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EASY SMALL BIZ MARKETING – #3 Why Bother With Market Research?

January 7th, 2013

The more research you do, the better the chances of your business being successful. Why? Put very simply – if you’re trying to sell something to people, they must want it and be prepared to pay for it from you and not your competitors.

I think some small business owners are put off by the idea of Market Research because it sounds jargony, time-consuming or costly. Also some think Market Research is only relevant when starting up a business. Well it certainly pays to keep up with it regularly. In my experience many people ARE doing their own Market Research but they may not be calling it that. It doesn’t have to be formal, using questionnaires or consultants. Every time you talk to a customer about what he or she wants, or chat with a supplier or read your local or industry news, you’re conducting market research.

It’s worth checking that what you’re doing is covering the 3 main areas of research:

1. Knowing Your Customers
You need to know who specifically is going to buy from you (Your Target Market) and what they want.
Using the fictional example of our POSH PETS business, our customers will obviously be pet owners with a significant disposable income. Information from and about your customers also helps to maintain and improve your customer service, and to guide your efforts in developing new products and/or services.There’s a new post coming soon with more information on Knowing Your Customers, which will include details of where to find your customers and how to market directly to them.

2. Knowing Your Competitors
You need to know who else is out there locally or on the internet, offering a similar service or product to you. This isn’t always obvious. In the case of POSH PETS, you may think that there aren’t many retailers of luxury pet items but the lower-cost pet suppliers would also be a competitor. Keeping up with what your competitors are offering helps to to stay one step ahead and offer your customers something more attractive. It can also give you ideas for improving your products and/or services.
A new post is coming soon with more detail on this step.

3. Knowing Your Environment
It also pays to be aware of anything that may be on the horizon that might affect your sales. In particular economic, social, and political forces that shape business. Gathering information about the environment allows you to respond to particular trends or events that impact your small business. Anything that will impact on your business, you need to know about. For example keeping up with the latest technological and IT news is essential if like us you are a software developing company.

There are 2 ways of researching. Firstly by carrying out your own research, asking potential customers questions or phoning or visiting local competitors (Field Research). Secondly, by reading information collated by others in magazines, newspapers and on websites related to your industry (Desk Research).

Why not use a grid like this to help you make a note of any of your findings and keep it handy in the coming months?

CUSTOMERSCOMPETITORSENVIRONMENT
Info Gathered By Me
Published / External Info

How do you keep in touch with what your customers think and what your competitors are up to?

You may be interested in the other articles in our EASY SMALL BIZ MARKETING series:

Intro – MARKETING CHECKLIST
#1 – MARKETING BASICS
#2 – SETTING GOALS

  1. Mike
    January 7th, 2013 at 21:46 | #1

    If you are a product developer, one important aspect of understanding your customers is not simply talking to them but observing them using your product under realistic circumstances. What people do most frequently with your product, or what they’ve learned to work around, won’t always come out in a conversation – what people say and do are often different things.

    When a customer asks for a feature they will often ask for their solution to a problem they’ve encountered. It usually takes further investigation to work out what the original problem or difficulty was that sparked the request. Knowing the underlying cause for the request may let you innovate a better, more useful solution than that requested by the customer.

    • January 8th, 2013 at 11:51 | #2

      Hi Mike. Yes so true, when asked what the problem is we often reply what we think the solution is! Thanks for sharing that. V useful.

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