Market Research For Small Business

By understanding your customer’s wants, needs, and concerns you can better address their needs. And when you can clearly demonstrate you can solve your customers’ problems or answer their questions, you will be poised to turn the average transaction into an opportunity for greater lifetime value. When customers see what you have to offer beyond price, they are more likely to come back again and again. Market research is the process by which you build knowledge of customers’ wants and needs. Market research can tell you where customers shop in the normal course of doing business. Market research can show you what information sources customers use before they contact you.

The best place to start your market research is online. There are a number of great sources of information, but the most important thing to remember is that the data need to be current. In many cases, even one or two years behind can make a big difference in sales.

Market Research Tips for Small Businesses

So, how does a budding entrepreneur make this happen? Market research.

Market Research Methods: Getting Started

In an attempt to avoid negative feedback, many business owners avoid conducting this crucial step. They are positive that their product is great just the way it is, and they have no reason to change it.

Other budding entrepreneurs may bypass market research because they think it is too expensive.

Primary Research

primary market research small business

Yet your primary research is the foundation of building successful campaigns. By focusing on specific groups via phone interviews, surveys, and even face-to-face contact, you gain invaluable insight into what your target audience wants as well as into consumer psychology. It also helps increase brand awareness. Primary research is also useful when creating buyer personas.

Primary research can be divided into two categories: exploratory research and secondary.

Exploratory research is focused more on potential issues within your campaign and less on actual measurable consumer trends. Performed as the first step in market research, it usually encompasses only small groups of people.

Specific research follows exploratory and dives headfirst into possible problems and opportunities that your brand identifies. During this phase, research is more focused on specifics as opposed to generalized ideas.

Secondary research would also include industry news, trend reports, and marketing statistics that you already have about your company.

How to Perform Market Research: A 5-Step Method

Performing research doesn’t need to be difficult; however, it does need to be complete and inclusive of specific information.

Create Buyer Personas

Learning how your customers make their buying decisions is important; however, it’s essential that you know who they are. Knowing who your buyer personas are is just the beginning during your research of the primary market.

Buyer personas are fictional representations of your perfect customer. Personas help you develop your strategy, streamline your communications, and visualize your ideal audience.

Some key characteristics that you should focus on including in your business persona are:

  • Gender
  • Age
  • Job titles
  • Family size
  • Income

Basically, the idea is to help you use your persona as a guide when you experience real life customers. For all you know, your business may end up having multiple personas and that’s perfectly fine! Just be certain that you’re being thoughtful about the persona you’re planning to optimize. It’ll make things easier when you’re planning campaigns and content.

 Identify Market Segments

market research surveys

Now that you’ve learned about buyer personas, it’s time for you to find a sample of your ideal customers. Doing this is going to help you understand the customer’s buying habits, challenges, and characteristics.

Your customers should be people who recently bought something or who have decided not to make a purchase.

Here are some ways you can meet with them:

  • Create an online survey
  • Conduct phone interviews
  • In-person through the means of a social group

An important factor to keep in mind when choosing who you wish to engage with is starting with characteristics that apply to your personas. Not to mention, it will help you conduct your marketing research.

Tap into Your CRM

Your current small business CRM is hopefully filled with prospects and customers you can connect to for market research. With solid data, you can segment your contacts by their contact status, title or position, and interests to get the feedback you need about your products and services. With a well-organized CRM, it’s easy to pull relevant lists of contacts and email them for feedback, such as a survey or interview request.

Leverage Your Contacts NPS

Here’s a tip for helping you slice and dice the feedback you receive from your customers:  leverage their Net Promoter Score (NPS). The NPS helps companies gauge the loyalty of their customers on a scale from 1 to 10 by asking one simple question:

How likely are you to recommend us?

  • Customers who give you a 9 or 10 are your promoters. They are raving fans of your business, and you can leverage them for referrals, driving growth.
  • 7s & 8s are your passives.  They are satisfied with you, but aren’t going to go out of their way to promote your business, and are susceptible to competitors.
  • Detractors give you a 0 -6. These customers are less than happy with your service.  These are the grumblers who actually detract from your business because they have negative things to say.
net promoter score

Who would you rather please? The detractors who may never be happy with your products and services because they aren’t a good fit to begin with?  Or your promoters – your most loyal customers who are responsible for generating more new business?

When gathering data from your customers, it helps to take NPS into account, so you can ensure you’re listening to feedback from your promoters, helping you to attract more raving fans who are just like them.

Conduct a Survey

Use a survey tool like, SurveyMonkey or SurveyGizmo, to collect insight from your audience. With these tools, you can ask specific questions about your audience’s challenges and solutions. You can also ask qualifying questions upfront to help segment responses and make sure you are getting valid insights. Even better, you can use skip logic, or branch logic, to guide survey takers down a specific path.  For instance, you can ask “Are you a current customer?” to separate your actual customers from prospects in your audience.  Then, you can ask your customers “How likely are you to recommend us?” to get their NPS, while skipping that question for those who aren’t customers.

When it comes to surveys, the more responses you receive from your audience, the more statistically valid the responses are.  So how many people do you need to survey to get solid feedback?  SurveyMonkey has a great chart to help you gauge how big of a group you should survey.

So, what if you need 300 survey responses to be statistically valid, but only have 100 contacts who have completed your survey?  SurveyMonkey and SurveyGizmo also offer the ability to purchase survey responses from an audience similar to the one you’re trying to target. It’s affordable for small businesses – and completely worth it in the quest to get your product-market fit right on the money.

Increase Engagement

A lot of research firms in marketing have groups of people that they can pull from whenever they need to perform a study. The fact of the matter is a lot of individual marketers are unable to afford that kind of luxury. However, that’s not exactly a terrible thing. All the time you’re going to spend recruiting people for the study may lead to having better participants.

Below is a brief recruiting guide to make things a little easier:

  • Bring up a list of people who have made a recent purchase
  • Have a list of those who made an active evaluation of your product, but haven’t made a purchase
  • Ask for participants via social media
  • Try to leverage your network
  • Make sure you have an incentive

Ask Questions

One of the best ways to get everything out of your conversations is to prepare your questions in advance. Try creating a discussion guide for everything such as a social group, surveys, online and phone interviews. This will ensure that frequently asked questions are covered and you can use the extra time wisely.

It’s worth mentioning that this should not be a script. All your discussions are better when they’re conversational and natural.

 Know Your Competition

Figuring out your potential competitors starts off your research of the secondary market. With that said, there’s a lot more than just one company against the other. In some cases, a fraction of a company may compete with another company’s service or products, despite the fact that this company puts more effort in a different area.

Even if you think you know your target audience, conducting market research can be an eye-opening experience. Consumers of today are more powerful than ever. They know what they want and usually aren’t willing to settle for less. And why should they? With so many options out there, the world is their oyster.

Conclusion

By understanding your customer’s wants, needs, and concerns you can better address their needs. And when you can clearly demonstrate you can solve your customers’ problems or answer their questions, you will be poised to turn the average transaction into an opportunity for greater lifetime value. When customers see what you have to offer beyond price, they are more likely to come back again and again.

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