Research is a key element for any business, no matter how big or small it may be. Connecting with your target market is the key to unlocking huge success. With that said, there are limits to the amount and types of research small businesses can actually dedicate to. Some of the advanced methods are reserved for large businesses while there are basics that everyone should be using.
This blog post is going to walk you through the three basic types of business research that all businesses should be implementing.
Make Sure You Answer the Right Questions
Before we go over the basic marketing research methods that all businesses should use, let’s look at some of the questions that you are going to have to answer. This is by no means a definitive list so just keep in mind that the goal of market research is to identify opportunities for growth.
- How many buyers are there for our products and services?
- What type of person is most likely to buy our products or services?
- Which of your competitors are those consumers using right now?
- What are they missing from that product or service?
- How much would those consumers be willing to pay for it?
- Is the market already saturated?
Now let’s move onto how you can actually answer those questions.
Marketing surveys are the most popular form of business research in the world. We are asked to complete surveys so often that we have become desensitized to it. There is a reason every legitimately successful business uses surveys – they work! Surveys allow you to gather a vast amount of data for a very low cost.
Follow-up surveys are sent directly to customers who have made a purchase. We see this method used in retail, at restaurants, and online. Basically, a survey is set up online ahead of time. Then you send that link to customers when they make a purchase. Retail and restaurants actually print a link to the survey directly on receipts while online businesses tend to send emails linking to the survey. In both cases, customers are usually rewarded in some way for filling out this survey.
Focus groups are a more refined approach to business research. They usually consist of small groups of people who fit the profile of your ideal customer. The goal of a focus group is to discuss a product or service, taking notes as each person gives their thoughts.
Focus groups are quite invaluable because it gives you a unique perspective about your product or service. You get real-time feedback and are able to engage in discussions about ways to make improvements.
Qualitative Research Interviews
Let me start out with a short story. There is this amazing little restaurant that I go to quite often. The owner will occasionally greet customers at the door and actually serve people, engaging in small talk while asking them how they are enjoying their meal. He is actually engaging in a form of qualitative research in the world. His small business thrives because he understands exactly what his customers expect.
Qualitative research is similar to focus groups, but done as an open-ended one-on-one interview. This form of research is something you absolutely should be doing. Of course, online businesses can adapt to the digital age by personally emailing random customers.
Competitive analysis is another vital piece of the research puzzle. This is an area that so many new entrepreneurs forget to research. By looking closely at your competition, you can spot areas for improvement. The biggest benefit of using competitive analysis is to determine whether the marketplace has a big enough opportunity for you to enter or if you should carve out a new niche somewhere else. For example, YouTube gaming channels are considered the most difficult niche for YouTubers to find success in because there are just so many of them. But you could probably carve out your own niche within that overall market to find success.
Of course, YouTube channels are only being used as an example of oversaturated markets. Your business will likely follow a different path. Even so, you should always pay close attention to what your competition is doing. Competitive analysis takes on many different forms.
- Keyword Analysis
- Social Media
- Financial Information
- Secret Shopping
Beta Testing / Field Trials
Field trials are usually done in relation to the medical field while beta testing is reserved for technological products. Testing is vital for revolutionary new products because it helps to work out the bugs before a full release. Of course, there are a lot of different types of testing. Let’s look at a couple of examples.
Before Google Chrome released its first Chrome Book, they send out a limited number of copies to beta testers.
A business discovers that their website needs to be updated so they set up two different websites. They send half of their email list to the first website and the other half is sent to their second website. Then they look at the numbers generated from each website.
Both of the examples above allow each business a way to test their new designs before dropping money on fully developing their final product. It’s easier to make changes before production than after production.
Which Form of Business Research Works Best?
There are pros and cons to each type of research we mentioned. Surveys are powerful but they are usually limited to yes or no questions, anything more and people will not fill them out. Focus groups can be difficult to build for small businesses, but they provide valuable information. Qualitative research interviews will eat away at your valuable time, but they provide the absolute best insight into your business.
Is your business using all three of these forms of research? If not, then you are probably at a disadvantage with your competition.
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A startup consultant, dreamer, traveller, and philomath. Aashish has worked with over 50 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.