How to Do Market Research?
In the current market, consumers hold significant decision-making power. They have the ability to independently research products and services and make purchase choices. Instead of relying on sales representatives, they often seek referrals or read online reviews. Considering this shift, it is crucial to adapt your marketing strategy to align with how consumers research, shop, and buy. To achieve this, a thorough understanding of your buyers, target market, and the factors influencing their purchasing decisions is essential.
"What is market research?"
Market research involves collecting information about your target market and customers. Its purpose is to assess the viability of a new product, refine existing products, or gauge brand perception to ensure effective communication of your company’s value proposition.
"Why do market research?"
Market research enables businesses to understand and cater to their target audience effectively. By grasping customer problems, preferences, and desired solutions, companies can tailor their products or services accordingly. Market research also aids in devising market development strategies. It provides insights into customer behavior, competitor analysis, industry trends, market composition, purchase influencers, consumer attitudes, demand validation, untapped opportunities, and pricing perceptions. Conducting market research with a larger sample size eliminates biases, enables better decision-making, and helps businesses gain a comprehensive understanding of consumer attitudes and preferences.
Market research can be extensive, encompassing both qualitative and quantitative approaches based on the specific studies conducted and the desired insights about the industry. Qualitative research focuses on public opinion and assesses the market’s perception of existing products. On the other hand, quantitative research analyzes data and identifies trends derived from public records.
Two main types of market research are primary research and secondary research, which provide actionable information about products. Now, let’s explore these two types in more detail.
Primary research involves gathering firsthand information directly from the market and its customers. It is valuable for segmenting the market and developing buyer personas. Primary market research typically falls into two categories: exploratory research and specific research.<br>
Exploratory Primary Research
This kind of primary market research is less concerned with measurable customer trends and more about potential problems that would be worth tackling as a team. It normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
Specific Primary Research
Specific primary market research often follows exploratory research and is used to dive into issues or opportunities the business has already identified as important. In specific research, the business can take a smaller or more precise segment of their audience and ask questions aimed at solving a suspected problem.
Secondary research involves utilizing existing data and public records to derive insights. This includes sources such as trend reports, market statistics, industry content, and your own sales data. It is especially beneficial for competitor analysis. Secondary market research can be categorized into three main types:
Public Sources: These readily available sources, often free, form the primary layer of material for secondary research. Examples include government statistics, such as those provided by the U.S. Census Bureau and the Bureau of Labor & Statistics, offering industry information at a national level.
Commercial Sources: Market reports compiled by research agencies like Pew, Gartner, or Forrester fall under this category. Accessing these reports typically incurs a cost due to their portability and distribution.
Internal Sources: Often overlooked, internal sources are valuable for market research. This includes your organization’s existing market data, such as average revenue per sale, customer retention rates, and historical data on accounts. Utilizing this data helps draw conclusions about current buyer preferences.
Understanding these overarching categories of market research, let’s delve into more specific types of research that you might choose to conduct.
- Interviews
- Focus Groups
- Product/ Service Use Research
- Observation-Based Research
- Buyer Persona Research
- Market Segmentation Research
- Pricing Research
- Competitive Analysis Research
- Customer Satisfaction and Loyalty Research
- Brand Awareness Research
- Campaign Research
Interviews provide the opportunity for face-to-face discussions, both in-person and virtual, allowing for a natural conversation flow and the observation of interviewees’ body language. Through interviews, you can gather insights about your target audience, helping you create buyer personas. These personas encompass details such as age, family size, budget, job title, work challenges, and lifestyle aspects of your ideal customers. Armed with these buyer profiles, you can shape your marketing strategy, including product features and website content, to effectively cater to their needs.
Focus groups involve a select group of individuals who are chosen to test your product, observe demonstrations, offer feedback, or respond to specific inquiries. This form of market research is valuable for generating ideas regarding product differentiation and identifying unique qualities that set your product apart in the market. You can seek input from the focus group about your services, showcasing examples, and utilize their feedback to enhance and improve these offerings.
Product or service usage research provides valuable insights into how and why your target audience utilizes your product or service, as well as their interaction with specific features. It also helps assess the usability of the product or service for your intended audience. According to a 2020 report, usability testing received the highest rating (8.7 out of 10) in terms of usefulness for gaining user insights, surpassing digital analytics (rated 7.7) and user surveys (rated 6.4). Conducting this type of market research allows you to understand how your audience engages with your offering and make informed improvements based on their usage patterns and preferences.
Observation-based research enables you to observe how your target audience interacts with your product or service. By closely watching their actions, you can identify successful user experiences, potential obstacles they encounter, and areas where improvements in usability can be made. This type of research provides valuable insights into the user’s perspective, allowing you to enhance the overall user experience and optimize the usability of your offering.
By conducting buyer persona research, you gain a comprehensive understanding of your target audience, including their demographics, challenges, motivations, and expectations. This valuable insight helps you align your product or service offerings with their needs, customize your marketing strategies, and effectively communicate the value your business provides to meet their specific requirements.
Through market segmentation research, you gain the ability to classify your target audience into distinct groups based on unique characteristics. This enables you to identify effective approaches to address their needs, understand their challenges and expectations, gain insights into their goals, and develop tailored strategies to effectively engage each segment. By understanding the diverse segments within your target market, you can optimize your marketing efforts and deliver personalized experiences that resonate with specific customer groups.
Pricing research gives you an idea of what similar products or services in your market sell for, what your target audience expects to pay — and is willing to pay — for whatever it is you sell, and what’s a fair price for you to list your product or service at. All of this information will help you define your pricing strategy.
Conducting competitive analyses provides valuable insights into your market and industry’s competitive landscape. It enables you to understand successful practices within your industry, identify customer preferences for products similar to yours, determine key competitors to outperform, and strategize ways to differentiate yourself effectively. By comprehensively assessing the competition, you can stay ahead of market trends, meet customer expectations, and establish a strong competitive advantage.
By conducting customer satisfaction and loyalty research, you gain insights into strategies for encouraging repeat business and understanding what motivates customers to engage further (e.g., loyalty programs, rewards, exceptional customer service). This research enables you to identify effective approaches to enhance customer satisfaction. If you have a CRM system in place, consider utilizing automated customer feedback surveys to facilitate this process.
Through brand awareness research, you gain insights into your target audience’s familiarity and perception of your brand. It provides information on the associations they make when thinking about your business and their understanding of your brand’s essence.
Campaign research involves examining your previous campaigns to assess their effectiveness among your target audience and existing customers. It involves experimenting with different approaches and analyzing what resonated with your audience. By understanding what worked well, you can incorporate those elements into future campaigns and focus on delivering what matters most to your audience.
Having familiarized yourself with the various categories and types of market research, let’s now explore the step-by-step process of conducting market research.
- Define your buyer persona.
- Identify a persona group to engage.
- Prepare research questions for your market research participants.
- List your primary competitors.
- Summarize your findings.
Prior to delving into the purchasing behavior of customers within your industry, it is crucial to have a clear understanding of their identity. This is where the usefulness of buyer personas becomes evident. Buyer personas, also known as marketing personas, are fictional yet representative profiles of your ideal customers.
Buyer personas are invaluable tools that enable you to visualize your target audience, streamline your communication, and shape your overall strategy. When creating a buyer persona, it’s essential to consider key characteristics such as age, gender, location, job title(s), family size, income, and major challenges. The purpose is to utilize the persona as a guide for effectively engaging and understanding real audience members within your industry. It’s possible that your business may cater to multiple personas, and it’s important to tailor your content and campaigns accordingly.
Now that you have identified your buyer personas, it’s time to select a representative sample from your target customers for conducting market research. This group should provide insights into their actual characteristics, challenges, and buying habits. It’s important to engage participants who have recently made a purchase or intentionally decided not to make one. Here are some guidelines and tips to help you find the right participants for your research:
Identify the right people: Focus on individuals who match the characteristics of your buyer persona. Aim for approximately 10 participants per persona, recruiting separate sample groups for each persona if necessary. Select individuals who have recently interacted with your business, ideally within the past six months.
Gather a mix of participants: Include customers who have purchased your product, those who have purchased a competitor’s product, and individuals who have decided not to make a purchase. This diverse mix will provide a balanced view of your market.
Methods for participant selection: Pull a list of recent customers from your CRM system or work with your sales team to identify suitable accounts. Similarly, gather a list of customers who were actively evaluating your product but didn’t make a purchase. Consider reaching out to followers on social media who decided not to buy from you or leverage your personal and professional network to find potential participants.
Incentives: Offer incentives to motivate participants to spend 30-45 minutes on your study. These incentives can include exclusive access to content or a simple handwritten “thank you” note upon completion of the study.
By following these steps, you’ll be able to engage the right participants for your market research and gather valuable insights for your business.
To ensure productive conversations during market research, preparation is key. It is important to create a discussion guide for focus groups, online surveys, or phone interviews. This guide will help you cover all the essential questions and make the most of your time. Keep in mind that the guide is not meant to be a script, but rather a flexible framework for natural and conversational discussions. Use an outline format for the guide, including time allocations and open-ended questions for each section. Open-ended questions are crucial in market research as they encourage participants to provide detailed answers and prevent bias. Here’s a general outline for a 30-minute survey with a B2B buyer as an example. You can adapt these talking points for in-person interviews or digital surveys using tools like HubSpot’s free online form builder.
Background Information (5 Minutes): Start by gathering basic information such as the buyer’s job title, length of time with the company, and some light-hearted questions to create a warm atmosphere. Additionally, ask about their team structure, job responsibilities, team goals, and the biggest challenge they’ve faced in the past year.
Awareness (5 Minutes): Explore how the buyer initially realized they had a problem that needed solving without focusing on your specific brand. Ask about the challenges they faced, how they recognized the need for a solution in that category, and their familiarity with different options available.
Consideration (10 Minutes): Dive into the buyer’s research process for potential solutions. Inquire about the sources they consulted, such as search engines, websites, and people they sought advice from. Probe for details on their experiences, including the usefulness of the sources, specific search terms used, and their interactions with salespeople.
Decision (10 Minutes): Focus on the factors that influenced the buyer’s final decision. Ask about influential sources, criteria for comparing alternatives, vendors on the shortlist, and the pros and cons of each. Inquire about the individuals involved in the decision-making process and their roles. Understand the key factors that ultimately led to the purchasing decision.
Closing: Wrap up the discussion by asking about the buyer’s ideal buying process and how it differs from their actual experience. Provide an opportunity for any additional questions they may have. Express gratitude for their time and confirm their address to send a thank-you note or incentive.
By following this guide, you can conduct effective market research conversations and gather valuable insights from your participants.
Compile a list of your main competitors, keeping in mind that competition isn’t always straightforward. Sometimes, a division within a company may compete with your primary product or service, even if the company’s brand focuses more on another area. For instance, Apple is renowned for its laptops and mobile devices, but Apple Music competes with Spotify in the realm of music streaming services. From a content perspective, you might compete with a blog, YouTube channel, or similar publication for inbound website visitors, even if their products don’t directly overlap with yours. Similarly, a toothpaste company might compete with magazines like Health.com or Prevention on specific blog topics related to health and hygiene, despite the magazines not selling oral care products.
To identify competitors within your industry whose offerings intersect with yours, determine the industry or industries you are targeting. Begin with broader terms like education, construction, media & entertainment, food service, healthcare, retail, financial services, telecommunications, or agriculture. From there, create a list of companies that belong to the same industry as you. Consider the following approaches to build your competitor list:
Review industry quadrants on G2 Crowd: For certain industries, G2 Crowd’s industry quadrants provide a valuable starting point for secondary market research. These quadrants present companies positioned as contenders, leaders, niche players, and high performers based on user ratings and social data. G2 Crowd specializes in digital content, IT services, HR, ecommerce, and related business services.
Download market reports: Research firms like Forrester and Gartner offer market forecasts, both free and gated, annually. These reports provide insights into leading vendors within their respective industries. For example, on Forrester’s website, you can navigate to “Latest Research” and utilize various search criteria to find relevant material. Save these reports as valuable resources.
Utilize social media search: Social networks can serve as effective company directories when used appropriately. On LinkedIn, enter the industry term you’re interested in within the search bar. Under “More,” select “Companies” to narrow down results to businesses that mention this or a similar industry term in their LinkedIn profiles.
Identifying Competitors in the Content Space:
Search engines are essential tools for secondary market research in the realm of content competitors. To find online publications that compete with you, use the overarching industry term identified earlier and generate a list of more specific industry terms that align with your company. For instance, a catering business might identify as a “food service” company but also consider itself a vendor in “event catering,” “cake catering,” “baked goods,” and so on. Follow these steps:
Conduct Google searches: Run searches on Google using the industry terms that describe your company. Take note of the websites that appear, which could include product developers, blogs, magazines, and more.
Compare results with your buyer persona: Refer back to the buyer persona created during the primary research stage. Assess whether the content published by the websites you found aligns with what your buyer persona would be interested in. If it does, consider them potential competitors and add them to your list.
Look for repetition in website domains: After conducting several Google searches using your identified industry terms, examine the repetition in the domains of the websites that appear within the first two or three pages of search results. These websites are respected for the content they produce in your industry and should be closely monitored as you develop your own library of videos, reports, web pages, and blog posts.
By following these steps, you can identify your primary competitors and gain insights into the competitive landscape within your industry and content space.
f you’re feeling overwhelmed by your notes, we recommend identifying common themes that will help you construct a cohesive narrative and develop a list of actionable items. To simplify the process, consider utilizing your preferred presentation software to create a report. This will allow you to easily incorporate quotes, diagrams, or even call clips. While you can add your personal touch, the following outline can assist you in crafting a concise summary:
- Background: State your objectives and the reasons behind conducting the study.
- Participants: Provide an overview of the individuals you interviewed. A table format works well, enabling you to categorize groups by persona and customer/prospect.
- Executive Summary: Highlight the most intriguing insights you gained and outline your plans for addressing them.
- Awareness: Describe the common triggers that prompt individuals to begin their evaluation process. Incorporate impactful quotes whenever possible.
- Consideration: Present the main themes you discovered and delve into the specific sources buyers utilize during their evaluation.
- Decision: Paint a comprehensive picture of how decisions are truly made, including key influencers and critical product features or information that can sway a deal.
- Action Plan: Based on your analysis, identify several campaigns that can increase your brand’s visibility among buyers, both earlier in the process and with greater effectiveness. Provide a prioritized list, along with a timeline and the anticipated impact on your business.
- Lastly, let’s explore a resource that can help you consolidate all the aforementioned elements in a straightforward yet impactful manner—and the best part is, it’s free!
By following this structure, you can effectively organize your findings, extract meaningful insights, and develop a plan of action for your market research study.