4 key ways market research can help your small business
Many of us have sighed at The Apprentice contestants disregarding the opinions of their hastily put together market research groups and losing the task in the boardroom as a result.
And with busy lives to lead, it is easy to get frustrated with being phoned or stopped in the street to answer market research questionnaires that promise “this will only take five minutes”.
But what actually is market research and how can it help your small business grow?
We asked Alice Broomhall – London-based market research consultant – to give us the low down on why market research is so important for every business.
Market research is vital for success
Market research is in short, the practice of understanding the market for your business. Usually by asking questions to – or observing – your customers, your target market and/or your competitors. Pretty important stuff.
How can market research help your business?
There are four key areas in which market research can – and should – be helping to improve and develop your business:
1. Your product or service
- While you know it’s a fantastic idea, how good is it really? Is the quality high enough? Is the location right? Is there a genuine need for it in the market?
- Is your chosen price point giving you the optimum balance between profit and size of customer base?
- Are you sure that any future developments you have planned for your business are going to be popular with your customers? What direction should your business take?
2. Your brand
- Have you already developed a strong brand and worked out how to consistently get your brand identity out there? How do you know how well it is working?
- If you haven’t yet decided on the direction your brand and visual identity will take, how do you decide which road to go down? Which will have the greatest impact on your target customers?
- Do your customers and potential customers know what your brand stands for? Do they recognise your brand? Would they remember it should someone ask them for a recommendation?
3. Your customers and potential customers
- Who are they? What is their demographic profile? What is their current purchase behaviour in your field?
- How much will they pay, and how often?
- What do they think of your business? How satisfied are they with your product or service, and what improvements would they like to see?
4. Your competitors
- The competitive arena is much larger than it used to be – it’s not just local businesses any more. Do you know who your competitors are?
- What do they do better than you? What do you do better than them?
- Which competitors do your customers and potential customers use or aspire to use?
Market research can turn a good business idea into a great business!
If the answer to any of these questions is “No”, then it’s time to get out there, talk to your customers and potential customers, and do some market research! It doesn’t have to be expensive or particularly time consuming, but it can help make the difference between a good business idea and a great business.
Alice Broomhall is a freelance market research consultant specialising in helping start-ups and small businesses understand their customers and develop their services. Before going solo she spent twelve years working for large, international market research agencies, covering everything from helping banks to develop new business banking services, to testing car insurance advertisements, to evaluating how parents choose toys for their children. She loves being out in the park with her two daughters and in her spare time likes to buy, and renovate, properties.