Market Research – What’s the point!
By Martin Russell
We’re going to have a look at some of the ways Market Research can help your start up or ongoing business be more effective. Show of hands – Who loves Market Research? (Not many) Ok another show of hands, who loves going on holiday? (A lot more this time) Did you look at brochures, travel websites, review sites, prices, travel times, facilities? You’ve conducted Market Research to make the best decision, on the information you have, to choose a holiday destination you’ll enjoy. So why not give the same attention to something that is going to enable you, to keep taking those holidays!!
Why Market Research?
Before you go on your business journey, doesn’t it make sense to see if there is a demand for your product or service? It can also help to clarify if there is a necessity or a desire for it. Decisions on pricing are absolutely key. So you need to be mindful that your price is optimal and that it’s not too low, perhaps giving the impression that your product/service is inferior, or too high, so you price yourself out of the market.
Information you obtain on potential demand can help you to be realistic with the forecasts and the quantity you expect to sell. Therefore giving you a clearer idea of stock or supplies you may need and your aspirations for sales (revenue), so you can see if it will cover all business costs (overheads) and potentially generate a profit.
Not all promotion activities are appropriate. Market Research helps you to tailor you promotional activities to those that will be most effective at getting your customers attention. Therefore making your precious resources of time and money more effective.
The Components of Market Research
Research myself! This should be a given. Be honest and recognise where you might need help in your business or some development. You will have strengths, so embrace them. Where there are weaknesses you have a choice. Either develop the skills you need or outsource. Development takes time so make sure you can commit to it. Outsourcing costs, so make sure there’s going to be enough money in the business to cover it.
You’ll want to know the product or service you are providing inside out. As a minimum you will want to be able to explain the product/service description, what’s the product/service purpose and what is it’s benefit or Unique Selling Point is.
Do you know what your customer characteristics are? We are creatures of habit and knowing who your customers are can gain a valuable insight into their consideration for buying services and products and what is important to them. For example, where are they? What does your customer consider as important when purchasing? Is it value for money, luxury, convenience or availability? Are your customers more likely to be from a particular gender or age etc? Do they buy everyday experience or more infrequent prospect? This can be useful information to identify the key times to engage with your potential customers.
When researching competitors, hope that you find some! If there are none, it can be an indication that there is no demand. Competitors that are trading and established, have probably been doing something right, so they are worth learning from. However no set up is perfect, so if there is something they don’t do that you can offer or do better, then that could be you way into your customers hearts! Not all competitors are a threat, but can possibly offer an opportunity, as lots of businesses thrive on mutual benefits of working together. If you think about opportunities and threats being two sides of the same coin, risk, you’ll see that there is sometimes not much difference and that an opportunity can become a threat and vice versa.
When you require suppliers for you product or service there is always a risk to your supply chain. Your customer will not be interested in your supplier letting you down, just that you are letting them down, so choose carefully. Check to see what back up options you have if there is an issue. Be very clear to the terms and conditions you will be agreeing to, especially what your rights are for returns and when payment is expected.
Look at the Big Picture Research information you have gained from other sources. What is being reported in the media? Information from Trade Publications. Changes in the law, which gives rise to a need for compliance or can be an opportunity to increase the sales of your products or services you deliver. What is happening in the global/UK economy? Also be aware that the information needs to have some authority and credibility to be useful. And just because information may seem gloomy say an economic downturn, there are lots of businesses that have thrived from a Big Night In!
Market Research Never Stops
Market Research is the starting point to a wider process. By following a process the intention is to improve effectiveness and improve results, or at least be able to recognise where improvements are required. It is also continuous process not just when starting out, but integral to the continuing effectiveness of your business.
Starting off with a process can be painful in the beginning, however over time can become second nature and quite intuitive.
Before You Start, Benchmark!
Assess where your sales are currently as a baseline. You’ll want to measure against this information when you are considering the effectiveness of your marketing activities.
Decide on your preferred activity based on market research e.g. the right message, in the right place in the right medium. Have a way of measuring all enquiries and sales so you can see where these outcomes came from as regards your activities. It can be a simple as asking your customers, how did you hear about us?
Keeping on Top of your Investment
Keep an open mind on the results and recognise if something is working or not. If you keep on putting in the same ingredients, you’ll keep getting the same cake!
Therefore you’ll want to consider the sales in the specified time of your preferred marketing activities, against your baseline measurement.
From your new sales baseline you’ll want to account for the cost of your marketing activities undertaken, which should have paid for themselves and also generated enough revenue for the next potential investment for next marketing activities, based on……….yes you’ve got it your Market Research!
This cover the headlines of what your Market Research should be achieving, in terms of it does what it says on the tin, you research should help you to market more effectively. I sincerely hope it does.
Do you need help with your business planning and marketing planning? Get in touch with us and see how we can help you.