What is market research? Why is it so important to success in small business?
These are important questions to answer for any small- and medium-sized business (and indeed large companies as well). Unfortunately, it is not at all uncommon for small business market research to be ignored or not completed fully. This often spells the downfall of small businesses, as they are out of touch with the wants and needs of motivated buyers.
The Danger of Assumptions
Many small business owners assume that they understand what their customers want and what motivates them to buy. But without accurately testing the market you can never be sure. There is a danger involved in assuming that you know what your client-base wants and what motivates them to choose one supplier or provider over another. The danger is in missing your target audience and not connecting with them. That loss of connection means a loss of business or sales, and for many, ultimately business failure.
Rather than assume you know what your core target group wants, be sure! The only way to be sure is to test your market through thorough market research, and find out precisely how to incite them to action, and excite them about your business.
What is Market Research?
One of the greatest reasons small businesses fail to effectively complete market research is that they are unsure about what it is.
In simplest terms, market research is finding out what people want and will buy (whether that be services or goods), and how much they will pay for it. Thorough market research consists of testing and evaluating the market through different means to determine the demand, usefulness and likelihood of acceptance of a product across different demographics. It answers very specifically who will purchase a product or service based on characteristics such as:
- other variable characteristics
Armed with this data, business owners can very narrowly target their audience and clientele, and thus can commit resources, product development and advertising to connecting with this audience and very specifically serve their needs. Market research helps small businesses plan for every aspect of promotion and sales, including:
- advertising and marketing
- product features and development
- improvements and modifications
A common mistake made by many small business owners is that they may become too personally ‘attached’ to their ideas. It is essential to maintain objectivity in marketing matters and use the research to support the most effective strategy.
Understanding market research and its importance is the first step towards taking full advantage of it. The next step is to learn how to perform it effectively and accurately so that you can capitalise on this very important business tool. Know where market research falls into your business strategy, and learn how to make the connections with your core group that will translate into business success.
Here’s to your success in business,