So you want to do market research. Well, you’ve come to the right place. Today I’m going to break down the two major types of market research, the pros and cons of each, and how you can best put them to work for your business.
The reasoning is elegantly simple: you want to sell more products or services, so find out what your customers are interested in. It’s also much more complicated than that, but understanding WHAT market research is starts you on the path to HOW you can use market research to help your business. Let’s get started.
Why are we talking about secondary marketing research first? It’s counterintuitive, I know, but trust me. There are a lot of differences between primary and secondary research, but for now let’s focus on this: big picture vs small picture. Let’s start with the big picture.
In short, secondary research is anything you can get your hands on. Statistics of the larger market, sales data for your company or others, industry trend reports. Basically anything that is in the public record. What does this get you?
Well, for one, it’s a great way to scope out your competitors. What are they doing well? Can you emulate that? Maybe you can do it better. What are they doing wrong? Are they not listening to the industry trends? Maybe they are seeing a steady decline in the sale of item A because item B is much more popular nationally. They would never know that, but you do.
Secondary market research can also help you make predictions. Let’s call them educated guesses. Where is the market headed? What is it moving away from? All of this can be found in these resources.
Now, let’s talk about where you can find these sources. The government regularly publishes marketing data, so check out the U.S. Census Bureau website for information about your specific industry. Other sources on the website can offer good information, but make sure you are working from an accredited source with lots of data and references. Anybody can put statistics on the internet, so go for well-known, trusted sources like Business Insider or Bloomberg.
You can do all of this without spending a penny. But, if you want more comprehensive data that may not be publicly available, you can purchase market reports from sources like Nielsen and Gartner. If you have the money to invest, you should. Naturally you will be getting more data and insights from a purchased market report, but that does not mean the free sources are not reliable. It’s all about the source.
The last thing you want to look for here is the data you already have. Look back into your history: what patterns emerge? Are you struggling to retain customers? Or maybe your clients stick around for life, but they purchase infrequently or in small amounts. These are important conclusions you can draw from your own data, but you won’t know until you look.
Speaking of your customers...
Primary market research is a snapshot of your business in particular. Secondary market research shows you the bigger picture, but your customers could be entirely different than the national averages. That’s why it’s important to look closer as well.
Okay, you’re saying, what am I supposed to do, quiz my customers when they walk in the door? No, but also yes. You don’t have to stop every person who makes a purchase, but asking your customers their thoughts is an invaluable source of information for the business owner.
Things like surveys or market testing or focus groups can be a great way to better understand the psychology of your specific customer. I don’t have to tell you why that’s important. With this kind of information you can figure out what products or services are resonating with customers, what issues your customers are having, and where you can improve.
Once you’ve done that, which we call “exploratory” research, you move into “specific” research. They are exactly what they sound like: exploratory research asks big, open-ended questions to get started. You figure out what your pain points are, then conduct specific research.
Are people having trouble with your website? Is it the layout, or the checkout, or the prices? This is where you can get down into the nitty gritty. What is the issue, and how can we fix it.
The downside with this kind of research is that it can be pretty expensive: hiring a market research agency, or offering incentives to your customers for participating in a focus group. Plus, all your effort here is effort you can’t put toward your business. Maybe you don’t have the money for large scale primary research right now, and that’s
okay. The answer isn’t one or the other.
Like most other things in life, the secret to great market research is a combination of multiple things. Take a look at the entire picture with your secondary research, then zoom way in on your business specifically by using primary research. Either one alone won’t get you the same results that both together will, but in the end, it is always about your business: what makes the most sense for your industry and your budget.
That’s all for today, but if you really want to master your marketing, click the link below to talk to the marketing specialists at Dotlogics.
I’ll see you here next time!