As an entrepreneur, you understand that market research is a must. What many business owners fail to realize is that they probably shouldn’t conduct market research themselves. You shouldn’t even hand the task off to an in-house marketing person or team.Photo by Davide Ragusa
If you have the budget for a marketing department, it’s best to utilize that resource for content marketing or one-off marketing studies. When you’re just starting your business or rebranding it, it’s best to use a market research agency to find your target audience.
Why You Need a Market Research Agency
For many small business owners, the Internet is their sole reference source. But a Google search just isn’t enough when it comes to the longevity of your business.
There are hundreds of of online resources that provide instructions for the DIY version of market research. However, these how-tos and ebooks leave out the amount of time, patience, and money it costs to get research done correctly the first time.
Market research agencies go beyond survey results by asking “why?” in instances where businesses would accept results as fact. This is especially true when the results confirm the businesses’ own biases. For example, in one survey, an anonymous company found that price ranked behind several other factors when customers were deciding whether to purchase one of its products.
This discovery led the company to believe they could raise the cost of the item without making changes to the actual product or business. It wasn’t long before sales fell. It turned out that price ranked low as a factor because most consumers were accustomed to the price being the same across all competitors.
Agencies look for different ways to interpret information and don’t take results at face value. By asking why results turned out a certain way, they’re able to get to the root of a question. They thus help the businesses mold their models.
How Big Businesses Fail, Too
Market research mistakes aren’t just limited to small businesses. Major corporations have made big marketing research mistakes as well and lost thousands or millions in the process. For example, Coca-Cola’s team had more than 200,000 customers taste-test their line, “New Coke.”
More than half of the participants believed it tasted better than the original Coke, and even Pepsi. But when Coke began selling “New Coke” and nixed the original, customers weren’t very happy. Coke failed to understand that numbers aren’t everything. Customers valued the actual brand and were emotionally invested in Coke’s original product.
Even Google failed tremendously with its Google Glass line. The tech giant assumed they could translate the power of wearable and information technology into a simple everyday tool: eyeglasses.
But Google failed to properly address the concerns of many consumers, most of which were centered around privacy and price. And unlike Apple, which touts its products as an affordable luxury, Google further isolated customers by releasing early models to rich geeks of the West Coast.
Regardless of the clout you have as a business, appealing to the masses is about much more than building a cool product. The “if you build it, they will come” approach doesn’t work in the world of business. Thorough market research is necessary to increases chances of profitability.
Benefits of Market Research
One of the many benefits of market research is that it allows you to create relevant content that sticks. There is a wealth of information out there about your target audience. The difficult part is tapping into that data, analyzing it, and creating content based upon it.
Content reigns supreme. If you want any chance of appearing on the first page of search engine results, you’ll need a lot of it. Targeting the right audience allows you to mold your content towards people who will want to engage with your brand.
Market research also puts you ahead of the competition. In an economy where new businesses are sprouting at the rate of 543,000 per month, you’ll need a competitive edge. And with proper market research, it’s very possible to find success selling products (or services) at slightly higher prices than those of your competitors by differentiating with quality, service, and research.
Most importantly, market research helps you minimize risks. With a wealth of information at your fingertips, you can change your product line, reinvent your services, or build additional features for your software. And if you wanted to open a new location, market research would be able to identify whether that particular spot already had a saturated market.How to Properly Identify Your Target Audience