How to Analyze Your Competitors and Improve Your Small Business Strategy with Market Research
Every business, regardless of size, needs to conduct market research. Small business market research is especially important, as you need to make sure you remain competitive against companies of all sizes.
This guide will refresh your memory on what market research is and how to use it to give your business a competitive advantage.
What is market research?
Small business market research refers to the practice of gathering all available information about your target market as well as your customers. You use this market research to confirm a new product’s success, improve an existing product, or better understand and improve brand perception.
Importantly, market research is not necessarily something you can complete in a day. It can take weeks or months to get accurate results. That being said, it is definitely worth the time and effort you put into it.
Your market research can give you valuable information, including the following:
- Where your audience research products or services
- Who is in your market
- The challenges of your audience
- What influences your audience’s purchase decisions
- Which competitors are popular or considered industry resources
- Industry trends, including from the buyer’s perspective
- Attitudes about a brand, product, or service
- How customers feel about pricing
- If your planned projects have a demand
- What needs are not served
But why do you need to do market research and how does it give you a competitive advantage?
You may be tempted to just rely on information from survey results or other feedback from current customers. But remember that this is not the entire market. This will only represent the portion of the market that you have already appealed to. You need a wider reach to effectively use target marketing. Researching the market as a whole can also potentially give you more information than your competitors have, which will give you an advantage.
Overall, conducting market research lets you know where your buyers stand, so you can meet them there. You will better understand their pain points, challenges, and ideal solutions. This way, you can adjust your product or service accordingly. More importantly, market research lets you do this on a larger scale, making your results more valuable.
Types of Market Research
Before you can target customer service and conduct other market research, you should be familiar with the various types of market research. This will let you better decide which type of data makes sense for your business.
Primary Market Research
Primary market research comes from surveying your customers and analyzing your competition. The most important aspect of primary market research is that it is the research that you do yourself. You talk directly to your customers when gathering this information, although you can do so in a variety of ways. You can ask open-ended questions or try to get quantifiable figures.
If you are a startup or new business with a small base of current customers, you can also talk to potential customers and look at information from competitors.
The most common types of primary research include:
- Focus Groups: Focus groups involve a small group of customers or your target audience, and they are run by an assigned leader. These discussions provide a venue for customers to answer open-ended questions and for you to have more in-depth conversations with your audience. You can use the insights to improve customer service.
- One–on-One Interviews: As the name implies, this type of target marketing involves talking to a single customer or target at once. These will be more in-depth and give you greater insights.
- Surveys: Surveys are one of the most common methods of conducting primary market research. Survey questions can ask for ratings on a scale, provide choices, or be open-ended. As you create your questions, make sure that they don’t lead people to a particular answer. Objective survey questions are essential to getting useful results.
- Competition Assessment: Come up with a competition definition, and then decide which competitors fit it. Then, examine the competition, paying attention to their niche, products, and services. You can use a specific type of competitive analysis, such as a SWOT analysis or competitive matrix.
Secondary Market Research
Secondary market research comes from public data as well as third-party data. Importantly, it is data that you do not gather yourself. You may be surprised to learn how much third-party data, including small business statistics, is available for your secondary market research. In many cases, you just have to request it, and there is frequently no cost. Otherwise, there may be a small cost for the research.
You should consider secondary small business market research from:
- Government Information: Data from the government will almost always be free. However, you may have to put in some time to find the data you need or submit requests for it. This is an excellent source of secondary market research because of the wealth of data available. The Bureau of Labor Statistics is a particularly useful resource, as is census data.
- Trade Associations: These organizations are specific to a given industry. No matter what industry you are in, there is a relevant trade association. If you are not already a member of the trade association, you may want to ask about the process for joining one. For the purpose of market research, however, you just need to request the association’s data about the market.
- Third-Party Research Sites: Of the various types of secondary market research, this is the one you are most likely to have to pay for. You can find numerous industry reports from market research companies if you do a Google search.
How to Conduct Effective Market Research for Small Businesses
As mentioned, surveys are one of the many ways to conduct primary market research, and they are especially useful for small businesses. Surveys are also cost-effective and they allow you to spend your time more wisely.
As you conduct market research, use the following tips.
1. Identify your audience.
Before you start your research or marketing, always identify your audience. This will help you focus your time and effort. Once you have a competition definition, you can also look at the audience of competitors as part of your competitor analysis.
Remember that identifying your audience lets you focus your small business market research, reducing your expenses.
2. Define your objectives.
Decide on the objective or goal of your research. Do you want to see if it makes sense to expand into a new market? Do you want customer feedback on a new product or service? Do you want data to show potential investors your company’s potential? Do you want to confirm your business plan seems feasible?
Once you define your objective, you can quickly figure out the rest of your market research strategy.
3. Choose the right research method.
Carefully consider the various research methods. If you are on a tight budget, surveys and small focus groups are very cost-effective. If you’re not pressed for time, you can comb through the Internet for data from government organizations and trade organizations.
4. Ask the right questions.
Take the time to craft questions that will give you the information you need. Remember that questions should be objective, so you don’t accidentally get biased results.
Using Social Media for Market Research
Depending on your audience, you should also consider using social media for market research. For example, you can make posts or send messages to encourage your followers to fill out your survey.
Remember that you don’t have to conduct the research manually. Podium offers messaging tools that make it simple and efficient to conduct customer surveys. You can easily track messages from any channel via Inbox and use tools like Webchat or text marketing to improve the survey response rate.
Gather Insights and Grow Your Business With Podium
When it comes down to it, small business market research gives you valuable insights that let you grow your business and stay ahead of the competition. This research can guide business decisions, from expanding your market to launching new products to improving current ones.
Conveniently, you don’t have to gather these insights manually. Tools like Podium can help you conduct effective market research, improving your overall business and marketing strategy.
For example, you can encourage reviews with the free Google Review link generator. These are a valuable source of primary market research and help you attract new customers. Podium helps you get more reviews and more business for you.
Or you can use text marketing to encourage customers and potential clients to fill out your survey. With 500 ready-to-use texting templates, you can also use texting to promote sales. Podium helps you send one text that drives thousands in revenue. These tools not only help with your market analysis, but they also let you maximize customer satisfaction.
