Although there’s certainly no rule book on how to become a successful entrepreneur, some of the most thriving businesspeople swear by the power of market research. As award-winning social scientist, Dan Zarrella puts it: “Marketing without data is like driving with your eyes closed.”
As an entrepreneur, you may be required to conduct some form of market research as part of applying for a business grant from small business financiers. In this case, market research will be a crucial step in formulating your first business plan and finance proposal.
But, as you will learn along the way, market research is not a once-off undertaking. It’s something you will need to do at regular junctures along your small business’ journey, and it is one of the most vital aspects of building a company or brand that can adapt to changing environments and shifting consumer demands.
Conducting market research will allow you to answer several key questions that are imperative to the survival and growth of your small business. Some of these questions include;
- Who are my main competitors?
- Is there a real and sustainable demand for my product or service?
- What is the size of my prospective target audience?
- What are the economic indicators that will affect my business or the buying power of my customers?
The answers to these questions will provide you with a roadmap on how to launch your small business and who to target your goods and/or services to.
Large corporates spend millions of rands on qualitative and quantitative research and often employ the services of data research and analytics companies to conduct surveys and facilitate focus groups. For SME owners with significantly smaller budgets, conducting market research on this scale may not be an immediate possibility.
However, with some strategic thinking and a sufficient amount of time, you can conduct market research without breaking the bank. These are three methods you can use right now to learn more about your market:
- Send out a survey
You don’t need thousands of survey responses to gather valuable data that you can leverage to inform your launch or marketing strategy. Using tools like Survey Monkey, you can send out an unlimited number of surveys with up to ten questions each, for free. Rope in your social media contacts, your professional network, friends and family as respondents. The insights you will gain are a great place to start strategising.
- Analyse the search landscape
One of the key pieces of information you will need when kickstarting your small business is finding out who your main competitors are. Finding out who owns the most market share is imperative to developing a strategy that will give you a competitive edge and will help you identify where your competitors are falling short in order to attract their dissatisfied customers.
You could start by Googling popular search terms related to your product or service and looking closely at the competitors who appear on the first page of the search results. If the majority of your leads are going to come from search, then investing in search engine optimisation (SEO) and putting some budget behind specific, targeted keywords may be the way to go, as this will help to elevate the visibility of your brand.
The better you know your customer, the more effective your marketing strategy will be. To do this, you need to find out everything you can about the people you’re targeting with your product or service. This will include what motivates them to buy products or services, what their online behaviour is, which social platforms they’re using and what kind of content they’re interested in or are inclined to engage with. There are a number of research reports conducted by industry bodies that will provide you with a wealth of information on consumer behaviour.
Some great examples that are free to download include the GWI Consumer Snapshot, The South African Consumer Report by Statista and Oracle’s Consumer Research Report. These reports are a source of useful information that you can use to “get into the mind” of your audience. Remember, thorough market research takes the guesswork out of starting and running a business and helps you to truly understand the market you are catering to.ENDS