Conducting Marketing Research
Marketing research is the process of gathering data on customers in a strategic manner then analyzing the data for insight into how your business can better serve the market. Marketing research tells you who your target market is, what they need and ways to improve products to meet those needs, plus a whole lot more.
Why is Market Research Useful?
Today’s consumers aren’t passive purchasers. They do a lot of research online, visit brick-and-mortar stores to see products in person, comparison shop for the best price and read countless reviews from their fellow consumers. They arm themselves with information like never before.
81% of consumers do research online before making a purchase. (GE Capital Retail Bank)
67% of consumers use their smartphones to “digital window shop.” (Paypal)
80% of consumers compare prices online before buying. (Market Track)
Winning business means that companies need to be just as savvy with their own research. Consumers can learn more about a product or service than in years past, but companies can also learn more about consumers than ever before.
With marketing research you can:
Better Understand Your Customer Base
You can never know too much about your customer base. Product development, website development, marketing and sales teams can all benefit from learning more about who customers are and what they want. Better still, you’ll learn what influences them in their customer journey.
Understand the Industry Better
Marketing research can also tell you what’s happening across an entire industry, including:
- Industry trends
- Competition within the industry
- Related legislation
- Shifts in the marketplace
Make Informed Data-Based Decisions
Perhaps the most important reason to use market research is that you’ll be making decisions based on data, not assumptions or beliefs. Marketing plans and campaigns that are built around market research are more likely to resonate with consumers because they are providing guidance. And with market research, you can better predict product success as well as which features will attract the most customers.
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Market Research Methods
Market research is a tool that has been used since long before the actual Mad Men took Madison Avenue by storm. Some of the same research methods are used today, but now there is a world of analytics and big data at your disposal.
There are many ways to gather data for market research, however, the data falls into one of two categories:
Primary market research – Data that’s gathered firsthand through your website analytics, surveys, interviews, product observations and focus groups. It can also come from a marketing research company that you’ve hired.
There are two types of primary market research:
- Exploratory – This type of research is used when you are trying to identify customer problems, opportunities or general observations rather than a quantifiable metric. It can also be used to get customer opinions on a particular issue. Exploratory market research is often done before specific research. Examples of exploratory methods include open-ended questionnaires and surveys.
- Specific – Often specific market research is done to dive deeper into an observation that was gained from exploratory research. With this method, a questionnaire would include only questions related to the problem or opportunity being studied. And you may gather data from a smaller, more focused segment of your customer base.
Secondary market research – Data that already exists and is available to the public. It could be information gathered by the government, research groups, industry organizations or another company. Secondary market research is primarily useful for studying trends and industry shifts.
There are three key sources for secondary market research:
- In-House/Internal – This refers to data and information your company has already gathered. It can be past studies and surveys or the most recent reports from your analytics platform.
- Public – Information that comes from a government entity (Census, BLS statistics,etc.) or university are two examples of public sources. Usually, this information is free and available to the general public.
- Commercial – Reports from industry groups, trade associations and research agencies like the Pew Research Center. You may have to pay for market reports from commercial sources or be a member of an industry group to gain access to the research.
Quick Guide to Conducting Marketing Research
To glean the most accurate, useful information, you need to have a solid marketing research plan. Marketing research that’s directed in the wrong way or has no direction at all could lead you astray rather than getting you closer to the mindset of the customer base.
All it takes is six steps to discover more about your market:
Outline a Goal for the Market Research
Market research should start by outlining the goal of the project. The goal can be based on a business objective or a known problem/opportunity that exists in the marketplace. Your goal will give the market research direction, narrow the information that’s collected, influence how you gather data and what you learn.
It can help to create a list of questions that you would like to answer during the market research. The questions can be broad or very specific. As long as they are related to market research goal the answers should provide useful information.
Identify the Cohort to Engage With
If you plan to do primary market research you’ll most likely interact with consumers. Who those people are influences the outcome. You may need to do a little upfront research to identify the user cohort that best represents the target audience. Companies that are already tracking data have probably already defined user cohorts so it’s simply a matter of choosing the most relevant cohort. Aim to have at least 10 people within the cohort that are at different stages in the purchase process participate in the research.
You can also create a buyer persona that represents the ideal customer. A buyer persona is a visualization tool that gives you a clearer picture of who to engage with during the market research.
Choose Your Market Research Tools and Methods
Do you plan to do primary marketing research, look up secondary marketing data or a combination of the two? The method of market research you use may come down to the tools at your disposal and who you plan to engage with during the research.
If you have a data analytics platform you can run A/B tests or multivariate tests to gather data on your existing user base and people who convert into customers. You can also use an online survey, put together a focus group or conduct phone interviews.
A discussion guide is an invaluable tool that can be used for all types of primary market research. The guideline should include the key open-ended questions that you are trying to answer. It can also outline cohort characteristics, the known problem/opportunity and your market research goal.
Create a plan that lays out exactly how you will gather data in order to meet your market research goal. This will provide direction for what tools to use, the type of information that needs to be gathered and how it will be analyzed.
Use the Market Research Tools to Gather Data
Once the plan is in place it’s time to start researching.
Use the discussion guide to create surveys and questionnaires that can be filled out online or in-person. Resist the urge to add too many questions in an effort to gather data because it could have the opposite effect. The longer the survey or questionnaire is the less likely it is to be completed. A good rule of thumb is that it should take no more than 30 minutes.
The discussion guide can also be used to craft a phone interview script and direct focus group activities.
Once you’ve got your assets in place you’ll need to recruit participants for focus groups, interviews, etc. Start by contacting people who have recently made a purchase or those that have submitted lead information. For a survey, you can take to social media to recruit a healthy sample of people that have and haven’t purchased from your company.
No matter how you source research subjects, offer an incentive in exchange for their time. An incentive doesn’t have to be expensive, and it will help encourage people to participate. Consider offering each person a discount, free month of a subscription-based product/service or access to paid content.
While these tools are being used, you can continue to use your analytics platform to gather data as well.
Analyze the Data
After the research portion is complete you should have a wealth of data that needs to be organized and analyzed. Since marketing research is about the collective whole rather than individual consumers, you’ll want to look for trends and patterns in the data.
Writing a summary of the market research process and findings can help you organize your thoughts and share the observations with others who can use the data. The summary can include:
- Market research goals.
- Information on the cohort of participants.
- Direct answers to the questions asked.
- Quotes from participants.
- Diagrams and graphs to visualize data points.
- Major themes and trends that were discovered.
- Interesting takeaways and observations.
Identify Actionable Steps Based on the Data Analysis
The goal of data analysis is to identify actionable steps that can be taken to get you closer to your business goals. For that reason, your market research summary should also include an action plan.
The action plan will outline the next steps to take to act on the data. The marketing team will likely have enough information to launch a new campaign that addresses consumer needs in a whole new way. And the product development team can begin the process of pivoting, adding features or making a new product altogether.
Use the action plan to:
- Prioritize next steps in order of importance.
- Provide a guesstimate of the impact each action will have.
- Produce a timeline for completing each task.
- Identify who will carry out each action item.
The testing and analysis phases are complete, but market research is never truly finished. Industries are always evolving, new competitors enter the mix and consumer behavior changes. Use your initial market research as a launching pad to keep learning.
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