In college, we were taught that we must apply extensive research to our thesis if we want to pass and graduate. The same can be said in business—market research can be the difference between a company’s success and failure in an increasingly competitive industry. This shows just how important it is in reaching your business goals.
Market research is an important component of a business plan as it gives all the necessary information that is needed to make the right decisions moving forward. In fact, studies have shown that many businesses actually fail due to poor market research.
Still not convinced? Below is a list of reasons why market research is and will always be absolutely vital to a business’ success.
Knowing Your Customers
It is essential for every business to know who their customers should be. Market research services and researchers, who diligently study their business’ market, can identify key points such as:
- The ideal customer persona
- How often customers purchase
- Customer expectations
- Customer needs and wants
Effective research on your business’ target customers also yields valuable insights and stats in terms of demographics (e.g. age, income, and gender). These insights give businesses a better idea of how to plan, design, and implement things such as their pricing strategies and marketing campaigns.
Spotting Business Opportunities
Market research also allows you to pinpoint potential business opportunities which can spell good fortune for your company. After knowing who your target customers, how to reach them, and what they’re mostly interested in, you can determine the kinds of opportunities you should look out for such as:
- Business partnerships – Teaming up with another business can provide you with the needed resources to improve your operations or reach your market better.
- Location – Learning where your target customers are geographically and online allows you to know where to focus your efforts on more.
- Products/service improvements – Market research results can help businesses come up with new ideas on how to upgrade their products and services to better fit their target customers’ needs.
These key insights not only represent information your business could use but also opportunities you can leverage for more growth and progress.
Studying the Competition
A head-scratcher for some start-up businesses is figuring out ways on how to survive in a highly-competitive market. This is another area where extensive marketing research is needed, which could lead to the following important details regarding your competition.
- Identifying established and new competitors
- Knowing the competition’s weakness and strengths
- How your competitors strategise
Identifying all of these gives a business more ways to innovate and improve their products and services to keep in step or stay ahead of the competition. Knowing more about your competition allows you to find key points you can take advantage of, as well as study what works for them and possibly apply these learnings on your own operations.
Better Ways to Market and Advertise
Doing market research also allows you to find out which marketing and advertising tools, strategies, and campaigns—online or offline—will best reach your target audience. This includes digital marketing, and since most of us are already online, analysing the digital platforms and social networks your customers are likely to use is essential.
For example, if the results of your market research show that your customers spend more time on, say, Instagram and LinkedIn, it might make sense to initiate marketing campaigns and focus your social media ad budget on these networks.
Staying Ahead of the Pack
Every entrepreneur wants to see their company grow and stay ahead of the game. The road to success involves a lot of challenges and obstacles–cliché but true. However, when a business takes great effort in doing their market research, those challenges, while still won’t be avoided, can be handled better. Below are a couple of ways market research can help you outperform your competitors:
- Acknowledging unaddressed customer needs – Thorough market research can uncover customer needs that have not been met by your competitors. Grab this opportunity to address those by improving or developing products or services that fit these needs. An important aspect here is listening and responding to customer feedback – 77% of customers say that they appreciate brands who respond to their queries.
- Target dissatisfied customers – Market research can also reveal what customers don’t like about a particular brand’s product or service. This gives you an idea of what to improve on when it comes to your own offerings or what to create next, so you can better target dissatisfied customers, encouraging them to switch brands.
All these point to the importance of market research and analysis for achieving success, especially for start-ups who have a smaller margin of error compared to their more established counterparts.
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