Market research seems like a straightforward concept, but there’s a lot more to it than performing a simple Google search. Conducting successful market research means exploring current trends in your industry so you can stay ahead of your competitors and monitor the consumer climate. Who is making waves in the industry? How can you measure up and get ahead? Who are your customers? What do they want? How can you deliver?
Performing a deep dive into what’s trending in your industry can help you get a better idea of how to reach your target market – and increase your revenue as a result.
In this comprehensive market research guide, you’ll learn how to explore the ins and outs of your industry and stay competitive.
What is market research?
The purpose of market research and competitive analysis is simple: to gather and evaluate information from the specific industry and competitors associated with your product or service. Then, you’ll want to determine how your offering and customer experience will be compared to others. Lastly, think of performing market research as the highway that leads you to get answers to these questions:
- What is the current demand for my product or service?
- What pain point or issue does my product or service address?
- Who are my customers?
- When is the best time to sell my product or service?
- Is my business succeeding in comparison to competitors in my market?
- Are there opportunities for expansion or growth within my market?
Asking these questions can help you identify pain points, improve your current methods, and find new ways to keep your business relevant in the eyes of consumers.
The benefits of market research
Industries can change rapidly. As such, it is vital for any company to be aware of what is happening around them to remain competitive, generate profit, and scale. Performing market research that focuses on your industry, your business and your customers can provide long-lasting benefits that include:
- Corporate reputation management: Market research can shed light on how a company’s product or service is being talked about within the industry by competitors and consumers alike. Understanding the conversation taking place around your brand can reinforce the current communication strategy with your target audience or prompt necessary changes to counteract any negative sentiment.
- Identify new business opportunities: As industries shift to adapt to changing consumer needs, market research can help companies stay ahead of the curve and spot new trends quickly. Having a firm grasp of evolving customer pain points enables companies to jump on expansion and growth opportunities quickly.
- Investment risk management: Investing in a new market or expanding offerings always comes with some risk. In-depth research in your target space can alert you to potential pitfalls such as a saturated landscape or waning consumer interest or need for your solution. Armed with this data, companies can avoid making poor financial and time investments.
- Competitive benchmarking and analysis: Conducting market research can help businesses assess their relative level of success within the industry by comparing themselves to competitors. Knowing how the competition is performing enables a company to set tangible goals for the future and identify current weaknesses that need to be addressed.
- Strategic planning: Ultimately, the abundance of data gathered from performing market research can help create a roadmap for companies to follow. Rather than being reactive to the market, companies can be proactive and even dictate new trends in the space based on insights gathered during their research.
Examples of market research
Anyone can do market research, but it may look a little different from one person or department to the next.
As an entrepreneur: Market research provides insight on whether a potential business venture is likely to result in success. Research enables entrepreneurs to understand the nature of the industry and what they’re up against competitively, while also providing a snapshot of the customer and what they’re willing to pay for your product or service.
As a sales team: Market research means more understanding of the team’s strengths and weaknesses in the field, as well as increased visibility of the industry. This allows a sales team to realign its efforts and prepare for upcoming opportunities and/or struggles. Market research also allows a sales team to evaluate how the last year went and whom they sold to. Additionally, this is a great way to open another opportunity to reconnect with cold or stalled leads.
As an investor: Market research informs you of upcoming industry trends as well as which companies are poised to make that next jump into becoming a really successful corporation. In this way, it also minimizes investment risk by identifying potential threats and projecting revenues.
How to perform market research
Primary vs. secondary market research
There are two different types of market research: primary and secondary.
Primary research looks at data you collect and explores how your business is doing using the information provided directly from customers. Under the primary market, research umbrella they are two categories of data: qualitative and quantitative.
- Qualitative data: Collected via focus groups, observations and in-depth interviews and involves consumers’ opinions toward the current state of your product, the reasoning for their actions, opinions, wants and needs
- Quantitative data: Refers to specific numerical data and industry trends, often results in statistical analysis and can come in the form of surveys (online or in person), questionnaires and phone interviews
Research tip: Setting up Google alerts for specific company names or trend reports will make business tracking easier, and thus, simplify your market research process. Instead of having to check specific websites constantly, alerts will notify you whenever a market change occurs.
Similarly, there are also a variety of platforms, such as Crunchbase, that are designed to track financial changes and trigger events from a large pool of businesses. Adding this database to your arsenal will keep you at the forefront of your secondary market research.
How to utilize competitive analysis and benchmarking
Knowing your competitors through market research will give you the upper hand in future decision-making and allows you to build an effective plan that’s one step ahead of everyone else. You can see what works and what doesn’t work for companies in your market. By understanding your competitors – how they succeed and fail – you can outperform them. Start by completing a competitive analysis of the main players in your industry, as well as the up-and-comers.
This type of analysis means looking at every move your competitors make, from funding and acquisitions to marketing and pricing. This way, you can make data-driven choices to stay a step ahead of the businesses making waves in your industry. Not only are you seeing where their strengths lie, but you’re shedding light on their weaknesses – something you could use to your advantage. This process of using metrics from your analysis to get ahead in the industry is competitive benchmarking.
Be sure you’re analyzing and benchmarking against:
- Direct competition: Those selling the same or similar products or services as you
- Indirect competition: Those selling different products or services but tap into the same consumer base
Explore their sales success, social media standing, and reputation with customers. New businesses often offer innovative ideas and bring fresh perspectives to your market.
By monitoring them, you can find out which traditional practices continue to succeed and which new ideas are pushing boundaries. You’ll also begin to see industry trends in time to ride that wave.
Best market research tools
While competitor analysis gives you a great edge, it can be tedious to perform single handedly. Additionally, with the right tools and services, you can make sure you’re looking at current data. Check out these options to help ease the burden:
- Meltwater: Meltwater helps companies make informed decisions based on insights from the outside. They believe that business strategy will be increasingly shaped by insights from online data. Organizations often look outside, beyond their internal reporting systems, to a world of data that is constantly growing and changing.
- Crunchbase Pro: Crunchbase is a destination for discovering industry trends, investments and news about hundreds of thousands of public and private companies globally. From startups to Fortune 500s, Crunchbase provides a business information platform that pairs powerful tools and applications.
- Segment: Segment provides the customer data infrastructure that helps businesses put their customers first. Using Segment, companies can collect, unify and connect their first party to over 200 marketing, analytics and data warehouse tools.
- MiningLamp: MiningLamp is a fast-growing startup aiming to provide enterprises with big data solutions. The company helps clients build knowledge graphs, then apply artificial intelligence to their business and transform data into insights.
- Collibra: Collibra helps organizations around the world gain a competitive advantage by maximizing the value of their data across the enterprise. It’s a solution purpose-built to address the gamut of data stewardship, governance, and management needs of the most complex, data-intensive industries. The cloud-based or on-premises solution puts people and processes first. It automates data governance and management to quickly and securely deliver trusted data to the business users who need it.
Let technology like this aid you in furthering your business’ effectiveness on the backend while experiencing success on the frontend.
Understanding your customers
Knowing what your customers want can be one of the toughest ventures, but it’s a primary part of market research. In a business practical sense, gauging your customers’ interests will help you create a compelling brand and build products they want to buy. Moreover, customer data can be gathered with the above tools, in tandem with social media and other digital platforms.
Customer analysis will help you pinpoint your customer personas by identifying similar characteristics such as age, gender, education, lifestyle, values, income, interests, occupation, place of residence and other characteristics. For example, it’s important to understand trends among the different generations of your customers. The needs of Baby Boomers and Generation Xers are different from Millennials and Generation Z. Knowing these varying ideologies will help you more directly market to individual demographics.
Market research leads to finding out who your competitors are in the fight for your customers’ attention. So, keep a keen eye on who your customer is, what they want to buy, when they want to buy, where they want to buy, how they pay and what they’re willing to pay.
