The old proverb “measure twice, cut once” doesn’t just apply to carpentry — it’s also a key rule for entrepreneurs looking to start a new business, launch a new product or service, or expand into a new industry.
Although many would-be entrepreneurs opt to go with their gut, effective business owners tend to make decisions based not just on a gut feeling, but on real, proven research that provides an extra degree of insight into their market.
Put simply, market research can make or break a business. Below, Business Adviser and Corporate Consultant, Neil Debenham shares five reasons to make market research a fundamental part of your business’s strategy, whether you’re aiming to grow an existing business or start a new one.
Market research reduces risks
Business failure is exceedingly common, particularly for new businesses. Statistics from the UK Insolvency Service show that hundreds of businesses become insolvent each month even in the best economic conditions.
While many business owners think of market research as a way to enhance results, it’s also an important part of limiting your business’s risk of financial failure.
Smart market research allows you to get valuable insights into problem areas for your business, such as products or processes that aren’t working effectively. It also allows you to rapidly learn more about how your target market perceives your business.
This data is important not just for fuelling growth, but also for ensuring your business is in touch with its existing customers and able to satisfy their needs.
Market research lets you advertise more efficiently
Efficient advertising is all about getting the maximum results from your budget — a task that’s made significantly easier through market research.
Through market research, you can learn more about how your target audience spends its time, including the channels on which your prospective customers are most active. This can help you to make more informed, effective decisions with your marketing budget.
Key information such as mutual interests, average education level, relationship status and other demographic data can help you to hone in your advertising campaigns and reach the audience that’s most likely to fuel your business’s long-term growth.
Market research lets you improve on competitors’ offerings
Every industry is, at least to an extent, a zero-sum game, meaning your business’s victories are, on some level, a defeat for your competitors.
One way to win more frequently is to understand what your competitors offer, how its perceived by your target market, and what you can do to make your products or services stand out to your target audience as a better option than those offered by the competition.
Simple market research methods such as a customer survey can often give you insight into how your business stacks up next to the competition, as well as the weakest points in other products or services offered by your competitors.
Using this information, you can make targeted, specific improvements to set your offerings apart and win market share.
Market research makes it easier to make informed decisions
Beyond allowing you to improve your product or service, market research makes it significantly easier for you, as a business owner or company director, to make informed decisions.
For example, imagine you’re trying to increase your total turnover for the next quarter. Without any data on your customers’ needs, knowing if you can increase prices is difficult — a decision that’s essentially a guess.
With data on your customers’ needs and preferences, you’ll have more information about the viability of increasing your prices and subsequently driving more turnover.
Likewise, market research makes it easier to make informed decisions about new features or products, changes to your marketing efforts, rebranding and other key aspects of running and growing your business.
Market research lets you set smarter, more achievable goals
Finally, accurate and insightful market research makes it easier for you to set smart, achievable goals for your business.
Growing a business is all about setting realistic targets, then implementing the work necessary to accomplish them. With accurate data on your industry, setting these goals becomes far less about guesswork and far more about putting your market research into practice.
Simple things such as reaching out to new customers becomes far easier to do, and far easier to project, when you understand who those prospective customers are, explains Neil Debenham.
Likewise, adding features, launching new products and running new advertising campaigns all becomes a simpler process when you have a deep understanding of how your market functions and the key priorities of your audience.
Closing thoughts
Accurate, insightful data on your market is a valuable asset for your business, especially if you operate in a highly competitive field. Is your business carrying out market research, or are you simply relying on your gut to make key business decisions?
Neil Debenham www.neildebenham.com