Market research drives smart business decisions and improves product strategy. It’s particularly beneficial when launching a new product, refining customer targeting, discovering more lucrative buyer profiles, and accelerating growth. It can also be vital if you need to take quick action to correct a decreasing market share or keep on top of trends in a fast-changing industry.
If you’re still on the fence about conducting market research, here are five top benefits of market research:
Market research helps you identify new opportunities to scale your business and increase profits. By conducting market research, you’ll be able to pinpoint untapped customer demand. Once you discover that demand, you’ll see potential areas for expansion.
This could mean offering new products or services to your existing market in order to better meet their needs. Or, it could mean expanding into a completely new market, such as a new geographical area, a new country, or customer demographic.
Taking advantage of these new market opportunities allows you to grow your business and increase your bottom line.
Conducting market research lets you better understand your customers and their preferences.
It’s easy to compile data about your customers’ location, age, gender, income level, etc. The more refined and accurate buyer personas are, the better you can determine whether your product is actually something your customers want/need. You’ll also have the insight you need to refine your pricing, which can improve your sales and maximize profits.
Data from market research also makes it easier for you to connect with your customers by showing you the most effective ways to communicate with them: What kind of marketing do they respond to? When are they online? Where do they like to shop?
With this information you can refine your marketing campaigns and distribution strategy to reach your customers how and where they want to be reached.
Market research is also a valuable tool for minimizing risk and avoiding costly failures. Well-conducted research gives you the data you need to make smarter business decisions.
If you’re planning to release a new product or service, you can carry out small-scale tests to determine whether it’s something your market wants and needs. For example, by releasing it only in select areas and then tracking sales and profits.
This type of localized testing predicts how successful (or unsuccessful) your product might be at a regional and national level. Most importantly, though, it means you can pivot accordingly: you’ll be able to discover if the market is already saturated before releasing your product at full scale, thus avoiding a costly failure!
Industry environments are always shifting, and good market research will allow you to keep ahead of trends and capitalize on them. By monitoring trends, you’ll be better prepared for any predicted shifts in the market (or the economy) and can appropriately adjust your price points, product stock and staffing.
This could mean increasing your manufacture of products before Christmas, or dropping your price point during an economic downturn.
Market research is not only for knowing your customers. You can also focus your sights on your competitors.
Research helps identify not only your key competitors, but can provide detailed profiles of their strengths, weaknesses, opportunities, threats and more. If you haven’t already done so, consider collecting data on how your competitors operate in the market. You may be surprised at how many light bulbs go off in your head when you see this information.
You’ll also gain insights on how your customers view your company and products in relation to your competitors.