If you're not a marketing specialist, the term ‘Market Research' probably makes your eyes glaze over – but if you run a business, then you run a marketing business. At the end of the day, you're in the business of marketing your product or service.
This is why it’s super important for you to personally understand your market inside out. This article will reveal the tools and techniques that will help you quickly get a handle on marketing, so you can laser focus your efforts and resources into the most profitable areas.
Whether competing in your current market, or entering a new one, market research or market testing can make or break your business.
The definition of Market Research is basically using data to work out what products, services or markets you should be investing your time and energy into.
The keyword here is ‘data’ so that doesn’t mean guessing or using a hunch.
Find out what the market truly wants and then give it to them.
Your Market is Probably Shifting
It’s very easy to get so lost in your market that you take it for granted. This can prevent you from noticing the subtle, yet sometimes seismic, changes that are taking place around you.
That’s why it’s vital for you to look at what's really going on in your market through a wider lens.
People are ever changing organisms, and so are the markets that reflect them on macro levels.
Shifts can be taking place without you even being aware of them, and instead of embracing these changes with your products and services, you can easily find yourself barking up the old tree, and focussing your sights and resources on the outdated, less profitable areas.
It’s easy to do this if you are still making profits despite your misplaced efforts.
It can be even worse if you're not making profits and panic sets in. This can cause the intensity of your wrong choices to magnify catastrophically.
To prevent this, it's worth taking some time out and doing a little research.
Fast Testing for Fast Market Feedback
Sometimes, in-depth market research can be bypassed if you do some market testing – which can be done a lot faster by using pay per click advertising. Remember that this probably won’t give you a clear picture of the overall market, however.
It will allow you to set up an experiment, and start getting results almost immediately. It also has the advantage of being totally current – whereas in-depth market research data is usually lagging.
This is great for testing new products or services.
If, instead, you want to see what the overall market is saying, rather than a small section, you’ll need to research a little deeper.
Key Areas to Keep Tabs On
1. Size of the Market
Is the market smaller or bigger than it was when you first entered?
If it has shrunk, then maybe this is why you are feeling the pinch. It might be time to diversify your product line or even your market.
Depending on your market, there’s a good chance that a market research firm has already done all the hard work for you, so to find out the current size, try the following searches on Google:
- ‘size of [insert industry] [insert location]' (e.g. ‘size of car industry UK')
- ‘[insert location] [insert industry] market size' (e.g. ‘UK car industry market size'
Be sure to filter your search to the last 12 months, otherwise you could be retrieving old data.
You can do this under ‘Search Tools' which currently sits under the search box in Google.
I also use Quora, which is a questions and answers site. I can either search other people's past questions and answers, or ask new questions of my own.
Usually someone has already asked my question, and there are already answers available – so I can get the information required immediately.
The same can be true of Yahoo Answers, but I’ve found some of the answers on here aren't always as credible as Quora. It’s always worth checking the source of the answers to make sure they are reputable.
Other good places for research can be industry publications, or major research databases, that can be found in most libraries.
British industry research can be found here in the British Library.
US industry research can be found here on the Internet Public Library.
2. Market Potency
Is the market demand still as potent as when you first started, or has it been watered down?
Has it fragmented and, if so, should you be segmenting your product range in line with this?
Or is it more focused towards one or two of your products? Should you start reflecting this, and focusing all of your energies into these areas?
Again, you can use the above resources to find this information.
A quick place to check is Google Trends, as this shows you whether search volume on Google (for the main keyword used to search your product or service) has changed over the last nine years. It will also show you some related terms people have been searching on Google.
This only gives an indication, because other factors such as Internet usage have obviously increased over the last nine years.
You can also use Google's Free Keyword Tool to see what other keywords people are typing into Google.
This shows the monthly search volume for any given keyword or phrase, and may give you an indication as to any segments of the market you are wrongly ignoring or giving too much attention to.
As I mentioned in this article, a great way to find out what’s happening with your prospects, customers, or ex-customers is simply to speak with them.
Or you can eavesdrop on their conversations using some of the techniques described in this article.
Has competition really grown, or does it just ‘feel' like it has? How well are your competitors doing in comparison to you? Has your market share decreased or increased?
Are the barriers to entry the same as they’ve always been? Advancements in technology can usually bring these down, which means competition can almost appear to grow from nowhere.
Depending on where you operate, the number of competitors within your market is probably published, and you can usually find this in the same way you can find the size of the market – as described earlier in this post.
If you want to check on specific competitors, then you can always download their public accounts or, if you cannot access these, then you can try other ways to monitor their activity, like checking stats such as their website popularity.
Without having access to their website analytics, a crude way to see how their website is performing in comparison to yours is to check on Alexa.com, as this will give an estimation of the popularity and volume of traffic the site receives.
Have the demographics of your market changed in any way and, if so, should you be changing the way you market your products?
As well as searching Google and asking on Quora, a quick place to check the demographics of your market is Quantcast.com.
You can do this by entering your website into the search box. If they don’t have data for your website, you can enter one of your competitors instead.
The results are a little US-centric, but they give a good indication of the way your market is made up.
5. Geo Target
Are you targeting the right geographic locations for your product or service, or are most of your potential customers somewhere else?
Again, Google Trends can give you a good indication of where people are based if you type in the main keywords for your market, and then check the results.
If you have Google Analytics on your website, you can also check where most of you traffic comes from and, more importantly, where most of your leads or sales come from.
6. Average spend
Has the average spend of your customers increased or decreased, and has that affected the average value of each customer?
If it has decreased, what other value can you offer to your customers to increase this spend?
You can obviously check this information internally, and it’s very important to keep tabs on this, so you can act nimbly if it does drop too low.
So there’s some of the areas you need to have a good handle on if you want to navigate the choppy waters of business.
The power lies in you playing a hands-on role, even if you decide to use an outside consultancy.
This will give you a much stronger feel for your business, and the profitable opportunities in your marketplace.