Marketing is one of the most important parts of any business plan. Great marketing can be the difference between your business and even your top competitors.
But great marketing doesn’t just fall into your lap. There are multiple factors to research and consider beforehand.
That’s where marketing research comes into play.
Marketing research is important because you want to have it nailed down before you even think about marketing.
In fact, in 2006 Microsoft released a product called Zune that was supposed to compete with Apple’s iPod.
But the product was discontinued in 2011 because it failed to differentiate itself.
And according to a former Microsoft executive, it just didn’t give people a reason to choose it over the iPod.
So clearly it’s important that your marketing research is on point. Because it will allow you to identify any weak points before you start marketing.
And you’ll be thankful in the long run when you’re saving precious ad dollars.
In this blog, we are going to discuss the importance of conducting marketing research and some of the steps we take to do marketing research.
Let’s get started!
Marketing Research 101
Around half of businesses with employees don’t survive past the fifth year, according to data from the Bureau of Labor Statistics.
Now don’t let this statistic scare you. There are ways you can avoid this happening to your business too.
If you want to make sure you stay afloat, then it’s best to have a consistent flow of customers.
And the best way you can start off on the right foot is by doing sound marketing research!
To start, you want to look at 3-4 key high level items that will provide greater visibility into your market.
There are many actions you can take to gain visibility from your audience, but it depends on your target audience.
Looking at what information your audience finds most valuable and going from there is going to help you know what to present them.
Fortunately, you don’t have to worry about how to do that because we’ll cover the secret formula you can use to maximize your marketing and reach and grow your business.
Truthfully, there is a ton of information on the internet which makes it harder for your audience to find your business online.
As a small business, this can prove to be even more of a challenge because you may have yet to establish a solid online presence.
However, the internet is simultaneously a powerful resource that gives small businesses of any industry the ability to reach their desired customers at a very small cost.
In addition to the power of the internet, implementing the steps of our marketing research formula will only heighten your level of success.
That means even startups and small local businesses have the chance to be seen and compete against even their biggest competitors in their industry.
But it starts with taking the right first steps so you can get the most out of your marketing.
After all, you want to grow your business as big as it can be. And with the marketing research formula we are going to discuss, you can achieve that.
That said, let’s dive right in to the step-by-step marketing research formula.
The Steps To Marketing Research
Step #1: Analyze Your Product and Audience
Now chances are you already have an idea or a product that you believe millions of people will love. And that’s a great place to start.
But realistically, just because you have a product you think millions will love, doesn’t mean customers will magically start flocking to your website ready to give you their money.
If only it were that simple.
Having a good idea and a product is not enough. If your audience isn’t actively looking for what your business offers, then they won’t need your help.
Attracting your audience starts with them having a problem they need solved. And this is when you identify how your product solves that problem.
You need to ask yourself, “Why would someone use what my business is offering?”
When you can answer this question truthfully and not with “because it’s cool man and everyone is just going to love it once they try it,” then you will be able to understand your audience’s need for your product or service.
That’s why it’s important that your product or service can solve a legitimate problem.
This will help you determine who your audience is.
Once you figure out what the problem is that your audience has, you will realize that not every single person actually has that same problem. And that’s okay and completely normal.
Essentially, everyone in the world isn’t your target audience.
But noting this will help you to start fine tuning your audience. You will have a better idea of who it is you are trying to serve and how.
For example, a dry cleaning business may initially think something like “I have the best service and machines that everyone will love.”
But once they identify the specific problem trying to be solved, then they may discover that the problem is that the professionals in their area don’t have the time to clean and iron their clothes.
Which gives them a much clearer audience.
With this better picture of their audience, this dry cleaning company can better market their business.
So that was the first step. Analyzing your audience and product. Once you have that clearly defined, then you can begin to move to the next step in the formula.
Which is to determine your market size.
Step #2: Market Size
Here’s the deal. Every company has a ceiling or what some people call a “market cap.” This just refers to the amount of potential customers a company can reach.
So let’s go back to the dry cleaners example.
Their market size may be limited to the working professionals within a 15 mile radius.
In this case, population size will largely determine the size of their market. If there are many working professionals in a 15 mile radius, then their market size will be bigger. If there are not, then their market size will be smaller.
And if they have competitors who are also in that radius, then that will limit their market size even further.
Because when there is competition that means you won’t see as much of that traffic.
So now you may be wondering “How exactly do I determine my market size?”
Here’s how we do it.
We like to look at data from the two biggest online companies in the world, which are Google and Facebook.
Their platforms have huge amounts of data that businesses can look at to understand their audience.
If you spend some time playing with these two online data giants, then you will quickly start to get an idea of market size.
The ability you have to narrow and specify your audience will help tremendously.
And of course, you can use data from other online platforms like Bing, Twitter, and LinkedIn to help define your size even more.
Targeting a large market may sound like the best idea. But you really shouldn’t aim for the biggest marketing size that you can.
Because the bigger the market, the more competition you’re likely to have. Think about it, if there is a huge market of customers with a specific problem, more businesses are going to be eager to enter the market to capitalize on this huge market.
The bigger the market and less competitors you have means the more business your company has the ability to receive.
Even if you have a big market, it comes down to how many competitors are in that market.
Or as some others would ask, “How saturated is the market?”
This is an important factor to note before jumping into marketing or even introducing your product or service.
And this brings us to our next point which is step #3, competitor research.
Step #3: Competitor Research
We have heard over and over again statements like “We’re doing something no one has ever seen before.” “We don’t have any competitors,” or “our offering is so unique that no one can really compete with us.”
But when you take a step back and really look at it, here’s the reality:
Even if your product is unique, remember it has to solve a problem.
We cannot stress this enough, but having a real problem that your product or service can solve is crucial.
Ultimately, you’re actually competing with any company that is currently solving the same problem as you.
Even a company as unique as Uber was when it launched, still had to compete with taxis (and kind of still are.)
How do you conduct competitor research?
We’re glad you asked! Let’s demonstrate step by step, how we go about doing competitor research.
Step 1: Who are your competitors?
The first step to doing competitor research starts the same way as any regular online search, on Google.
You can use Google, Facebook Library, or any other search engine to look up information on your competitors.
Like we mentioned before, platforms like Google and Facebook have tons of information on just about anything, including your competitors.
Starting you search here will give you a good outline of what they are doing. But then you’ll have to dig a little deeper.
Which brings us to the next step.
Step 2: What are they doing?
We recognized that big data platforms can give you a good start in the right direction, but to find any real information on what actions your competitors are taking means exploring a little further.
To do this you can use sites such as SimilarWeb, which provide web analytics and data about you competitors. You can learn about their keyword usage, demographics, website traffic volume, and so much more.
Having this information will give you a good idea of what’s working for them and how your website and content holds up to theirs.
Step 3: How powerful is their domain and spending?
Now if your competing with bigger companies, their spending and domain authority are going to be a lot more substantial than a smaller business.
However, you still want to get a gist of how much your competitors are spending and how relevant their domains are.
This information will also help you know generally where your website and content needs to be so that you can be competitive.
Now chances are you’re going to run into some big competitors
But don’t get discouraged, okay? This is actually a great thing because you can study their moves and use them as well.
Think of it as a guideline to help your business. And also remember, patience is key. Rome wasn’t built in a day or even a year.
Alright, let’s move onto our last step, step #4 is differentiation.
Step #4: Differentiation
After going through the steps above, you should have a greater sense of the problems you solve, the market size, and your competitors.
Now you can take all that information and start creating stronger messaging.
This is where you can start winning the hearts of your potential customers because now you can speak towards their needs.
The information you have gained from your marketing research has given you the ability to understand their problem and who they are.
You understand the market, so you can segment your marketing based on geographies and demographics.
And most importantly, you understand the competitors, so you can speak towards what you offer that your competitors do not.
In fact, a compelling marketing tactic that some brands take advantage of are comparison charts.
Comparison charts help when the customer is doing their research and trying to find the best product because they help make it super easy.
This can help elevate their trust and quickly analyze your value proposition without having to read tons of reviews or watch minutes of videos.
In summary, those are the four powerful tips we have for businesses looking for the secret to growing their business with market research.
These are steps that we use when we analyze businesses and we’re certain that they will help you as well.