Market Research

2. Minimize risks in key business decisions

 

Want to launch a new product? Enter new geography? Build marketing campaigns for a new audience segment?

All of these are a significant risk—and not just a financial one. You also need to invest time and take your workforce away from other important projects to focus on these efforts.

If you don’t have market research to back up these business decisions, you have no way of predicting their results.

The better you know your audience, the lower the risk of these huge moves, and the better you can understand and predict their potential impact.

3. Understand the ‘why,’ not just the ‘what’

 

As marketers, business owners, and executives, we often look at numbers and call it a day. We look at traffic, leads, sales, customer inquiries, conversion rates, and revenue, and we compare them to our goals.

As a result, we keep doing the same, or we tweak something to see if we can hit better numbers.

The issue with this approach? You don’t know why numbers are the way they are.

For example, you know how many leads turn into customers, but do you know what led them to buy from you? What about leads that didn’t convert—what stopped them from taking action?

The same applies to customers who switched from a competitor to you, started spending more with you, or canceled their service after years of being loyal. Market research helps you understand the ‘why’ behind these decisions and serve your market better.

 

4. Gain competitive advantage

 

Companies that double down on customer experience are winning. Good customer experience makes customers 3.5x more likely to repurchase and 5x more likely to recommend the company to friends compared to a poor experience.

If you don’t care deeply about creating great customer experiences with your product or services, you’ll lose customers to companies that do. Market research that fuels excellent products and CX give you a powerful competitive advantage—simple as that.

 

5. Find opportunities for growth and expansion

 

When you have your ear to the ground, you can easily spot new and rising needs, challenges, and pain points your (potential) customers are experiencing.

This can fuel new product development, adding features to your existing product suite, or tweaking your product positioning.

Market research prepares you for the ebbs and flows of the needs of your market. Use it to brainstorm and test new ideas, communicate with potential early adopters, and gather feedback as you plan to launch new products/features or expand into new markets.

 

2. As your business grows

 

Making changes in your business? Want to launch a new product? Pivot from brick-and-mortar to eCommerce (or vice versa), or want to update your pricing?

Market research helps.

When introducing new products or services

The principles from starting a new business apply here, too. Yes, you have an established brand and a customer base, but that doesn’t guarantee a new product’s success.

Think about all the well-known companies that launched products that ultimately failed: Coca-Cola, Cheetos, Google, Amazon, and Nokia are just a few names on that list.

When expanding your product offering, it’s also important to include a range of teams in your research. This includes sales reps, customer support agents, marketers, and more—each of them has a goldmine of knowledge about customer needs, questions, and gaps your products haven’t yet filled.

 

When changing the pricing of your product

Your pricing update can have a massive impact on your customers, especially if you charge recurring subscriptions.

Yes, upping your prices brings more revenue, but you’re risking uproar and cancellations from unhappy customers.

Market research helps you understand:

You shouldn’t make a pricing change without knowing how it will affect your customers and how they might feel about it.

Consider these plan and pricing changes from SaaS companies, and how they communicated it:

• Todoist’s free plan change: they added features previously only available on paid plans, but lowered the number of active projects users can have

• Elementor’s pricing plan update: they added new plans that include VIP and team support

• LastPass’ free plan change: they limited the free plan to one active device type, computers (including all browsers) versus mobile devices (smartphones, smartwatches, and tablets)

Look at the specificity of these updates. They include details about usage, features, and support based on what customers are already using. They’re not just pricing updates for the sake of generating more revenue.

Want access to this information? This is where a customer relationship management software (CRM) helps. It shows you all the usage and customer plans so you can make smart pricing decisions based on real customer data.

 

Pivoting from brick-and-mortar to online business, or vice versa

If you’re only operating as a retail establishment, would you benefit from adding an online shopping option? What about the other way around?

This is another area where having a CRM helps. It helps you understand the demographics of your customers so you can potentially meet their needs elsewhere.

When retailers use a CRM, it puts their customers at the heart of their business. It unifies all customer data in a central hub, improves customer engagement, and identifies loyal customers.

The preference to shop online decreases with age: Seniors and Baby Boomers are much less likely to shop online than Millennials and Gen-Z. Researching your market to understand where your customers are on this scale and how they prefer to shop will help you make the necessary pivot.

Plus: if you’re a retailer expanding from brick-and-mortar to eCommerce, a CRM will help you understand the complete customer journey through your website, including the products they’ve looked for, abandoned carts, and more.

 

To make sure you’re still relevant to your target market

Even if everything is going well in your business, it’s crucial to keep your finger on its pulse at all times. That’s the only way you can adapt to new industry trends and potential challenges.

Depending on your resources, you may want to research your competitors and the state of the market once or multiple times per year. You’ll be able to uncover patterns, shifts, and gaps in your offers early.

A CRM gives you a cost-effective way to always know how your customer base is doing. Use it to keep an eye on:

All of these will give you clues about your position in the market and fuel your market research.

 

3. When running a new marketing campaign

 

New marketing campaigns, especially large-scale ones, massively benefit from market research.

By understanding how your target customers behave both online and off, you can deliver the right message timely and in the right format. You can set your goals and objectives correctly, and build a data-backed plan.

You’ll get insights to define your:

• Messaging: What words, phrases, statements, and questions do your customers and prospects use to describe the topics you’re tackling with your campaign (also known as voice of customer, or VOC)?

• Design: What colors, shapes, illustrations, and other visual and branding elements does your target market resonate with?

• Channels: Where does your target market spend their time online, and which content formats do they engage with? What about offline channels?

• Targeting: How can you narrow your target audiences for your ad campaigns? Which interests, behaviors, and demographics can you use?

• Frequency: How many times does your target customer need to see or hear about you to take action? 

• Spend: What’s your potential budget to reach the number of people you need to hit your goals (based on what you learned about channels and targeting)?

How to conduct a thorough market research

 

Just like most things in business, there’s no one-size-fits-all market research strategy. Your approach depends on the reasons you’re conducting market research, your goals, budget, timeline, and resources.

In this section, we’re taking you through seven powerful market research steps and methods. The more of these you use in tandem, the better—but doing even a few is more powerful than doing nothing.

Let’s go!

 

1. Customer feedback and interviews

If you’ve been in business for a while, start by talking to your customers.

 

Start with your best customers—those who’ve been with you for a long time, have high product usage, and high customer satisfaction score (or low number of issues and complaints). 

Luke Genoyer, head of demand generation at Global Call Forwarding, recommends you set up calls with these customers and ask the following questions -

• What problem(s) are we helping you solve?

• How did you initially find out about our company?

• Why did you choose us over competitors?

• Was there anything that almost caused you not to buy?  

• Was the implementation a smooth process?

• What do you like most about our service?

• What could be improved about our service? Are there any underlying issues we should address?

 

Better Proposals, an online proposal software, uses a similar approach. Petra Odak, Better Proposals’ CMO, said her team places a lot of attention on support messages from customers. They keep detailed track of the most frequent questions and requests they get.

 

2. Competitor analysis

Next up is competitor analysis. This is a great place to start if you don’t have any customers yet, but it’s useful even when you’ve been around for a while.

There are many angles you can approach competitor analysis from.

For example, you can dig into secondary data: market share, social media listening and sentiment, panel data (from Nielsen, for example), and other publicly available information (or data you can purchase).

Then, look at your competitors’ customers. Comb through reviews (think sites like G2 or Capterra), questions on Quora, discussion boards, product review blog posts, and YouTube videos.

Luke Genoyer of Global Call Forwarding recommends ‘mystery shopping’ your competitors. This could include experiencing their signup process to get a free trial or a demo, their onboarding emails, or an inside look at product features. This will help you understand how your potential customers experience your competitors’ products as opposed to yours.

Don’t let competitor analysis overwhelm you. Namratha Ambat, digital marketing executive at GemPool, a recruitment company, recommends starting with a list of three to five competitors that cover similar niches and overlap in services and pricing.

 

You’ll build up your competitor research with steps covered in upcoming sections, too.

 

3. Product/service use case research

 

By now, you’ve probably learned a lot about your competitors and their customers. In this stage of your market research, you’ll learn about the use cases for your product or service.

Use cases mark a specific situation and environment in which your product or service can help your customers. For example, Freshsales CRM serves a range of industries and business models, including retail, eCommerce, SaaS, agency, and real estate:

These industries serve different buyers, with a variety of needs and problem descriptions to shop for solutions.

Your customer feedback and interviews will give you a solid idea of which use cases you already serve well and need to double down on. But researching what other, similar solutions are doing could open you up to new customer types and new ways to scale. 

For example, your key product is invoicing software. Most of your customers are creative freelancers, but your market research shows you your exact features can serve agencies and larger creative teams, too.

This means you can work this into your use cases section, as well as develop marketing and sales messaging to use across all your channels and customer interactions.

 

The more you dig into both your customer conversations and your competitors’ use cases, the better you’ll understand the nature of the demand for your solutions. You can then better position them on the market.

 

4. Interviews with industry professionals

 

You should regularly speak not just to your customers and prospects, but leaders in your industry, too: authors, speakers, researchers, executives, journalists, and other professionals with a deep focus on the market you want to serve.

As you build your reputation in the industry, setting up these interviews will get easier with time. Keep consistent track of experts you build rapport with through your work to build a network of professionals you can always reference.

Aim for around 30 minutes of in-person or phone/video conversation rather than a written interview. Real-time interactions drive richer insights compared to a question-answer nature of a written interview.

Your questions will depend on your specific market research needs, so spend time aligning them with what you want to achieve with the interview.

 

Use your interview insights to point you to new ideas and hypotheses you can further research.

 

5. Focus groups and surveys

 

A focus group is a small group discussion in a controlled, interactive setting. Target market members discuss a specific subject, led and moderated by a facilitator.

Focus groups are a great way to hear direct thoughts and experiences from target audience members. They use their own words, phrases, and voices to share personal feedbacks. The discussion-based style of focus groups can uncover new, unfamiliar insights and allow the group to dive deeper into them.

If focus groups fit your needs, go for it, but keep in mind some downsides.

Focus groups can be costly due to the expense of hiring moderators, compensating participants, renting the space, and more. There’s also a risk of getting skewed results if an outspoken participant dominates and directs the discussion.

Another great way of researching your market is surveys. They give you quick feedback and can be scaled easily. You also get data you can slice and segment based on a range of variables.

You can survey your:

• Website visitors based on the page they’re viewing

• Email subscribers, either your entire list or specific segment based on opens, clicks, and interests

• Current customers (a great example of a product-market fit survey comes from Superhuman)

• Past customers

Your survey results may require some further exploration, but it’s a great way to explore your target market’s pain points, views, and preferences at scale.

 

6. Pricing research

 

How should you price your products or services for maximum conversions and revenue? Pricing is a massive factor in profitability; a McKinsey study revealed that if the Global 1200 raised prices by 1%, their profits would increase by 11% on average.

But pricing is more about your profitability. Think about these questions:

• What are customers willing to pay more for? 

• How many choices do they want to pick from? 

• What do they compare your prices to?

• What do they feel is too cheap to be good, or too expensive to be worth it?

You can use pricing research techniques like the Price Sensitivity Meter or conjoint analysis as you interview and survey your customers, prospects, and industry experts.

On top of that, add a layer to your competitor research efforts. Spend a few hours diving into pricing plans and strategies of your competitors.

Track them in a spreadsheet, noting:

• How many prices do they offer across their products or services?

• Do they offer discounts for volume, annual billing, or other parameters?

• Which benefits do they emphasize when listing different prices?

Then, use this spreadsheet to map out ranges of prices for the same types of products or subscriptions.

When you combine this with results of pricing research techniques mentioned earlier, you’ll learn where your pricing currently stands (or where it can be if you’re just getting started), and potential tweaks to drive profitability

 

7. Data analysis

 

Finally, you can dig into any type of data specific to your company or your industry. Here are some suggestions to get you started.

 

SparkToro

SparkToro is a market research and audience intelligence tool. It’s simple: you enter a term your audience talks about or uses in their social profile, or a social account or a website they follow and frequently visit, and you end up with insights such as:

• Words, hashtags, and phrases they often use

• Accounts they engage with

• Podcasts, YouTube channels, and press accounts they listen, watch, and read

• Geographic details

• Degree of shared characteristics

Google Ads data

When you use Google Ads to run paid search listings, Google Ads gives you deeper audience insights about people who took action on your ad.

This includes demographics, locations, devices, interests, and in-market audiences. It’s a powerful way to get detailed audience data for a low investment.

 

This is a cost-efficient way to get access to specific audience data—and quickly.

 

Website session recordings

How your website visitors behave as they browse your site can tell a lot about who they are and what they struggle with.

Features like Freshsales Suite's session replays allow you to view live playbacks of what your visitors do on your website, including mouse movements, clicks, progress between pages, and scrolling.

Session recordings will uncover insights like:

The more recordings you review, the stronger patterns and insights you’ll have about what your market needs, searches for, and struggles with.

 

Key industry data

What can you learn from the data you come across as you work?

GemPool’s Namratha Ambat emphasizes the value of data for the recruitment company. “We can analyze everything from retention levels in potential hires to time to hire. This data tells us a lot about recruitment roadmaps and future hiring needs,” she explains.

You already have access to lots of data that sits unused. Secondary research available online for free, as well as insights from your CRM or your customer conversations, is waiting for you to place it into context and draw actionable insights from it.