Understanding your audience is crucial to your company’s success—that’s obvious.

But do you truly know them?

A study by CoSchedule revealed that 65% of marketers conduct audience research rarely or never.

If you belong in the 65%, you might feel market research is too complicated or expensive to do with not enough benefits to go through the effort.

Here’s the good news: market research is a powerful business asset, and easy to dive into.

In this guide, we’re taking you through everything you need to know about market research: 

Market Research

What is market research?

 

What is market research?

Market research is a dedicated effort to gather information about a company’s target market. It includes a range of techniques, like in-depth interviews, surveys, competitor research, and data analysis.

The goal of market research is to understand the needs of the market. This includes both your potential and current customers.

Market research helps you uncover:

If you want to remain competitive, market research is essential. You need it to make decisions based on the real needs and experiences of your target audience—without it, you’re relying on guesses and assumptions.

Why is conducting market research important?

 

“Whoever gets closer to the customer wins,” said Bernadette Jiwa, a storytelling advisor and author of Story-Driven (and nine more books on storytelling and marketing).

That’s why every marketer and business owner needs to do market research. It is a crucial element of business strategy, product development, positioning, and marketing. It empowers you to understand and serve your customer better, whether you are a small business or an enterprise.

Here are five benefits of market research to consider:

 

1. Find gaps in customer expectations

 

Customers aren’t buying products or services—they’re buying outcomes.

What are they hoping to achieve with a purchase? How does it affect their work, their team, their own business?

Market research sheds light on the questions, challenges, and behaviors your ideal customers do before they choose a solution (or a type of solution). It helps you understand what they expect their purchase will help them do.

If your product or service doesn’t match those expectations, you’re risking high customer churn and negative reviews. Market research allows you to tweak your offerings to maximize customer satisfaction and retention.

Market research - fit gaps

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.

Market research

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.

Market research

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.

 

Market research

What are the types of market research?

 

Each one of your market research efforts will fall into one of two categories: primary research and secondary research.

Types of market research

Primary research

 

Primary research is research you conduct yourself, or by someone you hire. It collects information directly from the source—people in your target market, your customers, past customers.

In primary research, you gather original data using:

Primary research is powerful because it leads you to raw data collection, which you can then further dig into to get conclusive results.

 

Secondary research

 

Secondary research is research that involves existing data that was initially collected, compiled, organized, and published by someone else.

This includes existing research reports ranging from census data to scientific studies, experiments other companies ran, peer-reviewed studies, infographics, and more.

You can find data for secondary research through resources such as:

The challenge of secondary research is that it isn't made with your specific needs and objectives in mind, but it’s often a great place to start—especially if you’re low on budget.

Always check the date of the research you’re referencing to make sure it’s recent and still relevant.

When do you need to perform market research?

 

Not yet convinced you need market research? We firmly believe every company, new and established, needs thorough market research.

Market search is useful when:

1. When starting a new business

 

Launching a new business? Statistics aren’t stacked in your favor. Data from US Bureau of Labor Statistics shows that around 20% of new businesses don’t make it past their second year. About half of businesses make it to five years, and only a third survive a decade.

No matter how transformative your business idea feels, market research will help you understand not only if there’s the need for it in your target market, but also:

  • The competitors you’re up against

  • How your target customers describe their needs or pain points

  • The price your potential customers are ready to pay

  • Their decision-making process

  • The channels and formats they prefer when consuming content

...the list goes on. Market research will give you a solid foundation for a plan of action—all based on data, not assumptions.

Market research

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.

Market research - as your business grows

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:

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.

Market research for marketing campaigns

You’ll get insights to define your:

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.

 

Katelyn Bourgoin, a customer-obsessed marketer and the founder of Customer Camp, says, “Having real conversations with real people spending real money on solving real problems will offer you so much more insight into the buying process.”

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 -

 

“Our marketing team also reads chat logs and customer emails, customer complaints and reviews, and listens to sales calls and demo calls, on a regular basis,” added Luke. Focusing on these insights helped Global Call Forwarding significantly increase the average contract value (ACV) of new customers.

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.

 

On top of that, Petra reaches out to their best, happiest customers to learn why they love using the software. She also focuses on those that use the software extensively and suddenly stop. “The main goal here is to find out why they churned and if it’s something related to our product, rather than them changing their business needs,” she explains.

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.

market research - competitor analysis

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.

 

Take note of different strategies and approaches you find. “This information can be limited, but gather as much information as you can. Study their company profile, key advantages, offerings, marketing strategies and channels, pricing, and anything relevant to your industry,” adds Namratha.

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.

 

We used our use case research to map out six different use cases, including Total Talent Partner (where we place a recruitment team within a client’s company) and Talent for Startups (a monthly, non-committal subscription to help startups hire and scale in a consistent way),” adds GemPool’s Namratha Ambat.

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.

Interviews with industry professionals

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.

 

For GemPool, expert interviews also include HR and leadership teams within tech companies. “We speak to these leaders in the industry on a regular basis to understand their pain points around recruitment. For us, it’s key to get opinions from individuals working in the market as it allows us to tweak and improve our pitch,” explains Namratha Ambat.

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.

Focus groups and surveys

You can survey your:

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:

Pricing research

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:

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:

Data analytics screenshot

Brendan Hufford, the founder of SEO for the Rest of Us, said that SparkToro replaced an elaborate marketing research process he had at previous agencies.

He explains, “SparkToro gives me the true ‘who’ of the equation almost instantaneously. I know who my buyer personas are, who to interview, what groups these people congregate in online, who competitors are, and how people feel about pricing. Of course, it takes some second-tier digging into all of those things, but that lead time is cut almost to zero now.”

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.

 

That’s exactly what Marquis Matson did as the content lead at Sozy, a women’s clothing brand focused on comfortable, ethical clothing. She explains, “Google Ads fine-tunes ads to get the best return on ad spend (ROAS), so the audiences they have are quite reliable for understanding the target market.”

Marquis had some assumptions about Sozy’s target audience—like that they’d be ‘girly’ women who go to brunch and drink rose. This still may be true, but Google Ads data uncovered way more.

“I was surprised to learn that a lot of our audience is really active in organized sports, like CrossFit and intramural sports, and even outdoor sports, like hunting and fishing.”

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:

Website session recordings

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.

Present and implement your market research

 

Finally, once you collect all your market research data, it’s time to organize it and present it to your team and the rest of your company.

The key is to present your data in a way that’s relevant for each team, including:

 

For example, the product team might need every bit of information about your pricing research because it helps them anchor their product development and work on its pricing.

However, the sales team might only need a one-pager with competitor pricing and features their pricing focuses on as they often hear pricing questions from leads researching their options.

A great way to organize your research is through buyer personas—research-based profiles that represent your ideal customers.

You may think your buyer personas need a hypothetical name and a stock image of a person, but it’s quite the opposite: your buyer personas are best when based on their challenges and how your products or services help them overcome that challenge and achieve an outcome.

Your buyer persona can be a simple document that outlines your market research findings by listing your target customers’:

Add these for each of your buyer personas.

GemPool categorized their market research results into six buyer personas:

Your market research enables you to add details like motivations, struggles, exact wording, goals, and background your buyers shared with you.

When you share this with each of your teams, you establish a customer-driven culture across the entire company. Instead of guessing, assuming, or listening to the highest-paid person in the room (also known as HiPPO, or Highest Paid Person with an Opinion).

You get to listen to your customers when you develop your product, market it, sell it, onboard your customers and support them on their journey.

 

 

Kick-off your market research efforts

Take action from this article today. Even if you start with one research method and example we covered, you’ll make important moves for your business.

Remember: market research is even easier when you have in-depth data about your leads and customers to support it.

If you need a powerful CRM system to help you get there, try Freshsales Suite for free.

Market research