Aim for research that gives a good mix of statistical information together with feedback and opinions – both types of data are invaluable in their own way.
Market research is essential for the survival and growth of your business, especially in the current environment where we have seen customers and markets change significantly. By carrying out sound research, you can find ways to stay competitive and reduce your risks.
Market research is an information-gathering exercise about the wider environment that your business operates in. Instead of relying on gut instinct, it leads to informed, solid decision-making. For example, if you’ve got a business idea, you can use research to estimate your potential market share.
Use our guide to find out more about the different types of market research and how to start your own.
Why is market research so important?
Although you can pay consultants to do your market research, the good news is that you can easily do it yourself. Aim for research that provides you with a mix of statistical information together with feedback and opinions – both types of data are invaluable in their own way.
Asking people directly through focus groups and surveys are ways to get answers to specific questions.
You can access lots of existing research data from other sources including:
- Libraries, directories or the Internet
- Trade or industry bodies, or Chambers of Commerce
- The Australian Bureau of Statistics
- Local council or government business resources
- Your local Business Enterprise Centre
- ANZ’s Small Business Sales Trends Report
Market research will be a critical business activity whether you’re just starting out or well established.
Use email questionnaires
Email questionnaires are cost effective and fast, but response rates can be low. Incentives or free products can help to increase response rates.
Ask customers’ permission to email them and provide assurance that their details won’t be sold. Give customers an opportunity in every email to unsubscribe and make sure you’re complying with privacy and anti-spam legislation. If in doubt, check with your legal adviser about this.
Create a customer database
Building up a customer database for statistics and surveys is an invaluable research tool. Again, be careful to comply with the law – there’s strict legislation around:
- the type of data you can keep
- how you can store data
- how long you can keep customer data for
Speak to your legal adviser for more clarification on what you can and can’t do with customer information.
Capture your own sales data
Create internal systems to capture key information in the everyday course of dealing with your customers and suppliers.
This data can answer questions like, “what’s the average value of our sales?”, “how often do customers purchase on average?” and “who are our high-value customers?”
Give careful thought to the information that will be useful to you and design your systems from there.
Gather general market intelligence
You’re almost certainly carrying out informal market research already whenever you:
- talk to staff and customers
- check out competitors
- see what’s in the media
All good entrepreneurs and business owners are constantly watching what’s happening in the market.
The founder of Wal-Mart was famous for the time he spent at the coalface of his business. He wandered around stores, talked to employees and customers and rode along with delivery drivers.
By investing time this way, he was able to absorb information about the market that he couldn't have found out from his office.
Face-to-face interactions are just as important for gathering market intelligence as your business grows.
Getting the most out of your market research
Maximise the return on your investment by making sure you take the results of your market research on board. Feed the information directly into your business plan and marketing plan, and use it to keep fine-tuning them both.