Best Tips for Understanding Your Market Better

CX Strategy

Strategic Insights: 7 Tips for Understanding Your Market Better

Feb 9, 2024

14 mins read

Manisha Khandelwal

Every business operates within the context of the marketplace. The changes occurring in the market can affect your brand’s marketability and performance. Customers can have changing needs and preferences, and global events can influence your industry.

It is, therefore, important for businesses to continuously study and understand the market. This knowledge helps them make better decisions that contribute to their success.

Market research is also a lucrative field to enter, as many firms and organizations see the value of their services. In 2022, the global market research industry earned $82 billion in revenue.

If you plan to incorporate market research into your business operations and decision-making processes, read below for our seven helpful tips.

What is Market Research?

Market research is the systematized process of gathering, analyzing, and interpreting information about a market. The process often involves data about potential customers, competitors, and the industry.

It provides businesses with relevant data to inform decision-making processes, strategic planning, marketing strategies, and other operations.

One vital aspect of market research is understanding one’s customers. It helps businesses identify their target audience’s needs, preferences, and behaviors. This information is essential for brands to develop and offer products and services aligning with customer expectations.

Market research also involves studying business competitors to understand their strengths and weaknesses. This information can help businesses improve their positioning in the market and identify areas where they can gain a competitive advantage.

Good research practices are essential for accurate and useful research, no matter your industry. Keep reading for some useful tips.

7 Expert Tips for Better Market Research

In the dynamic world of business and marketing, conducting market research requires skill and strategy. The insights you gain from the process can lead to informed decision-making and sustainable growth.

Here are seven tips to ensure your market research endeavors yield meaningful and accurate results and insights.

1. Choose the Right Research Methods

Several research methods and instruments are available for businesses to understand the market. Choosing the right ones is crucial for gathering relevant and actionable data.

Know the information you seek and select your methods accordingly, whether it’s customer feedback surveys, interviews, focus groups, or a combination. Align the methods with your research goals and the nature of the information you seek.

For example, if you want to know how many people use Apple TV VPNs, you can conduct a simple quantitative survey or poll. However, if you want to know why, you can conduct one-on-one interviews or organize focus groups.

2. Use Reliable Information Sources

Like research methods, there are several information sources your business can use. Before taking any information as fact, assess whether it came from a reliable source. 

Read each information source, article, or study to confirm whether they used proper methodologies and metrics. Whether it’s industry reports, government publications, or reputable databases, basing your research on reliable sources supports the validity of your findings.

Good judgment and discernment are essential in this stage. Reliable sources can differ for each industry. However, some reliable sources include government websites and established research institutions like the Pw Research Center and the Brookings Institution.

3. Understand Your Customers

A deep understanding of your customers is fundamental to effective market research. Know who they are. This information helps your business select the correct sample groups of research participants.

Selecting the right people to participate in your market research allows you to gain more accurate results and informative insights. 

Go beyond demographics and explore their motivations, pain points, and behaviors. This holistic understanding forms the foundation of customer-centric strategies. 

4. Don’t Make Assumptions

Making unfounded assumptions is a common pitfall in market research. Writing down beliefs can skew your results and lead to inaccurate insights.

Let the data guide your insights rather than preconceived notions. By remaining open-minded, you create room for discovering unexpected trends and valuable findings.

5. Ask the Right Questions

Crafting well-thought-out questions is an art in market research. To guide your question-crafting process, identify the information you plan to find. Different types of questions can work best with specific research methods.

Ensure your questions are clear, fair, and designed to elicit the necessary information. Strategic questioning leads to richer and more meaningful responses.

Start asking the right questions at the right touchpoint with CSAT surveys.

6. Be Transparent

Transparency is critical in building trust between you and your audience. When communicating with respondents, discuss the purpose of your research, how you will use the data, and what benefits the process may bring.

Clear communication with your audience and respondents helps with their cooperation and ensures your research stays ethical and credible.

7. Conduct Research Regularly

Facts and trends change all the time. Businesses and organizations could benefit from regularly conducting market research efforts.

Regular research ensures that your insights stay current and relevant. Try implementing a continuous or regular research cycle to remain agile in responding to market shifts.

Or you can simply consult with a market research company like Neurosensum. They have the expertise and tools for any kind of research you require – in the time you want.

The Importance of Understanding Your Market

Conducting market research takes careful work and strategy. However, the results are often worth it. The insights you gain from the process can help you achieve long-term success and a competitive edge. 

Read below for a closer look at why gaining insights into your market is a strategic effort.

This image shows three people understanding their market by pointing at the silver laptop

1. Better Customer Relationships

Understanding your market is synonymous with understanding your customers. Market research allows you to delve into their needs, preferences, and behaviors. 

These insights allow your brand to foster stronger and more meaningful client relationships. This trust and loyalty help lead to repeat business, customer retention, and positive word-of-mouth.

A 2022 survey found that 74 percent of customers define brand loyalty as something that comes with feeling valued and understood. The same survey saw that 64 percent of customers prefer purchasing from a brand that knows them.

2. Improves Products and Services

Market understanding is critical in helping develop your brand’s product and service offerings. 

The insights you get from analyzing customer feedback and market trends allow you to refine or create new offerings. 

You can adequately meet your customers’ preferences and market needs this way, ensuring your products and services stay relevant.

Harvard Business School encourages businesses to look at their market research data to improve their innovation efforts. Talking to existing customers or clients can help you identify pain points and additional features you might want to consider.

Amazon, one of the world’s largest and most profitable companies, also shells out billions of dollars for research and development. In 2022 alone, the company spent over $73 billion on R&D.

Gather Real-Time Customer Feedback with SurveySensum.

3. Strengthens Business Position

A thorough comprehension of the market landscape empowers businesses to position themselves effectively. Market research enables you to know where you stand in relation to competitors.

This understanding of your current situation in comparison to your competitors and other market factors allows for better strategic differentiation. As a result, businesses can establish a solid and defensible market position.

A strong brand positioning also helps you attract loyal customers and clients. A recent survey showed that 81 percent of consumers see trust as a deciding factor in their purchases.

4. Identifies Threats and Opportunities

Market insights enable businesses and organizations to identify threats and opportunities to their enterprise and industry. 

Regular and consistent research allows you to spot competitors and industry changes. Aside from risks, market research enables you to spot opportunities within your niche. These opportunities can include new industry or audience trends.

While your brand alone might be unable to stop these external factors from happening, you can still use this information to adjust your strategies. Early identification allows for proactive decision-making and the ability to navigate challenges effectively.

SWOT (strengths, weaknesses, opportunities, and threats) analyses are popular across businesses and organizations worldwide. A company can perform this analysis internally. 

Interested parties may also conduct their own analysis backed by research. Finance or business institutions can write SWOT analyses of popular companies. A recent example is Yahoo Finance’s SWOT analysis of the DDOG Company.

5. Spots Emerging Trends

Staying ahead of the industry curve requires a sharp eye on emerging trends. New trends come up all the time, affecting consumer behavior and demands. These changes often dictate what products, services, and marketing strategies work best with new and potential customers.

Understanding your market allows you to identify shifts in consumer behavior, technological advancements, or industry developments. Following and responding to emerging trends allows your brand to stay relevant and marketable amidst changing market conditions.

A popular example of effective trendspotting is the companies that adopted TikTok early on. The platform wasn’t that big when it came out, but now it stands as one of the most popular marketing platforms. In 2022, TikTok made $4 billion in ad revenue, showing brands’ willingness to advertise on the platform.

6. Enables Risk Reduction

Relevant information and insights are powerful for risk reduction strategies. Understanding past and current market dynamics helps businesses anticipate upcoming trends and mitigate potential risks. 

This proactive approach safeguards your organization against unforeseen challenges, providing you with an action plan for various situations. As a result, your brand can enjoy long-term stability and resilience.

Research firms like McKinsey often publish their findings on the common risks businesses face. In recent years, the most common ones identified included pandemic effects, climate change, and cybercrime.

7. Sets Revenue Projections

A comprehensive and accurate market understanding forms the basis for more precise revenue projections. The market research process helps brands look at various factors, such as market demand, pricing dynamics, production costs, and customer behavior.

Gathering and analyzing this information helps businesses develop more realistic financial forecasts. This insight is essential for budgeting, resource allocation, and overall financial planning. 

Finance institutions like Investopedia and American Express strongly suggest researching external factors alongside historical sales data in setting revenue projections. These different data sources allow companies to create more accurate forecasts that reflect internal and external factors.

Revenue projections are also vital for businesses pitching to investors and other external stakeholders for assistance.

8. Optimizes Marketing Efforts

Effective marketing efforts must align with market trends and audience needs or preferences. Businesses and their marketing teams must understand customer demographics, behavior, and preferred channels to create more targeted and effective marketing campaigns. 

Market research is an essential part of any marketing strategy, as it allows brands to determine how to best communicate with their audience. The global market research industry experiences an annual growth rate of 8.4 percent, showing that businesses prioritize understanding their audience at an increasing rate.

This optimization helps businesses maximize their return on marketing investments. As a result, businesses become better at attracting new customers and retaining existing ones. They can better communicate their unique selling points and stay memorable in the minds of their target audience.

Types of Market Research

Businesses can explore various forms of market research to achieve different goals. Employing diverse market research methodologies allows businesses to gain diverse perspectives and market insights to aid their initiatives.

Read below for an overview of the many market research methodologies businesses and organizations can use.

This image shows 5 persons discussing market research methodologies

1. Interviews

Interviews often refer to one-on-one discussions about your target individuals’ thoughts, opinions, and experiences. 

You can conduct interviews in person or online, allowing for a more natural conversation flow. These one-on-one interactions also help facilitate a better understanding of body language, facial expressions, and other non-verbal cues.

This research method can be structured, semi-structured, or unstructured, depending on the level of flexibility and guidance needed in the conversation.

Interviews are an excellent way to understand individuals within your target audience and their different characteristics. The information you gain can be an excellent resource for forming buyer personas and getting general feedback about your brand.

2. Focus Groups

A focus group refers to a qualitative research method that involves bringing together a small, diverse group of individuals. This group will then discuss and provide insights on a specific topic, product, service, or concept.

This research method helps businesses gather in-depth information about participants’ attitudes, opinions, perceptions, and experiences related to the subject. Focus groups help brands and participants uncover collective perspectives and encourage interactive discussions.

These discussions often require the supervision of a skilled moderator. The moderator helps guide participants throughout the discussion by posing open-ended questions. These questions and guidance encourage interaction and explore different perspectives from each participant.

Let’s say you plan to break into the home financing market. You might want to organize a focus group on the types of home loans available to consumers. You can discuss conventional private mortgages or government mortgages like FHA home loans.

3. Market Segmentation Research

Market segmentation research refers to the strategic process that involves dividing a target market into distinct groups or segments based on shared characteristics. 

This process aims to help organizations better understand the diverse needs and preferences of their different customer groups. As a result, businesses can better tailor their products, services, and marketing strategies to effectively communicate and satisfy each segment.

This type of market research acknowledges the inherent differences within your brand’s audience. It helps you better understand that one approach might not work for every person in your target market.

Market segmentation allows businesses to improve their personalization efforts, helping them connect better with every audience segment.

4. Buyer Persona Research

A buyer persona refers to a fictional profile that represents certain or ideal customer groups. These profiles could be incredibly detailed, including customer demographics, behaviors, pain points, and motivations.

Buyer persona research refers to the process of understanding your customer base and creating these customer profiles. It can involve surveys, interviews, focus groups, polls, or other research methods to gather the necessary information for your buyer personas.

This is an image of the Buyer persona example which shows various audience segments

5. Product or Service Use Research

As the name suggests, product/service use research involves investigating how your customers interact with your products and services. It allows you to gain insights into the usability of your products or services.

This market research type is vital for product development or innovation processes. It enables your business to gather user feedback and gain insight into usage patterns, behaviors, and satisfaction levels.

Product or service use research helps identify areas for improvement and enhance the customer experience.

6. Pricing Research

Pricing is a critical component of what makes products or services marketable and desirable to customers. It is also a significant factor in determining a business’s profitability. For this reason, companies must thoroughly think about their pricing decisions.

Pricing research helps companies systematize their pricing decisions and ensure they set prices according to relevant factors. These factors include consumer perceptions, willingness to pay, and market dynamics.

This type of research allows businesses to determine an effective and competitive pricing structure that maximizes revenue, satisfies customer expectations, and enhances market positioning. It helps companies strike the right balance between profitability and customer satisfaction by understanding the perceived value of their products and services.

7. Competitive Analysis

While looking internally at your business is critical for improving and optimizing current processes, it’s also vital to study one’s competitors. In market research, competitive analysis refers to the systematic process of gathering and evaluating information about competitors in the same industry or market.

This process aims to gain insights into the strengths and weaknesses of competing businesses, identify market trends, and inform strategic decision-making. 

This type of research helps businesses and organizations understand their market position compared to their competitors. It allows companies to anticipate and prepare for industry changes and identify opportunities to set themselves apart.

Accurate Insights, Better Decisions

A market research strategy is essential for your business to make smarter decisions and navigate the market more confidently.

Understanding the impact of market research and implementing best practices allows you to enhance your research processes and gain relevant insights. These helpful practices and insights help position your business for strategic growth and sustained success.

Manisha Khandelwal

Senior Content Marketer at SurveySensum

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