The advancement of technology has given us so many ways of finding out what we need to do to sustain businesses of different kinds.
Regardless of the differences that are unique to each business, one thing remains important – knowing what your customer base wants, and then work on fulfilling their needs in order to survive from the competition.
With the era of monopolies now gone, it makes it very essential to on market research. That is why the major companies in the world employ the services of marketing teams and spend millions of dollars annually in recruiting research firms. Here are some reasons why you need to spend that money on research.
To have a better idea of what you are going to do
This may sound generic as ever, but the thing is – it shows you the importance of conducting research in the first place. Leading SME business specialist Richard Alvin, and chairman of specialist SME research company commented Trends Research said: ‘The worst mistake you can make as an entrepreneur is shooting in the dark – you simply waste your time and resources without anything to show for it. You may make mistakes along the way even if you have sufficient information, but it is better to be prepared.’
Whatever decision you make for the business, it is important to do your homework. From sourcing for suppliers, getting potential clients, and even developing the range of your products and services. It can also help in clearing up any queries that you have while still providing you with sufficient first-hand strategy that helps in progressing the business, also known as SWOT (strengths, weaknesses, opportunities and threats).
It helps you to stay focused
Let us be honest here – marketing research and marketing in general is not an easy venture to get into, especially with all the multitasking that happens today. Even as a business owner, you might find yourself trying to focus on multiple projects, playing various roles within your organization, while still running the business and trying to help it succeed.
However, when you have done sufficient market research, it should inform you what your consumers want. This helps you make a list of priorities you need to accomplish, which in turn helps you in managing your time as effectively as possible. It also gives you a guide on both the long and short term strategies you need to put in place, which helps you feel more organized, less frazzled and overwhelmed in the long-term.
Gives you better insight on your customers
Regardless of whether your business has been in the game for a long time or is starting out, target customers should always be a priority, as they are either potential or loyal customers. Good market research strategies will clear doubts you may have on the identification of these customers, including their gender, ages, locations, and so on.
The more analysis you do on their spending habits and products they frequently purchase, for instance, the better you can understand what makes them tick. This allows you to focus on manufacturing certain products or giving certain services in order to retain them as loyal customers.
Helps in understanding customer behavior
Aside from getting to know potentially loyal customers, you can use market research to find out some requirements of the customers. The improvement of technology has given us some useful advanced software tools such as Google Analytics, which assist you to understand the behavioral patterns of your customers. Oncetheir spending behavior is understood, you can then refine and customize various products for them. These software tools can use the data in two forms. One is tracking the spending habits of the customer when they are online, which is a real-time analysis (it particularly works if you have an online shop), and the other is to check their past spending behavior to see if there are any patterns involved.
Helps in analyzing competitors
If you have ever read the book ‘The Art of War’ by Sun Tzu, it states that for you defeat your enemy in battle, it is important to know yourself and know them, and they will never defeat you. This statement is true; not just in war, but also in other aspects of life – especially when it comes to running a business. Monopolies do not exist anymore in this day and age, so every business has fierce competition all around it. This should motivate you to do adequate research on the market as well as your competitors, and you may learn some strategies from them that can either push you ahead or reduce the growth of your competitors.
Even more important, it will help you to keep your growth consistent through the improvement of your services and products.
Gives you adequate information for selling and forecasting activities
The most important focus of sales forecasts is helping a business keep adequate inventory, an action which regulates the balance of demand and supply. The only way to find this out is through doing research. After doing a sales forecast you can then begin to plan for alternative goods you can sell, or find new methods of selling the goods. In addition, you may have consumer bases in other countries; market research allows you to find them and tailor make strategies for those areas.
Reduces losses and risk on a significant level
The best approach to use would be a contingency approach. At the back of your mind, you remember that the business may not do well due to factors that may be beyond your control, or others may be mistakes you will learn along the way.
Market research proves to be effective at reducing risks that you incur or the losses your business may suffer, as long as it has concrete findings to back it. It helps in avoiding mistakes such as poor pricing methods and poor marketing, so that your business has a fighting chance of thriving.
Making your business succeed in the face of increasing competition is not an easy thing, and that is why market research exists – to enable you find weaknesses you should improve on. With these tips, investing into proper research is justified, and it will give your company great benefits.