Although there is no one-size fits all definition, Market Research can reasonably be defined as the activity of gathering and analysing information (data) to answer questions about your business or organisation and its products or services. This process, and the insight from it allows you to get closer to your customers and make more informed decisions.
What is the purpose of market research?
Market research can be used to answer very specific business questions and objectives. It can also be more exploratory, helping you understand the micro or macro environment in which your business operates. Basically, market research is a useful tool whatever the unknowns in a business.
Market research can be used to answer a variety of questions or problems. Some examples might include:
- How satisfied are customers with our customer service?
- What are the most important service aspects for our clients?
- What do customers think about our website?
- How do we compare with the competition?
- Will customers like our new product idea?
- Why are so many staff members leaving?
Why is market research important?
Market research is important because making important business decisions without supporting data can be a risky strategy. Good quality market research provides data-driven, robust insight to support business strategy and inform choices. If there is disagreement amongst stakeholders on the best direction to take within an organisation, market research can be a practical and fair approach to achieve consensus and move forwards.
What are the benefits of market research?
There are many benefits to be had from conducting any type of market research. One key benefit is to optimise your customer experience by seeing your product or service afresh through your customers’ eyes. Listening to what your customers have to say and responding to those insights with actions and improvements grows loyalty and brand advocacy.
The same is true of employee research. Understanding what motivates the people around you and taking the time to hear their thoughts and ideas on the business is a fantastic source of insight to drive innovation and streamline processes. Plus it builds employee loyalty and increases discretional effort.
Common market research methods
Three common methods used to conduct market research are surveys, interviews or focus groups, and observational research (or ethnography as researchers often like to call it). Of course there are myriad other variations and options but let’s focus on these three for now.
Surveys are great when you need to get feedback from a decent sample of your customers or potential customers. If you want to answer questions that start with Who? What? When? How many? then this could be a good type of approach.
Best suited to closed questions with a defined choice of possible answers. Keep it as concise as possible to avoid respondent fatigue. If you don’t know the profile of your typical customer, this can be a good opportunity to capture basic information on age, gender, life stage and so on. But don’t collect needless data. It’s unethical and will stop you focusing on the real questions you’re trying to answer.
Less representative of your whole customer base potentially, these data collection methods are great if your questions are more exploratory and open-ended in nature such as Why? How? You can select respondents based on specific criteria and really get to know them in depth and understand the emotions and motivations behind their actions and choices. It’s recommended to get a trained moderator to conduct this type of research to avoid internal bias and to be an objective sounding board.
Observational Research (Ethnography)
A bit like a fly-on-the-wall documentary, this technique allows you to watch your customers interact with your website/app or product in a realistic environment without the constraints or direction of pre-defined questions or a moderator. This is a very powerful technique as you see first-hand any blockers or confusion the customer experiences whilst accessing your services. It often produces insights and answers to questions you didn’t even know you had!
It can be used equally effectively to assess complete customer journeys and decision-making processes or very specific tasks or purchases. Great used in combination with other methods to provide structure around the observations.
With very few exceptions, market research projects should contribute to decision-making or solving business problems. The output of research may be interesting in its own right, but it should always go beyond providing insights and assist stakeholders in making more informed and smarter business decisions.
For any research project, big or small, please contact the Insights Team at Yomdel for a friendly chat and free advice. We are excellent listeners. firstname.lastname@example.org