Photo (CC) Justin Grimes, on Flickr

A lot has been written about how market research will help you achieve business success, and many of these claims are true.

That connection, however, is not a simple, direct link. Collecting information about your potential market is useful only if you take the next step of analyzing the data.

Data analysis yields clues about who your customers are, what they are buying and problems they face. It provides you with an insight of the benefits they are seeking.

Data analysis begins before you even start collecting the information. Thinking about the questions you want answered. This guides the data you need to collect. Remember to start with data you already may have:

• Customer lists – Do the lists answer how much customers spend, when they buy and what they buy?
• Effectiveness of your marketing – Are your customers responding to your marketing and advertising efforts? If so, what efforts are working best?

Your local chamber of commerce or economic development office will also have information about the trade area and the people who live there.

You also can get information from third-party sources. Trade journals, news magazines and papers, plus writers you find online or in books, often share information about your target market.

Finally, vast amounts of data are available for free from the state and federal government. Here in North Dakota, you might check out ND Compass and the U.S. Census Bureau. Both of these are adding tools to make data analysis easier for anyone.

After having examine the information available, then look for the gaps. Make plans to fill those gaps.

Tools to help collect such information include surveys (paper, oral or electronic); contests structured to provide feedback information; checkout data, such as asking a question or two as a person is checking out; and customer feedback. Data also can come from observation, interviews or simple testing. Data collection can be done one-on-one, in a group or through the mail.

But to this point, your data is just numbers and words. The return for your effort comes from making sense of the information. You can use in-depth statistical packages or textual analysis software. Many business owners start by putting numbers into a spreadsheet and looking at frequencies, charts and graphs. The idea is to see if any trends emerge. The same goes for textual information.

Having others look at your initial findings is helpful. This is a good time to have your mentors and advisers review the information and have some frank conversations about what everyone is seeing. Different interpretations will emerge, giving you greater insight. If you can supplement the numbers with customer conversations, then your analysis will yield even more.

It sounds complicated, but it’s really not. Start simple and build your skills and your database. You don’t have to collect everything at once.

When doing market research, balance what you need with the cost and time required to get it. Don’t forget to take into account your customers’ perspective, how much time are they willing to give and what information might they want to keep private.

Building your business means knowing your customers. Good market research can help you know your customers, so start your effort today.

Photo (CC) by One Way Stock, on Flickr

Knowing what your customer wants is the base to building a successful business.

Of course, you still must meet that need, let customers know you have what they want, and price it at a level that customers feel is acceptable. But the process begin with knowing the problem they are trying to solve.

Market research is how to get the answer to this question.

Small-business owners need to use market research. When doing so, they also need to remember that all customers are not the same and that desires change through time.

Examining and understanding each part of the demand for a business’ services and products will help the owner be far more precise in understanding and planning how to meet the demand. Just like owners know that customers have a variety of responses in terms of acceptable prices, customers vary in the specifics of what they want.

To understand the idea of market research better, let’s look at food-related businesses.

People need food to sustain themselves. Thus, the need is very basic. Yet the demands for food can take a variety of paths, which offers business owners various opportunities.

When thinking of the opportunities, an owner might begin with the foods your customer grew up with in terms of heritage, culture and local offerings. This is only the beginning today, however. Now some people want to experience new things. Others would like to do it themselves, while some want the foods already prepared. Of those who want it prepared, some want to do the final cooking at home, while others will get it from a full-service restaurant.

So one desire can turn out to be multiple desires and multiple opportunities for a business. This does not even take into account the fact that for customers, the choices aren’t an either/or but are somewhere on a continuum. 

As a market researcher, you shouldn’t stop there. You have individuals who need certain specific diets and others who just desire such a diet. You also have people who want the items grown locally and those who are happy to accept getting what they want from whatever source that will provide it.

Market research can find these niches. Each one may (emphasize the “may”) be an opportunity for a small business or a new line for an existing business. Knowing what the customer wants may not tell you a specific business to start. You still need to determine which of the opportunities is the best for you. 

Market research is not a one-time task, though. Times change, people change and our worldview changes. People age and travel, and technology brings new ideas. Thus, an opportunity today might not be there in five or 10 years. Look at restaurants that come and go. Think back to what grocery stores offered 10 years ago to what they offer today. Or go to a different region of the country and see how a grocery store’s offerings differ just based on regional differences.

Being successful in business means knowing what the customer wants. Knowing what your customer wants comes from ongoing market research.