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Market Research: The How, What, and Why

When you hear the words market research, your first thoughts may be of big corporations and expensive reports. Perhaps you’ve heard the term “white paper” thrown around vaguely or maybe your bank has told you to get some data to back up your planned business expansion.

Market research can be a bit of a buzzword in today’s business environment. What is it exactly? And how can it benefit your small business? Let us break it down for you.


What Is Market Research, Exactly?

Market research is finding out more about your industry to understand customer behavior and consumer trends. It’s learning what your consumers want, who they are, and what drives their purchasing decisions.

In a nutshell, market research answers the following questions:

  1. Who are your customers?

  2. What are their buying patterns?

  3. Why do they buy?

  4. What will make them buy more?

It’s not just big companies that need market research

As we mentioned before, you may think it’s just big corporations that use market research. But this isn’t the case!

All businesses can learn from and benefit from market research. There are a variety of ways to get data and not all of them are out of your price range. We’ll talk through a few ways below.

Why your small business needs market research

Market research gives businesses an outside view of their market. This data is invaluable for your business as you operate, make decisions, and plan for the future.

Your company can also learn about shifts in your customer demographics and product demand. You can learn if the market you’re operating in is suddenly saturated, or teeming with other competitors. You could learn if your pricing is appropriate for the product or service you offer. 

You need data to drive your decision making.

In addition to insights into your specific business, market research can help you find out more about broad changes in your industry like:

  • Technology trends
  • Increase or decrease in competition
  • Changes in consumer habits
  • Changes in market size or makeup
  • Outside threats
  • Changes to socio-economic behavior

How Should a Small Business Perform Market Research?

Market research is usually expensive. Some giant companies spend tens of thousands of dollars on reports that they never use. This is hard to imagine, but it’s true! 

As a small business, you may be wondering how exactly you should participate in gathering data. There are a few ways to do this at no cost or a low cost.

  1. Determine what it is that you need to know
  2. Prioritize the top data needs and focus on those.
  3. Explore less expensive options or consider doing it yourself.
  4. Consider aligning with other small businesses to collectively gather relevant data in an inexpensive way.

Consider a recent example: The Bike Cooperative

The Bike Cooperative is comprised of member bike shops from across the country. By coming together as a collection of small businesses, they created the scale to develop and access a number of member solutions like hiring tools, loyalty programs, in-store financing and – you guessed it – market research.

According to an article in Bicycle Retailer and Industry News (BRAIN) – their most recent data project was hands-on from the Co-op member perspective. This ensures that each member store got answers to the questions that would inform the decisions of their individual stores. 

With the group’s busiest season of the year rapidly approaching, the results of this survey gave members a valuable insight into buying, inventory, and shifts in the market that are influencing which products consumers are looking to purchase, and how. 

“[The Co-op’s] advisory council worked on the questions we wanted to ask, then our research partner took them out to a panel of over 1,000 randomly selected consumers, who either own or ride a bike” 

Linsday Gaskins
President of The Bike Cooperative 

How to Perform Market Research With Your Small Team

Now that we’re in the internet age, a number of resources are available that haven’t always been around. Through a little extra work and maybe a few millennial interns you’ll be able to compile data in no time.

Online Surveys

Use online surveys and questionnaires to ask consumers questions about your product offering, demographics, purchasing decisions, and more. There are many options – an easy one is Google Forms. For the best data, make the survey anonymous.

How do you get the word out about the survey? Use the email list you’ve been building! Get started by tapping into the basics of email marketing, with: Email Marketing Basics for the Busy Business Owner 

Focus Groups

Host focus groups of customers or potential customers to collect in-person feedback about product line, service offering, pricing, brand perception, and more. This is more time-intensive than an online survey, but may yield some positive interactions and opportunities for helpful feedback.

Interviews

Consider doing a few in-depth interviews with consumers or potential customers. 

Pull Information from Social Media

This one would be especially good for the millennial intern. Look at social media to gather data. It’s sometimes surprising what people already share on their own. Consider a Facebook poll or other informal ways of collecting data.


Market research provides valuable insights for your small business as you navigate the changing climate of 2020. Consider working with other small businesses in your industry to gather data collectively or do the research yourself. You’ll be glad to know the trends influencing your business. Let the findings drive your future decision making.


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