Market research is designed to help your business grow by identifying the size of the market for your product or services, who the consumers in that market are, and the best ways to communicate with and appeal to them. Too many startup businesses don't put money into research, either thinking it's little more than a sales tip or it will be too expensive, and even established companies sometimes bypass it to avoid the possibility of getting any negative feedback. If you want your business to thrive and grow, it is important that you understand everything you can about your consumers and the marketplace.
There are two basic types of consumer and market research: primary and secondary. Primary data, which comes directly from your consumers, is usually collected via interviews, surveys, and questionnaires. Secondary research is data that is collected from other sources, such as government agencies, trade associations, and research companies. Salespeople have an extraordinary opportunity to collect market research data every time they make a sales pitch or close a deal by simply asking questions. One sales tip many professionals miss is that you can get a deeper insight into your current customers by combining internal sales data with demographic data from other sources.
Market research should be at the heart of your sales strategy. If you're patting yourself on the back because you sold 1,000 widgets over the past month, you might want to take a step back and do some market research. You just might discover that 10,000 consumers in your area buy similar widgets each month. Instead of being up 1,000 widgets, you're actually behind the curve by 9,000 sales. Further market research should be able to identify those consumers demographically and let you know the best way to reach them.
A lack of market research can also cause you to miss out on emerging trends. If you run a small grocery store, for example, and you aren't keeping track of what your consumers want, you might miss out on the new "grocerant" trend, where money-conscious millennials are looking for more prepared meal options when they grocery shop, or that Twitter can be a valuable sales tool to reach your core consumers.
Consumers are changing the way they shop in the post-recession tech-savvy world, and retailers must get ahead of them and find out what they want to keep profits healthy. With so many options ranging from mobile advertising to social media, it can be difficult to keep up. Thorough market research will tell you where to spend your sales and marketing dollars to get the best return for your business instead of simply putting money into mechanisms that might not give you the returns you are looking for.
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