How Well Do You Know Your Market?

Who are your customers? Knowing your target client audience is one of the most basic aspects of your marketing plan. You can’t plan effectively without knowing the answer, and yet many small business owners play a guessing game when it comes to analyzing their current and potential customers.

Products and services fulfill needs. It is one thing to know that your products are precision made, but it’s another to recognize the type of buyer who will pay more for higher quality products.   Your pricing strategy depends on understanding your customers as well as your products.   What customers do you have?  What customers do you want?  Are you appealing to the bargain seeker, the quality fanatic, or convenience buyers?   Are your products better suited to large wholesale buyers who want no-nonsense widgets that are streamlined and reliable?

Conducting Market Research

The matrix of product specifications and customer personas can get complicated. The best way to discover the right market for your products and services is to take the time and effort to do some thorough market research. By conducting market research, you’ll be able to identify today’s opportunities and tailor your offerings accordingly. Market research is the science of gathering, categorizing and analyzing consumer and other data. By applying the results to your small business, you can begin to understand not only where the big opportunities are, but where some of the biggest risks are, too. You can often spot potential problems in time to develop effective workarounds.

The term “market research” sounds daunting and expensive, but it doesn’t have to be. Effective market research does three things: identify selling opportunities, provide facts about the competition, and uncover useful information about your industry. Market research is usually broken into two broad categories:

  • Primary research – This is the type of hands-on stuff you can start getting familiar with today. It may involve casually interviewing customers, or asking visitors to your store or website to fill out a brief survey. One advantage of primary research is that it can start small and grow as you grow. Just be sure to have a way to track the information for future reference. Begin thinking about the types of details that will help you market more effectively: What’s the average age of your customer base? What type of income range are you typically dealing with? What complementary products are customers buying? Are they buying online or through retail outlets? What uses for your products are most popular? Targeting these questions will give you the basis for a great questionnaire.
  • Secondary research – This is statistical data and supplementary information gathered by others. It might be a targeted mailing list you’ve purchased for a special promotion, or summary information from a trade organization. For example, it could be census data you’re using to determine the best location for a retail space. Secondary research can be free or expensive. It depends on what information you’re after and how hard you want to work to find low cost data options.

The U.S. government has lots of statistical information free for the digging, but you’ll have to slice and dice the data results yourself. Other options are available through industry associations or web searches for sites like universities conducting studies that match your criteria.

Let us know what you think!