Building a small business for the first time is really difficult! You have to create a product or a service that’s perfect for your audience. Then you have to tell people you exist. These two tasks are the essence of marketing. While they sound simple, anyone who’s tried them knows how tricky and nuanced it can be.

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Enter market research. It’s a straightforward concept: you gather data about people and companies and figure out what people want and need. Do it well and you’re well on your way to crafting the perfect products and services.

In this article, we’ll talk about what market research is and what tools you have available. Then we’re going to give you 9 specific steps you can use right now to grow your business!

Market research – what is it and why does it matter?

What is market research, anyway?

My favorite definition of market research comes from Shopify.

Market research consists of systematically gathering data about people or companies – a market – and then analyzing it to better understand what that group of people needs. The results of market research…are then used to help business owners make more informed decisions about the company’s strategies, operations, and potential customer base.

In short, you use all the information available to you to figure out what people want and how (or if) they’re able to get it.

Why bother with market research?

There are a lot of reasons to spend time on market research. In fact, if your business is still just an idea, you should focus heavily on market research at the beginning.

This fantastic article by Oberlo contains some reasons to perform market research, the best of which I’ll list here for you:

  • Determine the feasibility of new businesses. In short, you can see if people even care about what you want to make before you spend time and money making it.
  • Identify and develop potential new markets. Sometimes, you can watch new trends being born before businesses are able to act. Market research helps you find demand for products or services that don’t exist yet.
  • Test the demand of new products of features. This can be a real life-saver. Market research lets you check for product-market fit before you make a whole bunch of a product that no one wants.
  • Boost the success of promotional campaigns. When you pay attention to what people are saying online, you can tweak your messaging. Even our own company is working on doing this!
What are your marketing objectives and how does market research help?

Before you start a big research project, stop and think about what you want to come out of it. There are a few different reasons why you would initiate a market research project:

  1. Starting a business and seeing if it’s viable.
  2. Looking at related products or services that you want to start selling soon.
  3. Testing products or services that aren’t ready to be released to the public.
  4. Improving the ROI of current marketing efforts such as ads.
  5. Getting in touch with customers and seeing if you’re really meeting their needs.
  6. Keeping an eye on competition.
  7. Gauging the size of your current market and other markets.

This is just scratching the surface, too. The point is: think about what you want to get out of market research first.

Primary research vs. secondary research

As you might imagine, there are different kinds of market research. You can broadly categorize them into two types, though: primary research and secondary research.

Primary research

Sometimes if you want to get good information, you need to go right to the source. By that, we mean the customers!

Marketers over the years have come up with all kinds of ingenious ways to get customers to talk about what they want. Sometimes it’s as simple as informally asking questions. Other times, you want something more rigorous such as a well-made survey.

In any case, a few examples of primary research include focus groups, surveys, and interviews. Note that most primary research methods can be done in-person, on the phone, or online. It really depends on what you and your customers are comfortable with!

There are two basic ways that primary research can be used: exploratory research and specific research.

Exploratory research is where you have open-ended interviews or surveys. You never know what you’re going to hear from your customers, and that’s the beauty of it! Exploratory research is great when you don’t have specific questions you need answered.

But let’s say you do have specific questions that need to be answered. That’s where specific research comes in. With specific research, you ask detailed questions intended to receive precise responses to narrowly-defined questions.

Both kinds of research have their place. Think back to your objectives and really consider whether exploratory or specific research is more useful for you.

Secondary research

The problem with primary research is that it’s subjective. It’s very, very human and that has its ups and downs. Secondary research is more focused on quantitative data. You know the sort – trend reports, statistics, industry data, and more.

Secondary research is better in two cases. The first is if you need hard, empirical data instead of the softer, more human data gathered in primary research. The second case is when you need to analyze your competition.

Where do you turn when gathering secondary research? There are several places you can go:

  • Government statistics relevant to your industry
  • U.S. Census data
  • Bureau of Labor & Statistics data
  • Commercial sources such as Pew or McKinsey
  • Your own internal data sources (Google Analytics, social media metrics, sales figures, etc.)
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How do I do marketing research? (9 Steps)

Everything we’ve said up until this point is useful for understanding why market research is valuable. But let’s say you’re ready to just dive in and do it. That’s great!

If this describes you, we’ve come up with 9 steps you can follow. These steps will carry you through just about any market research project you can come up with!

1. Understand the basic purposes for market research

We spent most of the first part of this article covering it, but it bears repeating. Market research is best done with specific objectives in mind. You must understand the purpose of the research prior to conducting it for the best results.

If you want another point of view on this, check out this article on The Balance.

2. Know the tools you have available

We touched on this earlier when talking about the difference between primary and secondary research tools. Let’s now get into more depth. You have a lot of research tools at your disposal. Here are just a few:

  1. Surveys. Whether you use open-ended questions to collect varying responses or specific questions to collect neat, easy-to-classify responses, surveys are an excellent tool for learning about your customers. You can do them online, in-person, and over the phone.
  2. Focus groups. Sometimes the best way to understand what your customers like is to get 10 of them in a room. Send one person in the room to ask questions and another to take notes.
  3. Observations. If you have a physical product, give some customers the product and see how they interact with it. The same principle can be applied online by watching how users interact with your website.
  4. Interviews. One-on-one interviews are also a great way to understand how your customers think. In doing them, you can ask specific questions and see how they responses.
  5. Industry associations and trade groups.
  6. Trade journals.
  7. Government data. As we mentioned before, the Census and BLS typically provide great high-level data for business owners to review.
  8. Industry experts.
  9. Websites in general. When in doubt, Google it!
  10. Competitor websites. Nothing can tell you what competitors are up to quite like reading their website and social media channels.
  11. Your own web analytics. By paying attention to the pages your customers are accessing and staying on, you can figure out what kind of products or services are likely to go over well in the future.
  12. Your own email and social media analytics. By looking at your email and social media data, you can see which messages you’re sending that customers are responding to. That can tell you a lot about what they are interested in.
3. Define your target audience

No amount of market research can save you if you don’t know who you are selling to. Think long and hard about the kind of people who are likely to buy products or services from your business. Ask yourself some key questions such as:

  • What are my customers interested in?
  • Where do they live?
  • What kind of media do they consume?
  • How much money do they have?

The more specific your answer those questions and others like it are, the better able you will be to create products that meet their needs. After all, customers only choose to buy when they determine that your business is meeting a need!

4. Find your niche

If you really want to succeed in business, you need to find a niche. People have a finite amount of attention and a seemingly endless amount of options available to them. That means you need to laser-focus on a super-specific target audience and create a product that fits them so well and so uniquely that no one else can compare.

If you don’t know your niche, market research – particularly exploratory research – can help you find it. If you do know your niche, you can narrow down your more specific questions to be extremely relevant to the people you’re talking to.

5. Imagine your buyer as a real person (because they are)

Nothing makes companies feel out of touch like speaking about people in groups. You know what I’m talking about.

“Generation Z likes that, but Millenials like this!”

Get out of here with that! You need to think about your buyers as real, breathing individuals – because they are. Some companies such as HubSpot even recommend creating buyer personas. That is, creating a character – like in a novel, movie, or D&D game – and imagining them with certain characteristics. Those includes:

  • Age
  • Gender
  • Location
  • Job title(s)
  • Family size
  • Income
  • Major challenges

You don’t necessarily have to go through a formal “buyer persona” process, but the message here is clear. When coming up with questions for market research to answer, think of individuals and not groups.

6. Reach out to participants

It’s kind of a no-brainer, but you need to get in touch with people if you want to do primary market research. Here are a few ways you can do that:

  • Reach out to people who recently bought your product.
  • Send an email to regular clients.
  • Cold contact people on social media.
  • Use incentives such as free items or even money. (We use this when running contests for which one of the entry conditions is “ask a marketing question”).
7. Prepare your questions

Before you send a survey, set up a focus group, or call somebody for an interview, take a moment to write down some questions. When in doubt, stick with open-ended ones. Tailor them based around your market research objectives.

Here are a few generic examples to get you started:

  • What are your personal job responsibilities?
  • Tell me about your goals.
  • What has been your biggest challenge in the past year?
  • How familiar are with different options on the market?
  • Where do you go to look for more information?
8. Analyze your competition

Once you gather enough information, you will start to have a clearer idea of what customers want. Take a moment at this time to review your own website and your competitors’ websites. How does your company compare to others? Is your competition adequately addressing the needs which you have observed today?

9. Review the results

At long last, after the arduous process of collecting data from different sources – primary and secondary – you have enough to proceed. Take your time and organize your thoughts. Perhaps put together a brief summary report of your findings.

You can do all the market research in the world, but if you never take the time to properly review it, you’ll see limited benefits from it.

If possible and appropriate, take your research and come up with goals for the near future. Perhaps you will launch a new product or start using a new social media channel! The right moves depend entirely on your research.

Final Thoughts

To spend time on market research is to spend time well. Properly conducted, market research lets you understand your customers more completely as human beings. Your business can then adapt. You can come up with new ways to address your customers’ needs or even simply find new ways to reach out to them.

Either way, the benefits are clear. Schedule some time in the next month to conduct some market research. You’ll be glad you did!

First time marketing your small business?
We know marketing can be confusing. Download our free marketing checklist for advice.

53 Comments

Wanda B · January 9, 2020 at 9:37 am

Telling people that I exist sounds difficult. But, by taking the right courses, buying the right books to learn skills, really helps. It makes this all not so difficult at all.

    Brandon Rollins · January 17, 2020 at 9:47 am

    It definitely can be difficult, but it becomes much easier with time and practice!

    Donna L Holder · January 20, 2020 at 1:38 pm

    all of this sounds great. its hard to do

Arten Daelus · January 9, 2020 at 7:23 pm

Alot of great info.

    Brandon Rollins · January 17, 2020 at 9:47 am

    Thank you, Arten!

Rena Walter · January 10, 2020 at 10:23 am

Thank you for the info, it is very interesting!

    Brandon Rollins · January 17, 2020 at 9:47 am

    Glad you liked the article, Rena!

Gun Coaty · January 10, 2020 at 11:00 am

I often get caught up in the enthusiasm of an idea and start committing to work before I find out if I can generate that same enthusiasm in others. I can put a lot of effort into a product/theme without having any fruits to my labor. This makes it all feel a waste. I have learned that I need to pause, evaluate, and ask questions to others before I progress. I want to help, but where is my help most needed!?

    Brandon Rollins · January 17, 2020 at 9:46 am

    And many people are like you, Gun – they share a great passion and enthusiasm for creative work and for fixing problems. Combining that drive with a measured sort of introspection helps you solve the biggest, most important problems and make a lot of people happy!

Ryan Guerra · January 10, 2020 at 11:14 am

Thanks for the blog post! For point 7, do you have any parameters or suggestions around length, amount of time/questions?

    Brandon Rollins · January 17, 2020 at 9:42 am

    Hi Ryan, I’m generally a fan of short surveys and interviews. Surveys should be generally limited to 10 questions. Interviews should be a half-hour or less for most purposes.

    Longer than that in either case and there’s a chance that people will simply mentally check out.

Sevinj Ismayilova · January 10, 2020 at 1:46 pm

All the steps are really important

    Brandon Rollins · January 17, 2020 at 9:41 am

    Completely agree, Sevinj!

Ryan McLean · January 10, 2020 at 4:37 pm

Great article, thank you! I can’t wait to share this with my wife as she has struggled with marketing her small business. It’s crazy how much effort needs to go into getting these fountain steps in place. It’s probably never realistic to ‘hang a shingle’ and extract customers to start showing up…

    Brandon Rollins · January 15, 2020 at 8:42 pm

    Hi, Ryan! Glad you like the article and I hope your wife finds it useful in marketing her small business. Marketing is a really, really, really complex discipline to master, but don’t despair – the basics are straightforward and I have no doubt that she can pick up what she needs to know!

Kelcey W. · January 10, 2020 at 4:55 pm

After doing your research and finding out the audience that you would be able to reach already has access to many similar options as what you would like to provide, what should you do? Alter your product? Move? etc.

    Brandon Rollins · January 17, 2020 at 9:41 am

    Hi Kelcey, that’s a good question! If there are similar options to your product or service, that may actually be a good thing. It suggests the market is booming. However, you have to make absolutely sure that your business is doing at least *one thing* that other businesses are not, and you have to be able to articulate that easily to potential customers as well. If you can’t do that? Pivot.

Alejandro Pineda Fernandez · January 11, 2020 at 3:16 am

I am studying marketing and business management and this type of articles is great to reinforce concepts, thanks!

    Brandon Rollins · January 15, 2020 at 8:44 pm

    Glad you found this article helpful, Alejandro! We like to keep our posts nuanced and information-rich like the textbooks you crack open in an MBA course, but with the relative lightness of the blog format. I write these posts because I wish more of them existed!

Barrett S · January 11, 2020 at 8:54 am

Problem with using statistic for analysis is that statistics can be found to prove anything AND can be spun for any purpose. Additionally, even with them, people don’t trust the numbers.

    Brandon Rollins · January 17, 2020 at 9:39 am

    I think a certain skepticism of statistics is a good thing. When cherry-picked and popped into a nice infographic, statistics can be, as you stated, spun to prove anything.

Lily Kwan · January 12, 2020 at 9:30 pm

Very interesting article, thanks for sharing!

    Brandon Rollins · January 17, 2020 at 9:38 am

    Thank you, Lily!

Dustin Rathke · January 13, 2020 at 9:28 am

Knowledge is power

    Brandon Rollins · January 17, 2020 at 9:34 am

    Right on, Dustin!

Maria Teresa Fernandez Ferreira · January 13, 2020 at 10:48 am

Very interesting and very explanatory, I will keep in mind, thanks

    Nancy Femmer · January 13, 2020 at 9:03 pm

    Be honest, be kind and be helpful. Remember you may have the knowledge, so think outside the box. Plan ahead.

    Brandon Rollins · January 15, 2020 at 8:44 pm

    Hey, Maria, thanks for the kind comment! Hope to see you around in the future on here!

Vadim Lingo · January 13, 2020 at 12:49 pm

I’d love to read more about the latest tools to do market research with.

    Brandon Rollins · January 15, 2020 at 8:45 pm

    Hi, Vadim – if you’re a big fan of the latest and greatest in market research, check out the field of data science! Those folks are experts at taking massive, absurdly large datasets and making head or tails of them. Basically modern-day shamans, those folks.

Margaret Gallagher · January 13, 2020 at 6:27 pm

Clear concise – invaluable resource – CERTAINLY will help us reach our target audience and further

    Brandon Rollins · January 15, 2020 at 8:45 pm

    Thank you and I hope this helps you in your business, Margaret! What kind of business do you run?

Calvin · January 14, 2020 at 12:33 am

Good to know about these, definitely must do some elaborate research before you launch anything of the sort.

    Brandon Rollins · January 15, 2020 at 8:46 pm

    Hi Calvin, I wouldn’t go so far as to say it has to be *elaborate*, but there are definitely some questions you have to ask before you spend a lot of money. Namely “will this meet someone’s need?”

Jessica Staley · January 14, 2020 at 1:45 am

I didn’t realize how many market research tools out there that are free for us to access. Thank you for reviewing this with us. It is very helpful.

    Brandon Rollins · January 15, 2020 at 8:47 pm

    You’d be shocked how much information we have at our fingertips these days. I know it seems like a cliche to sit here typing this in the 20s when the internet has been out for like 30 years, but we really take for granted the fact that will have the sum total of human knowledge in our pocket.

NICOLE ROETTINGER · January 14, 2020 at 10:08 pm

Great crash course

    Brandon Rollins · January 15, 2020 at 8:47 pm

    Hi, Nicole, glad you liked it – hope you’ll stick around for future posts!

Billiejo Wagner · January 15, 2020 at 12:46 am

I agree with your statement about thinking of people as individuals and not groups. social media can also be a key driver of new leads to your business. And as these prospects become customer’s, social media allows you to nurture those new relationships, leading to greater connection

    Brandon Rollins · January 15, 2020 at 8:48 pm

    I’m glad you agree, Billiejo. Seeing people as people sounds so incredibly simple, but it’s the kind of hard, untidy, necessary work that serious business leaders and serious marketers have to master to really succeed. Everybody posts talks on social media. Few listen.

Darlene · January 16, 2020 at 4:48 pm

Great article! Was very informative and actually answered my question that I had submitted! Thanks so much!

    Brandon Rollins · January 17, 2020 at 9:30 am

    Hi, Darlene – I’m very glad to hear that!

Nancy · January 16, 2020 at 5:34 pm

I think closing a sale is probably the hardest part for most people.

    Brandon Rollins · January 17, 2020 at 9:32 am

    I can definitely see that, Nancy. The two places I see people run into trouble are either generating leads, or, as you pointed out, closing on them.

Robyer1 · January 18, 2020 at 10:18 am

Some points on target audience that I definitely have missed before! Good read

Joe Metzler · January 18, 2020 at 2:04 pm

I’ve never been able to define my target audience even when gathering information from my previous clients. I would love suggestions on getting over this hurdle.

Shellie Clark · January 21, 2020 at 4:20 pm

Good info

Devon Pickford · January 21, 2020 at 4:43 pm

This is a very helpful article. I will pass on to my Mom – the small business owner of the family!

Sandy Klocinski · January 22, 2020 at 5:19 am

Getting your name out there is intimidating. It seems like much of the effort is wasted. It’s amazing how much time it can take

DBM · January 23, 2020 at 3:38 am

Thanks for this!

Maria Teresa Fernandez Ferreira · January 23, 2020 at 1:38 pm

Very interesting article, thanks

Gun Coaty · January 24, 2020 at 1:17 pm

does kickstarter end up functioning as product fit research?

jason jennings · January 24, 2020 at 6:29 pm

its all good to knon

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