Market Research for Your Business Plan
Successful businesses use research to create effective marketing plans. It’s how large brands reach their target market and have such high ROI campaigns. However, it doesn’t end there. Brands will then use that same data to improve everything about their products, starting with development and design while ending once the product becomes outdated.
Overall, creating an effective marketing plan requires brands to improve customer experience. That’s where market research comes into play.
Market research is the overall strategy that a company uses to better understand its customers. Top brands use research to discover what drives customers. In short, it identifies their fears, pain points, needs, and frustrations with other brands. This information can be used to develop more focused marketing campaigns. It is also used to develop better products as demand changes.
Data is the single most valuable tool that businesses have today. What makes this even more amazing is that everyone has access to it, even small businesses. Therefore, it’s essential that all businesses develop better data-centric processes. The brand that gets closer to its target market is always going to win!
Here are some reasons why market research is essential.
- Brands that show they care about their customers are going to win. This means becoming obsessed with their well-being.
- Research provides you with information that details why your target market feels or acts a certain way. This is different from analytics, which shows you what they are doing.
- The days of executives following their gut instincts are dead. Instead, brands are expected to make decisions based on real data. I cannot tell you how many times I’ve seen businesses rally behind terrible ideas.
- Brands have no way of knowing how their products or services will be received by customers unless they do the proper research.
The Core Components of a Market Research Plan
So now let’s look at some of the key factors that comprise a winning market research plan. Let’s break this down in the order of importance so that you have an idea of how to start.
Describe Your Industry
No matter what type of research you are planning to do, it’s important that you always start by analysing the overall industry. Write everything down because you’ll be adding it to your business plan later. Research the growth of the industry. Look at how others are taking advantage of this growth to generate profits.
Now you will be able to discuss the business characteristics within your industry and perhaps find areas where you can fill in the gaps.
Locate Your Target Market
Once you have described the industry, you might have already noticed a few pain points. So now you will need to target out a specific segment. A big mistake that is made quite often is that small business will not segment their target market, so they have this huge demographic they are trying to cater to. So now is the perfect time to narrow it down.
For example, if your brand specialises in homeowners insurance, then you should only target homeowners in your specific geographic location. You will be able to create a detailed customer profile.
Include Additional Details
Since you have narrowed down the field considerably, go ahead and include several additional details about this segment. Here are some considerations but feel free to add more if needed:
- What is the estimated size of your target audience?
- How much do they spend per month and year?
- What percentage of these customers do you think you can sell to?
- How long do you estimate it will take to generate those sales?
- How much are your products or services worth?
The goal here is to estimate your profit margins. This should all be a part of your business plan.
Analyse Your Competitors
Finally, you need to do some research as to your competition. Include any other businesses that are impacting the same target market as you.
- What are the most common complaints from their customers, and how can you improve on that?
- How much are they charging for similar products or services?
- What makes your brand different?
Combine Your Market Analysis with Your Business Plan
By this point, you have done enough research to get started but remember that you need to stay on top of your new segmented market. It will change, so you need to stay up-to-date. With that said, it’s time to combine this new information with your marketing plan.
We’re focusing on the internal use of your market research, just so that’s clear. If you’re going to a lender, then you’ll need to provide details as to how you came to these conclusions.
Let’s start with your internal processes. Did your research find any areas where you might be able to improve internally? In most cases, businesses find ways to make their internal processes more efficient for customers. One example is lowering the customer wait time.
Next, organise your information in a way that makes it match the business analytics aspect of your plan. We’re creating a market analysis here that will include:
- A summary of your company’s industry. Growth and size are two important factors.
- Projected profits and pricing of your products or services.
- Competitive analysis including but not limited to the strengths and weaknesses of your competitors.
- Traits of your segmented target market, including their needs, buying trends, and forecast growth.
Putting it All Together
Market research is the key to unlocking your brand and taking it to a whole new level. It provides you with the insight needed to ensure that your decisions benefit your target market. So study your new marketing plan and create processes that ensure that you have a steady flow of information coming in. Consider letting experts like the Research Optimus Professionals help you get the ball rolling. It might require an investment, but a well-designed research plan is worth the cost.
As your business grows, you’ll need to expand your plan to include more advanced research methods like statistical analysis and focus groups.