For most successful businesses, market research is a cornerstone of their business strategy. It influences and informs everything from marketing strategy and advertising budgets to sales efforts and service decisions. In a world where too many businesses rely on bureaucratic hierarchy, “gut” feelings, hunches and egos to make critical business decisions, market research stands apart as a data-driven, objective, factual bedrock on which to base your organization’s plan of action.
Put two businesses against each other – one driven by egos and best-guesses, and the other driven by factual market research data – and chances are, the latter will win out in the long run. The former may have some successes, but that’s no way to run a business in the long term, especially in today’s constantly changing market.
“The team at SageAge has witnessed again and again the transformative power that good market research can have on an organization,” says Malissa Illiano, Senior Consultant & Director of Market Research at SageAge Strategies. “It has the power to take a struggling business and inject it with new life, and can take a business that’s doing pretty well and really put them over the top. All it takes is a willingness to put in the time and effort into smart market research strategies.”
If you’ve been musing over the possibility of expanding your business, smart market research is your friend. What exactly are those strategies Malissa is referring to, and how can they be applied specifically to a strategic expansion of your business?
Market Research: The Basics
Market research is a complex, nuanced process that can be as broad or as focused as you want it to be. The options for where you want to focus your research are virtually endless, and can lead to deep insights about specific parts of your market and your business. For the purposes of this post, though, we’ll review some of the big-ticket, top methods for good market research.
Primary Research: This is information that comes directly from your market – aka, your customers. When you want to know how your business is performing, how your customers see your organization, what new services or amenities your residents might enjoy, or something similar, primary research is your best friend. It involves gathering information through the use of things like focus groups, print and online surveys, in-person interviews and questionnaires.
Secondary Research: This is a huge catch-all that applies to all the research that you can’t do by just talking to or surveying your existing customers. It includes, but isn’t limited to:
- Compiling information from the U.S. Census Bureau and other governmental organizations
- Gathering data from local community organizations, such as your local Chamber of Commerce or small business support group
- Creating reports and analytics based on social media insights, as well as any and all online data gathering
- Gathering market statistics from local trade associations
- Talking to local colleges and universities for information on any research they’re doing in your local or greater market
Applying Market Research to Expansion Opportunities
Expanding as a business can mean a lot of things. Big or small, any expansion deserves the due diligence that market research offers.
Expanding sales in your existing market. This is the simplest and most straightforward way to expand. Because you are growing into a market you are already familiar with, the key types of market research that will help influence an expansion of this nature is existing customer research. By getting to know your existing customers better, you can better market to a larger group of the same people.
Introducing a new product or service. This is probably the next least difficult of all expansions, and again, it relies upon your existing market and customer base for success. Market research in the form of customer interviews, surveys and focus groups can go a long way in informing you how to introduce any new product or service to your existing market.
Moving or expanding to a new location. This is quite a bit trickier than the aforementioned expansion strategies, and involves much more market research to ensure success. You must not only understand the nuances of the market you are looking to expand into, but also assess if there is a need for your service there, what your competition looks like and the long-term opportunities for growth there.
Partnering up with another organization. By joining forces with a like-minded organization who shares some of your goals and mutual interests, you can expand in a smart and supported way. This can also be tricky, though. Going into business with another organization opens up a whole slew of potential stumbling blocks. Market research, in this case, involves getting to know your potential partner’s audience, seeing where your audiences overlap and doing your due diligence into the structure, strategy and scope of your partner.
Growth is the natural mode of existence for any successful business. By conducting thoughtful market research, you can minimize the risk of any expansion and set yourself up for future success, whether your plans are big or small.