One of the most important factors to consider when operating a successful business is understanding your market. Understanding your market can help you clearly define your business, prepare your business for changes in the market, as well as prevent your business from falling behind your competitors. Outlined below are several helpful tips and strategies to keep your business current, along with maintaining continuous growth in relation to your market competition.
Do Market Research
Market research consist of data collecting and analyzing your market, customers and competitors. Conducting a market research helps your business save time and money from attempting projects that have been proven to be useless or flat out just don’t work.
The 3 main ways to conduct a market research:
- Desk Research- This involves gathering information from the Internet and industry associations.
- Field Research- This is when you yourself gather information by conducting surveys, questionnaires and other available research tools.
- Commercial Agencies- This is done by recruiting or hiring outside organizations that can do the proper research work for your business.
Conduct A Self Assessment Of Your Business
A self-assessment includes having an honest and critical assessment of your business. This is done by asking yourself key questions about your business such as:
Who are your customers exactly? To be more specific, who are the customers that best fit the products or services that your business offer?
What type of people are your customers? This entails gathering the demographic information (age, gender, race/ethnicity, average income, education, occupation, geographic location, marital and family status) of your customer base. Also, what is the lifestyle (interests, hobbies, recreational/entertainment activities, political/cultural/social beliefs and practices), of your customer base?
Having the answers to these questions will help your business grow tremendously. This is because it forces you to make the necessary changes to improve your products and/or services, and when privy to this vital information, it can guide you on how to effectively market to your customers.
Understanding What Your Competitors Offer
Understanding your market competitors might seem like an arduous task, but actually it’s a simple process. In most cases, it entails just collecting flyers, pamphlets, brochures; or even going to your competitors’ websites and purchasing their goods or services.
Part of understanding your market competition is asking the right questions. Analyze what your competitors do better than you, then ask yourself these questions:
Do they have lower prices than your business?
Are their products or services better than yours?
Are your competitors’ customer services held in high regard?
Are their marketing strategies more engaging than yours?
Being able to critically assess the strengths and weaknesses of your business in comparison to your competition, will not only help you improve upon what your business already does well, but also allow you to learn from your competition and become inspired to apply their success to your business.
Find Comparable Businesses When Assessing Your Competitors
It wouldn’t mean much to your business of you compared it to every competitor in your respective industry. To have a firmer understanding of your true competitors, you must look at comparable businesses and their data. Here are few ways to find your comparative competition:
Make sure that your competitors are of relative size to your business.
Companies that offer products or services in the same region or geographic location that your business operates in.
Any business or company that operates under the same business model or ownership structure as your business, such as single ownership, a partnership or an advisory board of more than 2 people.
The status of a business in terms of being relatively new to the market or an established company that’s been conducting business for 10 years or more.
Figuring out which businesses are comparable to yours will help narrow down what’s important to your business, as well as allow you to assess where you fit in the market and what you must do to adapt and thrive through the upcoming changes.
Manage Your Market Research Money Wisely
Keep in mind that researching the market can become time consuming and quite costly. To make sure that your market research money is spent wisely, be sure to:
Know exactly what information you’re going to need for a correct market assessment. If you focus on the right information, it will save time and prove to be valuable when you apply it to your solutions.
You can get lost or frustrated trying to research everything, so don’t. The information that provides you with the best or quickest return should be your primary focus.
Get creative. Not every research tool is expensive. Search for alternative research tools and resources such as the Small Business Development Centers and the Small Business Administration that create customer surveys for small businesses.
Get an estimate of what it would cost to do the market research yourself. As with anything involving research, the internet is your best friend. If used correctly, using the internet as your main research tool will help to keep research costs down. Only consider hiring outside sources if you can’t do it yourself.
Another proven strategy for market research is conducting a S.W.O.T analysis. This assesses where your business ranks in comparison to your market competitors. Commonly used to construct business plans and other marketing strategies, a S.W.O.T analysis breaks down into four parts:
(S) Stands for your strengths. Continue to build upon your strengths.
(W) Stands for weaknesses. Minimize your weaknesses as much as possible.
(O) Stands for opportunities. Whenever an opportunity presents itself be sure to seize it.
(T) Stands for threats. Try to counteract or defend your business against any potential threats.
The sole purpose of conducting a market research is to gain greater insight as to what your business does well and what it needs to improve upon in relation to your competitors. Although there are plenty of factors to consider when researching your market, remembering its main objective, along with the stressors mentioned above, will not only help to reveal the strengths and weaknesses of your business, but also grant you the most relevant information that your business will need to grow, compete and succeed for the future.