Why is market research so important
When you are in the early stages of a new business venture, you need to complete market research. It is one of the most important tasks because it tells you everything about your own idea, your potential customers, your future competition – essentially whether your business is viable and where to spend your money. Here’ is why market research is so important.
More than ever, it is important for businesses to communicate with their customers. With social media, email marketing and other forms of instant communication, consumers expect a dialogue with any business they have bought from. However, communicating with customers is not as simple as you might think. The businesses that do it best have spent a huge amount of money conducting in-depth market research to find out exactly how to speak to their customers. This is one of the main reasons that market research is so important. It shows you exactly where your customers can be reached and exactly what language they use.
Understand your customers
Market research also helps your business go a step further in understanding your customers. If done right, it can help you understand consumer behavior. For example, if you are planning to start a new online gambling business, your market research might tell you that new customers come in around big sporting events and look for large introductory bonus. That tells you that you need to offer a competitive bonus to stand out amongst the other businesses and to increase marketing around sporting events.
Develop new product ideas
Most businesses that are in the market-research phase already have a pretty solid product in development. However, that does not mean there is no room to develop new product ideas or improve on existing ideas. Market research and product development go hand-in-hand. As you analyze your competitor’s products, you will see the advantages and disadvantages of each. This information can be then incorporated into your own product idea.
Market research will help you identify new opportunities for your business. For example, you might find an opportunity for reaching and converting customers or you might find a gap in the market that your business can fill. Market research is all about learning about your customers and your competitors, and how your business will fit in. Are you planning to be disruptive and change consumer behaviors? Or are you planning to provide a premium service that is not currently being offered? Market research will help you answer these questions and identify the chances of success.
Lower your risk
Starting a business or launching a new product is all about managing risk. How sure can you be that your idea is going to take off? If you are going off a hunch, you cannot be sure at all. However, if you can back up your hunch with some concrete data, you can dramatically reduce your risk. When you use the right market research tools, you can make some pretty accurate predictions. It also helps you reduce the risk of wasting resources on marketing initiatives that will not work and reaching out to customers that will not convert. In short, market research will let you know (with some degree of accuracy) whether your business is going to be successful or not.