A few months ago, this column talked about the importance of allowing customer-led design to inform the development of your product. This month’s article is about market research – in many ways a similar discipline, but one that all successful businesses will revisit and re-evaluate regularly. Market research is essential for understanding the marketplace you are competing in, finding out who will buy your product or service and discovering your unique selling point – your ‘USP’.
It’s impossible to overstate the importance of knowing your customer and what makes them tick. It’s not enough to carry out market research just once, before launching your business, and then file it away in a drawer somewhere. Your markets and customer needs are constantly evolving, and in many industries that evolution will keep accelerating. Continuous research helps you to ensure that you are still offering value to your existing customers, as well as helping you attract new customers and keep ahead of the competition.
There are several ways you can look at your market, but they will all tend to give you either quantitative or qualitative data. Quantitative research arms you with the facts and figures – how many people might need your product, or how much your target customers spend on similar offerings. This might be achieved through surveys, market reports or competitor analysis. Alongside this, qualitative research will help you explore your customers’ opinions and feelings on the product, through interviews, focus groups, prototype testing or subconscious measures.
Kelly Roche is a Market Research Advisor at the Sussex Innovation Centre, and helps members to scope research projects that help them to learn from existing customers, as well as investigating the needs of potential new customer segments.
“The most important thing to consider when you plan your research is to give yourself some clear goals, and use those targets to help you decide upon the most effective approach,” she says. “Make sure that you’re asking the right questions that give your customers – or potential customers – the space to tell you what is most important to them. And always try to draw insight from a range of people, not just your friends, family and anyone else who is already close to the product. The trick is to spot new, recurring problems or pains that large groups of customers aren’t able to resolve.”
These kinds of problems can often be uncovered by seeking regular feedback from your current customers. They are a great resource, and will often be happy to answer a few questions if it will help make your product more tailored to their needs. You can also stay abreast of what’s changing in your industry by attending relevant events such as trade fairs and conferences, or subscribing to newsletters and reports.
It is important not just to focus on your market segment and the competing products available, but also be aware of potential ‘disruptors’ coming into the market. These are companies who are taking a different approach to the customer problem and solution, such as AirBnB – a truly ‘disruptive’ service for the hotel and accommodation industry. It is also worth keeping up with wider political, technological, and socio-economic trends that may have a positive or negative impact on your market, your customer and your business.
There have been countless examples in recent years of companies that have suffered because they failed to keep up with trends in technology, and the effect that these trends had on their customers’ expectation of good service. Blockbuster, Borders and Kodak didn’t recognise the emerging digital, user-friendly competition for their market share until it was too late. Blockbuster could perhaps have leveraged their existing brand to occupy the space that Netflix and others have emerged to fill, but the business did not act on the growing trend for downloading or streaming video content. Instead they continued with the same business model as demand for physical video and DVD rentals gradually declined, until the business was no longer sustainable.
Conversely, there are some companies which have grown and thrived, by keeping up with consumer trends and staying ahead of the competition. John Lewis is an example of a traditional retailer transitioning from purely high-street presence to multichannel approach. Unlike Blockbuster, they spotted the steady growth of online retail early on, and decided to focus their strategy on a multichannel approach, investing in digital. This has resulted in them having not just a strong physical presence, with an established brand, quality and expertise, but also a strong web and mobile presence – allowing the customer to engage with them whenever, wherever and however they want. As a result, the company has outperformed most other UK department stores in terms of growth over the past few years.
The lesson for businesses is that they should seek to identify the opportunities in changing customer trends, and adapt to changes, rather than resisting them. Remember the old adage, ‘knowledge is power’. Staying on top of developing trends in your market isn’t just a smart business decision for informing the future direction of your company – it can also help you to position yourself as an authority and a thought-leader within your industry. In our next column, we’ll be looking at how to communicate what you offer to the outside world, and that becomes a far easier job when people know that they can trust what you have to say.
Joseph Bradfield is a communications specialist at the Sussex Innovation Centre, an incubator for high-growth businesses based at the University of Sussex, where he works with growing businesses to help share their innovative ideas with the world. He writes a monthly column for entrepreneurs and start-up companies, drawing on the experience of the Centre’s dedicated business support team to provide step-by-step advice and insight, helping readers to navigate some of the challenges involved in launching a new enterprise.
