Speak to any business owner, and they’re likely to tell you that the one thing they’re aiming for is certainty and stability, especially in the current economic climate.
Those at the top want to make strategic decisions based on fact, confident of the results they will achieve.
Despite this, many SMEs are still apprehensive when it comes to engaging in any form of research into their market, often passing it off as an exercise reserved for much bigger businesses. The fact is, whatever industry you are in, it’s likely you operate in a highly competitive market and companies need to do all they can to harness the loyalty of current customers, attract new audiences and explore potential areas of growth.
This is why market insights are invaluable for gaining a real understanding into any sector, and can provide a solid foundation for a business’ overall sales and marketing strategy.
Unfortunately, I regularly see three common mistakes in the way smaller companies view and engage with market insights.
Not knowing when to use it
Most business owners realise that some form of research into their market would be useful when it comes to launching a new product or service. Thorough research will replace assumption with fact, helping you to identify the high value customers in your market, understand their behaviour and find out what motivates their choices so you can decide how best to position your services or products.
However, sourcing insights into your market should not just be reserved for new launches. Even if your product or service offering remains the same, it’s useful to carry out some form of continuous market assessment to gauge trends, attitudes and compare performance against key competitors.
There is no getting away from the fact that conducting market insights will require an initial outlay, but it needs to be remembered that the whole process is designed to make the business in question more cost-effective in the long run, by ensuring money is spent in the right areas and on the right people.
There has been a growing trend of firms trying to avoid such costs by using DIY online surveys to conduct ‘market research’. This can prove problematic as, more often than not, these result in talking solely to your existing customer base or your own contacts on social media. By only talking to existing contacts, you will never achieve the unbiased and broad market response that is needed to create genuine insights and analytics that pack a punch.
In fact, in many respects, inaccurate and skewed data can be just as bad as doing nothing at all.
A reliance on demographics
A reliance on demographics i.e. grouping people by factors such as age, gender and location, will only get you so far. Real impact will be achieved via segmentation, splitting people into groups based on attitudes, behaviours, barriers and motivations. This way of working relies more heavily on evidence than the assumptions that tend to go hand-in-hand with demographic data.
Using this method to segment your customer base will ultimately help you create much more targeted sales and marketing campaigns. It will allow you to simply answer questions such as ‘which customers will deliver the most profit and growth?’ and ‘which customers are more likely to respond better to offers and incentives?’.
When done well, market insights are an important vehicle for business growth. By understanding who to target and how to reach them, you can focus your resources in the right places. By ascertaining which customer needs are not currently being met, you can decide how to adapt your products and services to meet them. Regardless of whether you are a SME or multi-million pound blue-chip, surely that is something we all want to achieve?