Market research for small business: 5 steps to success

This post is all about how to conduct market research for small business to clarify your industry positioning and to help direct your marketing efforts…

When it comes to running your business, do you understand exactly where you sit within your industry? 

Do you feel stuck in your business? Like you might never be able to price what you deserve or find the clients that energise you?

Then you might be missing an important element of your marketing plan - research on your target market.

Why market research for small business is so important

Market research helps you understand how you can best serve your clients so that you can provide services that people actually want and need. 

If you don't understand the market you're servicing, you’ll never be able to stay on top of trends, price yourself accordingly or articulate the solutions you're providing. 

And, without having an understanding of your market, it’s more difficult to track if your marketing efforts are working as planned.

The market research mistakes you’ve been making

Researching your target market can seem like one of those marketing “checkbox” exercises.

Let me guess...

You're thinking you don't need to do too much research - after all, you work with your clients every day, surely that’s ‘enough’?

You're afraid that all the research is going to be worthless - you’ll waste a ton of time on an exercise that will end up gathering dust on your laptop?

You’ve tried conducting market research for your small business before - but it felt like you weren’t looking in the right place or finding the right information. 

You’ve been hanging around in Facebook Groups, asking questions - that counts, right? Well, unless the ONLY people responding are your target market, then no, that isn’t market research. 

Listen, I get it.

The problem with how many of us approach market research is that we view it as a ‘theoretical’ task to tick off the list - not as a living, breathing workflow that helps you grow your business with more ease.

So, I’m here to show you how to carry out a market analysis for your small business in 5 straightforward steps:

How to do market research for a business: 5 crucial steps

Firstly, let’s get clear - what exactly does market research for a small business entail?

According to the Business Queensland site, 

“Market research involves gathering information about your:

  • industry and market environment – to understand factors external to your business
  • customers – to develop a customer profile
  • competitors – to develop a competitor profile.”

My research process comprises these 3 main points - but I like to break it down into 5 manageable steps that you can complete one by one to limit the overwhelm…

Your industry

☑ STEP 1: Know the industry you’re operating in

Even if you’ve been working in your market for years, it’s always worth ensuring that you’re on top of industry trends and developments.

The Queensland Business site has a great resource page to kickstart your research. 

It’s also good to write down the most common questions you’re asked about your industry and check that your current marketing and communication plan addresses those queries. 

Your clients

☑ STEP 2: Understand your ideal client persona

If you haven’t got a clear idea of WHO your ideal client is - now is the time to do this. Knowing who you’re serving is fundamental to accurate market research, so don’t skip this step. Luckily, you can follow my 4 step guide to defining your ideal client!

☑ STEP 3: How do your clients view your services?

This is a crucial point to consider. Do you truly understand how your clients view your services? Ask yourself these questions:

  • How do you describe your services? Is that the same way your clients describe them? 

 For example, if you describe yourself as a ‘copywriter’, is this a word that your target market uses? Or, are they looking for a ‘website writer’ or ‘blog post writer’? If you’re not describing yourself the way your ideal clients would then your marketing won’t be hitting the mark.

  • Have you brainstormed what words your target market would type into Google to find the services you’re offering? 

 Take this exercise one step further and use Google to brainstorm the words clients are searching to find your services. Do those Google search results contain matches for your kind of business? Do the search results match the intent of your services (i.e. are people Googling your term in order to find someone to hire, or are they simply seeking information?)

The alternatives

It’s not enough to research your industry and clients. In order for your marketing to be truly effective, you need to understand what alternatives your clients have. What else have they tried? Who are your competitors that they may also be considering?

☑ STEP 4: What alternatives do your clients have?

It’s time to list all the places your target market might look to find a solution

Let’s take the copywriter example a step further here… what are their target market alternatives? Some examples might be:

  • Direct copywriter competitors
  • Copywriting AI software
  • Learning how to write copy themselves with books or courses

It’s a great exercise to think through each of these alternatives and list the pros and cons of each, that way you can directly address these in your marketing and sales calls. 

☑ STEP 5: Consider your positioning in the market

Now it’s time to consider how you can position yourself against your direct competitors in your industry. 

Think about the following...

  • List your top 5 competitors and make a note of how their clients and services compare to yours

What do they do differently to you? What gaps could you fill that are not currently being covered?

  • When choosing a provider, what influences your client to choose you or your competitors?

Understanding how your service offering differs from your competitors is only part of the story. It’s just as important to understand what your CLIENT values most when they’re looking for your services. 

The best way to find out this information is to directly ask your prospects and clients, with surveys or interviews. 

  • If your ideal client has previously tried an alternative solution in your industry before, what did and didn’t work for them?

This is a key question to include in any surveys you run - understanding what has and hasn’t worked for your clients when seeking solutions to their problems within your industry is a great way of identifying your USP and creating compelling marketing messages. 

  • With the answers to this research in hand, you can assess your offering  against your competitors and adjust if necessary

Now that you understand what your clients are seeking, what they’ve tried before and how your competitor’s offerings look, it gives you the opportunity to use your marketing plan to identify areas where you can differentiate your offer, or adjust to bring it more in line with industry standards. 

There you have it, 5 steps to make market research for small business more manageable.

Need some help with market research for your business? Get in touch today and let’s see how I can make the process easier for you. Book a discovery call now!

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