Market research is a critical piece to a company’s success. Yet many companies struggle with it, or skip it all together. But, if you don’t start with the market, you’ll be out of alignment right off the bat. And this will result in a lot of work with minimal gain.
So, what is the proper definition of market research? And how can you conduct it correctly within your organization?
Market research provides a deep understanding of your markets, accounts, buyers and users. It helps differentiate your strategy from the competition, and prioritize your accounts. It helps you align your strategy with buyer needs and address user problems with your products. As a result, you can bring your strategy into alignment with the external market.
There are four phases to market research.
- Market segmentation – dividing the broad target market into subsets of buyers. These buyers have common needs, priorities and solution options.
- Account segmentation – understanding which accounts will generate the most revenue over the shortest period of time.
- Buyer segmentation – understanding how buyers in your accounts make purchase decisions.
- User segmentation – understanding the market problems that exist for users in your accounts.
Setting Objectives
You must start with the objectives. This means defining the questions that you need answered in your market research. What inputs do you need to develop your corporate, product, marketing, sales and talent strategy?
Some key questions to ask here include:
- How big is our market?
- What is the growth rate of our market?
- What industry trends are unfolding in our market?
- What are the needs of the market, and how are they changing?
- How do your competitors go to market?
- What is the life cycle stage of adoption for your buyers?
Be sure to determine your objectives at each level – market, account, buyer and user.
Conducting Market Research
You can’t rely solely on secondary research from research firms. They are fantastic sources of data, but your market research needs more than just these single data points.
You also need to conduct primary research. This includes customer, prospect, employee and competitive research.
Let’s start with customer research. What activities should take place here? Some to consider include:
- Customer interviews with the buyers and users inside your accounts.
- Customer advisory boards.
- Executive mapping to your key accounts.
- Spending time in the field riding along with sales reps.
The next type of research to consider is prospect research. One great source of information here is win/loss interviews. It’s a great opportunity to determine if you’re actually solving the prospects’ problem. And determining whether your selling process aligns well with their buying process. Also consider social listening as another source of information. Where do your prospects and customers live digitally? What problems are they discussing on these platforms?
The third type of research to use is employee feedback. Why the employees? Technically they are internal resources but often you will find many have been in your industry for a number of years. You can obtain market insights and competitive intelligence by tapping into your employees’ knowledge. Also, don’t discount employees that have worked in other industries. Are there any emerging best practices that they’ve used previously that could be implemented?
Last but not least, is competitive intelligence. What are their strategies? How do they win? Do they win on product? Customer? Experience? Or price? One great way to uncover this information is through mystery shops. Pose as a prospect to one of your competitors. This will give insights into your competitors on how they market and sell.
Why It Matters
Alignment to the market starts with the market research phase. It produces actionable insights gathered from the external marketplace. It allows you to make smarter decisions on how to allocate your resources – people, money and time. Ultimately it gives you a better chance to succeed because you’ll be aligned with the external marketplace. Don’t skip this vital step to revenue growth.
