A company that doesn’t understand its customers’ wants and needs is doomed to fail. That’s why it’s important for sales professionals to conduct market research, preemptively assessing who its customers are, how they think and act, and how they might respond to a new product or service.
Carefully researching its target audience gives a company insight into how to adapt and improve a product before launch, optimizing it for maximum sales appeal and boosting the company’s chances of success. It’s no wonder, then, that the US market research industry was valued at over $30 billion in 2022.
If you’re a sales professional at a B2C company unsure about how to conduct market research, this helpful guide will outline the five steps and four best practices to uncover customers’ thoughts and find actionable insights that will improve your product’s launch and success.
Five Steps to Market Research
Though you may be eager to start designing surveys and experiments, being too hasty may lead you to wasting your time and energy. Instead, it would be wise to follow these five conclusive steps to complete the market research process.
Determine Your Goal
The first step of any research process is to outline your goals. Market research is usually conducted to assess the viability of a company’s up-and-coming product or service, backed by a concrete hypothesis or research question.
Some example questions could be:
- Would the product be more appealing in red or blue?
- What emotions does this product evoke in the customer?
- What sales enablement or support does the customer need to use the product?
- What price should we sell this product for?
For each insight you hope to derive, ensure that your company has the resources necessary to implement the changes recommended by your research. This will help you limit the scope of your research to factors your company can change, preventing you from wasting time and resources.
Study the Macro Environment
Next, examine the external factors that affect your market. Consumers don’t operate in a vacuum and are affected by external factors such as the economy when considering whether to buy your product. For example, they might be weary of inflation or prefer a specific product design due to a recent fad.
More so than the client’s personal wants, knowing these factors will help you cater your product to the client’s capabilities on a broader scale.
A common tool to analyze macro dimensions is the PESTEL framework, which stands for:
- Political: Government policies, business support programs, taxes, political stability, labor laws
- Economic: Inflation, market saturation, loan rates, consumer spending trends
- Sociological: Birth rates, demographic patterns, consumer lifestyle attitudes, cultural barriers
- Technological: Technological infrastructure, automation, communication channels, upcoming technology research, and development
- Environmental: Environmental restrictions and regulations, climate change, renewable energy, consumer attitudes toward the environment
- Legal: Consumer protection laws, copyright, and patent laws, product regulation laws, labor laws, health and safety laws, data laws, required permits
Any one of these factors could affect how you go about your market research and the courses of action you can take when developing your product. For instance, if you attempt to conduct market research in a European country, Europe’s General Data Protection Regulation (GDPR) would be a legal factor that prevents you from collecting a consumer’s information without consent and would require you to delete the consumer’s information upon request.
Then, the PESTEL framework could give you additional insight into the future success of your product – if your analysis of economic factors tells you that there will be a recession soon, you may decide to delay your product’s development and launch entirely until consumer spending picks back up.
Check Your Secondary Research
Depending on your research hypothesis, another company —maybe even your own company!— may have already researched and published a similar study. Even if it’s not an exact match for your own topic, finding and reviewing these sources can save you valuable time and money.
Of course, you won’t be able to derive all your insights and specific needs from secondary research. But it’s a good starting point for more basic concepts such as the overall demographics and traits of your target audience or industry analysis.
Determine Your Primary Research Methods
For the topics you couldn’t find secondary research on, you’ll have to conduct primary research to answer the question yourself. There are four main types of primary research: surveys, interviews, observations, and experiments.
As a company, you should mix and match these methods and collect both qualitative and quantitative data to get a holistic, comprehensive picture of your target customers.
Surveys
The most familiar research method, survey questionnaires, ask hundreds of consumers by phone, email, or social media for their opinion on the company’s product. By analyzing the results, a company can gain insight into customers’ thoughts and feelings on a product and its elements.
When designing your survey, minimize survey fatigue by only asking the bare minimum of questions you need. Ask all of your most important questions first, and leave simple demographic questions for the end.
Interviews
For a deeper understanding of what an individual customer thinks, you can conduct one-on-one interviews or arrange focus groups of under ten people. As compared to surveys, interview participants will give you longer and more detailed insights – however, it’s likely you’ll only be able to interview a fraction of respondents as compared to surveys.
While you should, of course, prepare questions ahead of the interview, it’s also helpful to use laddering techniques during the interview, asking follow-up questions to seemingly-simple responses to discover the subconscious motives behind a customer’s response.
Observations
Sometimes, a customer either can’t explain why they make a choice or don’t want to admit it. For these cases, companies can create a customer journey map to observe customers in their natural environment.
If you’re not sure what your company’s customer journey is like, MakingThatSale has guides on how to structure your business functions and processes to make a wonderful customer experience and journey.
By making a note of what the customer thinks, feels, does, and senses at every step of their interaction with a product or the company, a company can enhance each of these aspects and improve the customer experience.
Experiments
Finally, for the most complex questions, a company can design experiments to test if changing an independent variable will change a dependent variable. Experiments can be conducted formally in a controlled environment, or implemented naturally, such as by showing different customers different versions of a company’s landing page.
You can observe a single variable through A/B testing or two variables with two-factor experiments. Whatever variables you choose, ensure that you’re testing the causation between them, meaning that they’re correlated, temporally sequential, and not both driven by a third variable.
Though experiments will provide the most concrete data, they can be quite expensive. Plus, a flaw in the experiment’s design may greatly skew the results, making the data unusable.
Analyze Your Results
Now that you’re done, collect all of the data you’ve gathered from your secondary and primary research, and analyze it to discover trends and derive insights into your customers. With these insights, your company can confidently make data-driven decisions and implement the actions you outlined in the first step.
Four Best Practices for Market Research
The four best practices when conducting B2C market research are to manage your focus group, offer incentives, highlight endorsements, and specify recommendations.
1. Manage Your Focus Group
When collecting primary research, prevent sampling bias by collecting a large number of responses from a diverse group of people in your target audience. For example, if your target market is athletic women in their thirties, you would look for respondents from different cultural and ethnic backgrounds, socioeconomic statuses, and even different cities. For best results, collect responses from different mediums: some from phone interviews, some from online surveys, and some from in-person observations, just to name a few examples.
Though it might be convenient to source all of your respondents from the same location at the same time, this will skew your results and prevent you from gaining a complete view of your audience.
2. Offer Incentives
Machiavellian though it may sound, it’s true that consumers are busy people and likely won’t participate in a research study without proper incentivization. If you’re struggling to get a proper sample size of responses, consider offering a participation reward such as a discount to your store or a cash prize.
3. Highlight Endorsements
Beyond strategic decisions, the marketing data you collected can also be used as social proof to boost your sales enablement and marketing materials.
Social proof is the concept that when in doubt, consumers look to other consumers to guide their opinion and decision. In other words, if you received positive comments or saw a great percentage of supportive customers, displaying those endorsements encourages potential customers to buy your product.
4. Specify Recommendations
Finally, once you’ve completed your research, detail specific actions each business department should take to make full use of the insights derived. For example, you may have to align the actions of the marketing, sales, support, and finance departments to make a suggested price decrease viable and ensure a comprehensive message about the price during the customer journey.
Conclusion
Market research may sound arduous, especially for B2C companies with large customer bases. But it’s exactly because of those large target audiences that B2C companies should follow these steps and tips to conduct the most comprehensive and accurate research, ensuring that their products and business decisions are effective from the beginning: any mistakes will have a resounding impact on the company’s reputation and bottom line.
With proper market research, a B2C company can leverage consumer insights to optimize its product before launch, setting it up for striking market success.
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