What are the benefits of market research? There are plenty.
Put simply, the advantages of conducting marketing research center around 3 key areas:
- Strategic benefits
- Marketing benefits
- Operational benefits
Market research is typically used to address at least one of and sometimes all three of these outcomes.
Choose to complete market research and you should expect a standing ovation from all of your colleagues.
It's that good of a decision.
What Types of Businesses Use Market Research?
Our market research company partners with organizations from varying sectors and industries.
There are no bounds as to what type of business should and should not different types of market research methodologies.
Here are some common profiles of users of market research:
- Start-ups or companies looking to launch a new product or service
- Organizations looking to expand into a new or unknown market
- Businesses who don't understand their customer and non-customer profiles
- Companies who want to learn more about why their customers buy or don't buy
- Firms that want to learn more about how they compare to the competition
- Organizations who want to understand more about employee morale and engagement
Although this is only 6 profiles of common users there are many, many more.
Usage of data and insight circles back to the three core benefits of market research. Let's take a closer look at what those are.
💡 The Key Takeaway: When reviewing the benefits of conducting market research, consider how versatile it is, and how the feedback gained can benefit your company.
Benefit #1 of Market Research: Strategic
The first benefit of using market research is the strategic benefits. Market research is the foundation of sound strategy.
Why base major decisions like the direction of a company on gut feelings when you can base them on facts and evidence?
This is all part of the growing data-driven regimes in organizations.
Market research can tell an organization...
- Which strategy will perform best in the market.
- Which market offers the greatest chance of success.
- Which product to move forward with.
The strategic benefits focus on recommendations and action items at the 30,000-foot level whereas the next 2 benefits are far more tactical.
Learn more about data-driven decision-making and why it's so important.
💡 The Key Takeaway: Market research provides necessary data, thus helping companies with their business strategies. Basing strategies off of tangible results offers a reliable solution to issues within an organization.
Benefit #2 of Market Research: Marketing
This is one of the most common and widely used benefits of conducting market research.
Market research can fuel your marketing approach by:
- Honing in on messaging and design.
- Telling you what audiences to market to through segmentation.
- Teach you about where customers and non-customers spend their time on media to help guide budgeting.
As a market research company, we spend the majority of our time working with marketing personnel.
Furthermore, market research (like ad concept testing surveys) can test messaging and ad creative.
User experience (UX) research can improve websites to promote more conversions. This is an essential part of any business–so much so that 55% of businesses utilize some kind of UX testing. If a website’s not user-friendly, you won’t see those conversions.
Voice of Customer (VoC) can tell an organization about what customers love and hate about your brand and help define competitive differentiators.
Market research can be a goldmine for a marketing team.
💡 The Key Takeaway: Thankfully, there are multiple market research tools a team can use to boost their reach. For instance, UX and VoC both lend themselves to marketing efforts.
Benefit #3 of Market Research: Operational
Lastly, another one of the many benefits of market research is operational improvements. This may include tactical changes to an organizational structure.
It may also include reworking or retraining departments to focus on different approaches with customers.
For example, say you learn from market research that shipping time and customer support is the most important part of the customer experience.
Your organization may then choose to train sales teams to highlight these 2 factors as part of its sales pitches to future prospects.
Market research may also change your process.
If you learn customers felt left out after they placed a customer service call, you may use the data for the market research to institute a follow-up text or email post-contact.
These are types of operational improvements that can be driven through data and customer feedback.
💡 The Key Takeaway: Benefits of conducting market research include changing operational structure. It can uncover fresh insights within a company, allowing for changes to be made.
Additional Benefits of Market Research
We couldn't stop at just three. Here are a few more reasons your organization can benefit from market research.
Defines Your Target Audience
Before bringing a product to market, it's important to understand who your customers are (or who they will be).
Up to 89% of customers will buy from the same company again if they have a good service experience. When you gain insight into your customer base via market research, you can discover how to perfect the customer service to attract (and keep) the maximum number of customers.
Not only does it help define your target audience, but it also helps you actively listen to your customers on a personal level.
This gives the opportunity to also solve potential problems in customer satisfaction.
Once you understand your target audience, marketing becomes more effective.
Therefore, with a clear understanding of the demographics of your audience, you are able to be strategic to a specific group of people.
This saves a ton of money and resources in the long run.
Learn more in our blog post: What is a Market and Customer Profiling Survey?
Assess the Competition
Market research can also help you understand where your brand stands against competitors.
Through conducting what is called a competitive assessment, profiles all of your competitors and gives a full analysis of what customers think about them.
This way, you can take advantage of understanding their weaknesses and how you can utilize your strengths.
Interested in reading more about competitive assessments? We've got you covered. Read our Ultimate Guide to Conducting a Competitor Analysis.
It's important to stay innovative and always stay one step ahead of your competitors.
However, all this innovation comes with a lot of risks and uncertainties.
One way to fight that is through market research!
For example, using package label testing surveys can help companies understand if a new product’s packaging will stand out on the shelf against the competition.
Another example is a pricing sensitivity survey. This type of market research benefits companies by measuring which price point works best for their target audience.
Another great tool to consider is sensory research, which is commonly used in the food and beverage industry.
The goal of this research is to determine the customer’s overall experience with the product.
Respondents answer questions like:
- Do you enjoy the flavor of this product?
- How would you describe the texture?
- Would you recommend this product to a friend?
By using market research, companies can minimize risks and product failure associated with releasing a new product/service. In turn, this helps save money.
💡 The Key Takeaway: Whether it’s defining target audiences or risk reduction, the benefits of market research can focus on product success and understand key attractors and detractors.
Is Hiring a Third-Party Team Worth It?
If we’re being totally honest, there’s never a time where the answer to this question is no.
Finding a market research facility that has a team of experienced pros to help you is essential if you want to have a successful project.
Because working with a good team gives you the perspective you likely wouldn’t have if you ran the project internally. Doing market research on your own is possible, but it’s not ideal. Data can be misinterpreted, along with other mishaps from not hiring a team with experience.
Our top benefits of working with a third-party team:
- Privacy: Depending on the type of research you’re conducting, it’s likely that participants will feel more comfortable answering questions put out by a third-party team. When respondents feel like they can be 100% honest, that’s when you get the best data. This is especially true for employee surveys.
- Objectivity: Like we said earlier, working with a team provides a new set of eyes to evaluate data. This promotes fresh ideas and different ways to interpret feedback.
- Saving time: When working with a third-party team, you and your team can focus on what needs to be done outside of the market research project.
- Experience: This one’s big for us. Market research or otherwise, would you want to hire a team with little experience? No! A team with years of experience means better quality data for your project.
- Advanced tools: An outsourced team will have easy access to important market research tools. The better the tools, the better your data. Market research can be tricky, and you want a crew who can navigate it successfully.
Before you just dive in and choose a company, though, you’ll want to do research on what company to pair with. Spend some time digging–only consider companies that have experienced teams and good client reviews.
Learn more in our blog post, 4 Greatest Factors for Choosing a Market Research Company.
💡 The Key Takeaway: As you can see, not only are there benefits of market research, there are major benefits to hiring a third party for that market research. Data quality, experience and high-end research tools are just a few.
Market research involves gathering data about consumers’ needs and preferences. However, for any product, company, or industry, market research is a valuable tool and helps for strategic decision-making.
Interested in learning more or receiving a proposal? Contact our team today.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
George is the Owner & President of Drive Research. He has consulted for hundreds of regional, national, and global organizations over the past 15 years. He is a CX certified VoC professional with a focus on innovation and new product management.
Learn more about George, here.