Customers drive a business to success. Understanding your customers — who they are and where they come from — can help you offer better service. This is especially important when entering new markets. How do you know if this new market is going to be lucrative for your business? Enter: market research. Local market research helps businesses understand prospects and customers in target markets and regions. By gaining insights into your customers — their habits, preferences, goals, and motivations — you can improve your service and develop stronger relationships.
What is Local Market Research?
Local market research is the process of collecting specific information about your customers and prospective buyers. Your marketing or sales teams gather information about buyer personas and target audiences as well as existing or returning customers. The goal is to identify how your product will be doing in a new market or is doing in an existing market.
Benefits of Conducting Market Research
Market research helps your business slow down and pay close attention to your customers and buyer personas. More specifically, who are they? What are their pain points? What goals and solutions are they trying to achieve? And so on. Your business can then use this information to develop better products and a marketing plan that is more naturally appealing to prospects. Market research can help you identify:
- Where your customers are looking for products and services
- Where and how they conduct their research
- What features and services (solutions) they are looking for
- Which competitors prospects are looking at
- What’s trending in your industry
- What customers expect from a business or service like yours
- Specific customer challenges and pain points
- Who and what influences their purchases, and so on
By conducting market research, your business can identify strong markets, new areas of investment, strengths and weaknesses of your product, and new customer bases. Your teams can then create more effective marketing strategies.
Types of Market Research
There are many different ways to conduct market research and your teams do not have to do all of those mentioned below. Before doing any research, make a plan. Determine the goal of this research. Do you just want to learn more about your buyer personas or do you want to learn more about how your business stacks up against the competition? Similarly, do you have the budget to conduct a full-fledged analysis or can your teams make do with interviews and case studies? We have listed the different types of market research below so you can decide which ones make sense for your business.
1. Interviews & Focus Groups
Interviews (in-person or online) are one of the most common market research methods. Your teams take the time to speak with customers and prospects going through a series of questions and taking important notes. By speaking directly with the consumer, you can get a feel for their needs and preferences.
Focus groups are another common method of conducting research. With focus groups, a handful of pre-selected individuals are asked questions, test out products, watch product demos, and provide feedback or ask questions. This way, your teams can identify what aspects of your product and brand are clear and which areas need improvement.
2. Market Segmentation
Local market research gives insights into the new market that you plan to enter. And market segmentation helps you identify the best target audience for your product or service. Market segmentation is the process of dividing your target audience into smaller, more approachable groups or segments. Four main types of market segmentation include:
- Demographic (B2C): based on individual attributes
- Firmographic (B2B): based on company/ business attributes
- Psychographic (B2B/B2C): based on attitudes, traits, values, motivations, etc.
- Behavioral (B2B/B2C): based on usage, user status, purchasing/researching habits, etc.
By segmenting your market this way, you can approach product development, marketing, and sales with a renewed focus and cater to a wider audience.
3. Buyer Persona Research
This type of research is focused on creating realistic buyer personas that can help you develop better products and market more effectively. Buyer personas are semi-fictional representations of a target audience. Buyer personas are detailed and take into account a target audience’s:
- Work situation
- Desire, motivations, goals
- What products or solutions they need
- What they expect from your business
Your business can have multiple personas. Nailing these personas can help you target this audience better. Also note that personas develop over time so be open to modifying and updating your personas as new changes and expectations emerge.
4. Brand Awareness Research
You can also use market research to determine how well your brand or business is known in target markets and areas. Customers that are not aware of your brand will look to other brands for solutions that you offer as well. This part of local market research lets you know how much attention you need to pay to increase brand awareness.
You can even take this one step further to identify how well your solution is known. For example, customers in another market may not be immediately aware of how your product or service can solve an issue they might be facing. For that matter, some prospects may not even know they have an issue that your product can solve. This is an important aspect of market research because it lets you know where and how to market to these groups.
5. Qualifying Leads with Pre-Sale Surveys
Before entering new markets, every business needs to be certain that this new market is going to benefit the business overall. Otherwise, you might end up wasting money, time, and other resources. One way to test new markets is by conducting pre-sale surveys to qualify leads and prospects.
Pre-sales surveys are questionnaires reps use when speaking with prospective customers to collect qualifying information about them. These surveys help sales reps identify good leads, understand the leads better, determine their needs and pain points, etc. By doing this, the business can reduce time spent on acquiring bad leads by focusing on good prospects instead. This further streamlines the sales process making it more efficient.
6. Product or Service Use Research
This type of market research looks at how and why your customers use your product or service. More specifically, what features or benefits do they use the most and why. And also, what features are they struggling with. This type of research focuses more on the purpose and usability of your product so you can refine and create better products.
7. Observation-Based Research
Observation-based research is, as the name suggests, research pulled together through observing how customers and prospects interact with your product or service. This is similar to Product Use Research because it helps identify how usable your product is and what areas need to be clarified.
8. Pricing Research
If your business is a new one or you find that customers are not going through with the purchasing process, you may need to look at your pricing structure. One way to determine if your pricing strategy is well-developed is by observing what similar products and services or your competitors are offering. Pricing research focuses on getting insights into the prices similar products sell at, what target customers expect to pay, and what the competition is doing. These insights will help you build a better pricing strategy that customers are comfortable with as well.
9. Competitive Analysis Research
This type of market research looks closely at what your competition is doing. More specifically, what competition does your business have? What’s working well in your industry right now? What is your target audience looking for when it comes to products like yours? What additional features and services are competitors offering? These insights can help you develop better products and processes while being at the frontline of your industry.
10. Budget & Campaign Research
Businesses can also use local market research to plan out budgets and measure ROI on marketing campaigns and investments. Your sales and marketing teams can track call records, visit times, customer preferences, and customer pain points, to name a few. And then use this information to streamline marketing efforts and budget more effectively.
For instance, market research and metrics can highlight popular service times. In other words, periods of time or certain days that the business is more likely to have customer interactions. The business can then offer more services during those periods. Similarly, test marketing can identify which marketing and promotional efforts are working well and which are not producing desirable results. Your business can then decide to allocate funds and which strategies to pay more attention to.
11. Customer Satisfaction & Loyalty Research
Next, you can use local market research to improve your customer relationships. Connect with existing customers to understand how they use your product, how satisfied they are, and how likely they are to stick with your business. This information is essential in retaining valuable customers and learning how you can improve your product or service to attract more customers.
Take the time to understand your customers’ pain points and how they use your product to solve their problems. This can give you new insights into how you can refine your product and market it better.
Related: 6 Ways Customer Service Expectations Have Changed for 2021
How to Conduct Market Research
To conduct original research, your business will need a research team (or your marketing or sales team) and a plan of action. Here are some things to consider when researching markets:
1. Make a Plan
Start by making a plan and setting goals. Consider these questions:
- What do you want to research?
- What core customer or target group do you want to research?
- How will this research be conducted? In-person interviews? Observations?
- What type of questions do you want answered?
- Who will conduct this research?
- How much do you want to spend or invest in this research?
2. Choose a Buyer or Audience Group
Next, identify your buyer personas and audience groups. Define and flesh out buyer personas so that they are specific and can help you narrow down core customer groups. Then, use this information to identify groups to target for your research. Compile lists, review your market segments, and create customer groups for engagement.
3. Decide on Methodology
Once you have your groups ready, decide what type of market research you want to conduct and how your teams will conduct it. Think: in-person interviews, video or phone conversations, on-field observations, social media polls, email exchanges, and so on. Make sure your methodology and budget go hand-in-hand.
4. Prepare a List of Questions
Based on your focus and goals, prepare questions or questionnaires that customers will answer. If you are doing a usability test, then prepare steps that customers will follow to complete a task or achieve a goal. Either way, give customers clear instructions and simple questions, then follow up based on their responses.
5. Use Local Phone Numbers
Local phone numbers make it easier to connect with local customers and prospects in different countries. This is especially significant for companies that have an international customer base. Make customers and prospects feel comfortable answering your research or survey questions. And if they receive a call from an unknown number, they will be less likely to answer your call and provide feedback. Your business can get local phone numbers from a virtual phone service provider like Global Call Forwarding.
6. Summarize Findings & Results
Finally, once all research and tests are complete, review answers and results and summarize your findings. Then share this data with the rest of your teams, especially with marketing and sales teams. The next course of action is to decide how this information can be used to create better experiences for your customers and prospects.
Conduct Research to Build Better Customer Relationships
Local market research goes a long way in understanding who your customers and prospects are and what matters to them. These insights can help you develop better products and experiences that draw more customers to your business. They can also show you how to develop better relationships with your customers so that they come back for more and recommend your business to others!