If you were to go on a backpacking trip, you wouldn't just set out with no idea of where you were going. You would take along a map and a compass so that you could identify your location at any point during the trip. Otherwise, you could get lost and not have enough supplies to last you until help arrived.
When you don't do market research while starting a new business, it is essentially the same as setting off on a backpacking trip without a map and with no idea where you are going. Here are a few reasons why performing your due diligence is so important.
Identify Your Audience
Let's say that you were starting up a company that provides property maintenance services. Would you cater to commercial clients or multifamily residential properties? Through your market research, you would determine which audience has the greatest need, and therefore where you stand to gain the most in meeting that need.
Learn About the Competition
It is possible, perhaps even likely depending on the type of business you are starting up, that someone is already serving the needs of your chosen audience. Market research helps you to identify the competition. More than that, it also helps you to discover what your competitors are doing differently from you, helping you to analyze their strengths and weaknesses.
When you know your competition, you can make alterations to your own business strategy. You may want to cater to a slightly different audience, choose a new location, decrease your prices to be competitive, or offer incentives that your audience cannot get from anyone else.
Set Better Goals
Success in business depends partially on setting concrete, achievable goals for yourself and your company. Market research helps you to identify your own strengths and weaknesses, which in turn helps you understand where and how you have to improve. That way, you can set informed goals based on facts and figures with an eye toward growth instead of arbitrary goals that may or may not be worth your while because they aren't based on any data.
Advertise More Effectively
Advertising is crucial to get the attention of potential customers. However, it can also be expensive. When you first start out, your budget is usually limited, meaning that you have to save on business essentials such as advertising. The key, then, is not to spend more on advertising than you can afford but to use the advertising you do have more efficiently. Research marketing helps you find the best ways to reach your intended audience once you've determined who they are.
Connect With Customers
It's not enough to simply get your advertisements in front of your intended audience. You also need to create ads that will resonate with them. Marketing research helps you find out who your customers are and what's important to them. This allows you to create advertising that is relevant to their lives and therefore more likely to attract their attention.
Lower Business Risks
Starting a new business always involves risk. Success is not guaranteed, and failure is always a possibility. You cannot completely eliminate the risks, but you can increase your chances of success by performing market research. This allows you to delineate problems early on and understand them in detail so that you have a better chance of solving them before they overwhelm your company and drag it under.
Learn Where To Go for Help
Identifying your problems is one thing, but even once you know what they are, you may not have the ability to fix them, at least not on your own. However, once you have a clear idea of what your difficulties are, you can determine who has the necessary expertise to help you solve them. Maybe you could benefit from outsourcing some management tasks to outside firms or partnering with similar or complementary businesses.
Starting a business is hard, and it may be tempting to cut corners. Nevertheless, marketing research is really essential and not something you should ignore or avoid.
Publish Date: April 8, 2021 12:18 PM