Understanding who your target market and audience are can be one of the most challenging aspects of running a business. When building out your business’s marketing strategy, conducting market research can be one of the most helpful ways to understand your audience and set your marketing efforts up for success.
Market research will help you gather actionable insights and concrete data to ensure you are making informed decisions to maximise your marketing strategy. There are two types of market research: primary and secondary. Here’s everything you need to know before you start conducting primary and secondary market research.
Before doing anything, plan and budget
With a name like primary research, it sounds like this should be your first step when gathering information about your target market, but it actually comes after you’ve done your secondary research. Primary research requires more resources and will likely require budget allocation. By conducting secondary research first, you’ll have a clearer understanding of the areas you need to spend resources on to gather insights you couldn’t obtain from secondary research.
Before you get started, as yourself these questions:
- What are the business goals you are trying to achieve?
- What decisions will the market research help you make?
- What audience are you trying to reach? Do you already have a general idea of who your audience is?
- What level of insight do you need? Do you need very specific information and actions, or are you looking for a broad understanding of your market?
- How quickly do you need the information?
- What do you already know that will be helpful as you start researching?
- What is your budget?
Estimating the cost of market research is like budgeting for a vacation or a wedding — costs can vary greatly. Depending on the number of participants needed for your research, the type of research you’ll need for your goals, and data collection needs, your budget can be a range, so plan accordingly.
Don’t be discouraged by the idea of having to budget out your market research. With the right planning, you’ll be able to find a market research package that fits your budget and delivers results that will benefit your business.
For the best results, it’s recommended that you work with a market research firm to help direct your efforts, manage your budget, and analyse results. If you decide to work with a market research service or not, you should understand what your options are and how to prepare for them.
When you’re ready to start conducting primary research you have options. There are three main methods you can choose from, or select a combination of the three, depending on your budget. The methods are direct mail, phone interviews, and personal interviews. All three have pros and cons, but make sure to select one that will benefit your business the most.
Direct mail research happens by mailing out surveys or questionnaires to a select group of individuals. This requires you to secure a mailing list, produce the physical mailers, and then wait for responses from participants.
Direct mail can be a good channel for advertising your business once you’ve defined your audience. According to Australian statistics, direct mail actually has a high response rate in comparison with other methods of marketing - at 3.7% response compared to say, email, which is just 1%.
When conducting market research through direct mail surveys and questionnaires, stick to the following guidance to maximise responses:
- Keep it short: Questions should be short and direct to avoid any confusion and to provide the most helpful responses. The questionnaire itself should also be short — stick to two pages at the most.
- Personally addressed mailers: When mailing out a survey, address it to an individual instead of the whole household or “to whom it may concern”. By personalising, you will increase the likelihood of a response.
- Include postage: Include an already addressed and post-stamped envelope if required. By removing these barriers you’re more likely to get responses.
- Send a reminder: Mail out a second reminder about two weeks after the first mailer goes out. People are busy and can easily forget, so a little nudge can go a long way.
Another option for conducting research is through phone interviews and surveys. By reaching out directly to customers over the phone and asking a small number of questions, you can quickly gather insights for understanding your customers. Of course, this can be challenging today with so many people having an aversion to answering their phones, especially to unknown numbers. Younger generations — especially Millennials — dislike answering their phones, so take that into account when deciding if phone surveys are the right method for your business and who your target market is.
Follow these guidelines to get you started with phone surveys:
- Be direct and upfront with your intentions for calling.
- Avoid pauses or awkward silences which can lead to a drop in interest from responders.
- If needed, ask permission to reach back out for follow-ups or additional information.
- If you don’t get an answer, don’t leave a message, call back later.
Another benefit to phone surveys is that they allow you to reach a larger geographic audience than other channels. So if a wide geographical range of customers is a priority to you, consider phone surveys as your primary method for conducting research.
Personal interviews are the best method if you have a flexible budget and a long list of questions. There are two main types of personal interviews for conducting market research:
- Focus groups and group interviews: Typically the most common method for larger companies, focus groups are a good option for brainstorming product offerings, understanding buying preferences, and getting a deeper understanding of consumers’ purchasing behavior in certain markets.
- One-on-one interviews: If you have a long list of questions or a checklist to go through, one-on-one interviews can be the best option to gather the most meaningful insights. You’ll need to conduct a significant amount for statistical relevance, but they offer an opportunity to really connect with a potential market and understand your customers on a deeper level.
Secondary research is much more accessible and cost-effective than primary research. It’s a better option if you have a limited budget or already have a good idea of what your target market is. Before starting primary research, try doing your own secondary research to understand what areas you need to focus on to maximise the impact of your research budget.
Secondary research is also easier to come by. It has often already been compiled, analysed, and published by someone else. Secondary research can include, but is not limited to:
- Reports and studies from government agencies (including census data and labour statistics), research agencies, trade associations, education institutions, or other businesses in your industry.
- Published content from publications, trade journals, industry publications, competitor content, and more.
Some low-cost or free resources you can use for your initial or secondary research include:
Australian Bureau of Statistics: The ABS is Australia’s national statistical organisation and an official source of accurate, independent data. It collects and analyses statistics on economic, population, environmental and social issues. You will also find Census data listed with the ABS.
Australian Chamber of Commerce: The Australian Chamberof Commerce publishes information about products, services, and industries. The agency uses data to spur innovation inside and outside the Federal Government.
Trade Associations: There are numerous trade associations that publish resources specific to fields and industries. The ConnectWeb Directory of Australian Associations can help narrow down an association for your industry, or you can perform an internet search to identify publications most relevant to your business.
Australian Research Council: ARC’s aim is to increase knowledge and innovation for the benefit of the Australian community through supporting the highest quality research, reviewing the quality, engagement and impact of research and providing advise on research concerns.
Nielsen Global Media: Nielsen Global Media specialises in understanding data around what people listen to and watch, from podcasts to streaming TV or social media. This is what resource companies and advertisers use to connect to their audiences. While they are a paid service, they do have many free tools and reports that small business owners can use free of charge.
Understanding your target market won’t happen overnight, but it is a meaningful investment for your business. By collecting actionable insights direct from consumers or research studies, you can focus your marketing efforts better. This will help you be more intentional with your budget and time, increasing your return on investment, and ultimately reaching more customers.