4 Ways Market Research Can Benefit Your Business

By Sarah Schmidt

How can you make better business decisions and avoid costly mistakes? It starts with market research. By analyzing objective industry data, you can move beyond "gut feeling" and ground your decisions in the realities of the marketplace.

Think of market research like a GPS. With the right business intelligence, you will be better equipped to steer clear of danger zones and pursue high-potential opportunities.

Research is a powerful tool for companies of all sizes, but it’s especially important for entrepreneurs and startups. As a small business owner, you may not have much room for error. When your financial stability is on the line, every decision counts.

Fortunately, market research can help minimize risk and improve your business strategy from the bottom up. Here’s a look at four ways it can benefit your business.

1. Market research can identify what your customers need and want

Who are your customers? What are they willing to pay? How can you meet their needs and exceed their expectations? Research can help answer these questions and give you an in-depth understanding of your customers’ needs.

By reading research reports on your industry, you can learn demographic information such as your target customers’ gender, age, occupation, and economic status. You can also find out what products and services they are currently using and what they like and dislike about them.

2. Research can help you understand the market

Through market research, you can identify key metrics such as market size and growth. Market research can help you assess whether the market is already saturated, or if there are regulatory hurdles or technological changes underway. These factors can have a powerful effect on your business and your future prospects. Keeping up to date on industry publications and research reports will keep you alert to these kinds of shifts.

More articles by AllBusiness.com:

• Introduction to Market Research
• The 5 Basic Methods of Market Research
• Top 10 Market Research Mistakes
• The Difference Between Secondary and Primary Market Research
• Best Practices for Conducting Market Research

3. Research can help you develop products that customers want to buy

Market research can help you know whether or not your product idea will appeal to your customer base. You can also gather competitive intelligence to find out how to differentiate yourself from other companies with similar products and services. By identifying the strengths and weakness of your competitors, you can develop unique offerings and create a strong value proposition.

4. Research can help you market your business effectively

To be effective, you must tailor your marketing messages to fit your intended audience. Finding the right wording, imagery, and tone can mean the difference between success and failure. Research can help you know who your audience is and what they care about.

It can also help you understand which advertising vehicles are most likely to catch their attention. To optimize your marketing efforts, take the time to investigate your target audience and strategize your messaging accordingly.

Getting started with market research

There are plenty of compelling reasons to conduct research. To begin, consider joining a trade association and reading industry publications. Review your competitors’ marketing materials to see how they are positioning themselves. Ask your customers for feedback and listen in on what they are saying about your company on social media and the web.

Research reports can also give you access to objective data and expert industry analysis. From real-world case studies to consumer buying behavior to company profiles, market research can give you the information you need to stay ahead of the competition and accurately gauge the pulse of the market.

RELATED: 4 Effective Customer Research Methods to Help You Understand What Customers Want