Market research is an essential part of running any business. Whether you plan to open a simple freelance operation or a multi-million dollar company, market research is the key to success. For example, learning how to calculate the occupancy rate for Airbnb locations nearby can allow you to predict whether investing in rooms to rent would be profitable. This can stop you from making a costly mistake.
The problem is that many people think that they can do market research easily. But there are mistakes you can make in the process that will spoil the information you gather. Here are some common mistakes that people do when it comes to doing market research.
Not Getting Enough Data
Many budding business people can be a bit stingy when it comes to getting the data you need. They go out and collect responses from a limited amount of people. This can bad for your research efforts. Sometimes, they only ask family or friends for input which adds further problems. When you are trying to get an idea of how the general population will respond to your business, you should be getting a large enough sample size to simulate the target population. For example, if your target demographic is in the thousands, then asking only ten or twenty people is not enough. It would be best if you considered talking to a hundred or more.
Besides the number of people you are asking questions from, the other half of getting the right amount of information is what exactly are you asking them. If your questions are vague or unclear, then you are not getting the appropriate amount of data from them. You might even miss out on important details. For example, you might be asking questions about the local market for luxury products, but you forget to inquire about why some items are more popular than others. It would be best if you calibrated your questions and inquiries to get all the necessary data.
Forgetting The Competition
Another common mistake when doing market research is to focus only on customers. It is also very important to keep tabs on your potential competition. If you are breaking into a market, your competitors are going to be a big obstacle for your efforts. Getting a share of the market with various businesses already claiming a piece of the pie is difficult. But it is very doable as long as you do your research on them. You’ll learn their business practices and what their target demographics are so that you can better position your company to claim your part of the market.
The important thing is that your researchers should go beyond a simple cursory examination. In-depth competition research should include an analysis of their product, their marketing campaign, and more.
Setting Complex Objectives
While it is common to have an objective when it comes to market research, you should have simple goals instead of complex ones. For example, your market research might focus on figuring out what the market wants. That sounds reasonable, but it is too broad and ambiguous. It would be best if you focused on specifics. Instead of trying to discover a wide array of customer needs, you might want to narrow it down to a particular demographic or limit it to a particular section of the market. This makes it easier to gather and analyze the data.
Depending On Only One Set Of Data
Some businesses stop once they get a set of data and start doing their analysis. However, any source can have minor mistakes or inconsistencies. Even if your people did the data gathering, it would be nice to have a backup source of data. Get them from primary and secondary data resources to ensure that you have a good spread of information to make up for any mistakes.
Dependence on Surveys
It is understandable why many businesses like using surveys as their main data gathering tool. They are easy to set up and can be analyzed quickly. It also helps that they are perfect for online spread and collection. Even the physical surveys are very popular with restaurants and other stores handing out survey flyers for discounts. However, they have limits when it comes to data gathering, and you need something more flexible if you want an accurate read of the market. Use interviews and more thorough tools to get more effective information instead of just depending on surveys.
Working with the wrong data can be devastating for a business. This makes it very important that your market research efforts are as accurate as possible. If you do it right, you will have the right projections for your business which can lead to success and profits for your operations.