What is online Market Research?
Market Research is defined as the process of gathering, analyzing, and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present, and potential customers for the product or service.
“The aim of market research is to know and understand the customer so well, the product or service sells itself”
Says Peter Drucker, Management consultant.
Traditionally, market research was conducted by going door-to-door and generating findings after meeting with potential buyers and customer segments. In the digital age, online market research makes more sense as it helps organizations reach out to their target customers and understand sentiments in a simple and fast process.
Similar to traditional market research, online market research gathers information and preferences about the target group, product, or target market that enables organizations to develop strategies that best fit the purpose of generating revenue by catering to the market.
Market Research is typically used not just for defining marketing goals and plans, but it also impacts the company’s sales strategy and targets, revenue numbers, product features and focus areas, services and offerings, and a lot more avenues.
Given the criticality of this exercise, online market research should have a defined strategy and focus. Let us understand the purpose and process of online market research to help make it effective.
What is the Purpose of Online Market Research?
Accurate information and market insights are foundations of building a successful business as it provides the right perspective to the enterprise to create products and solutions that the market needs.
The purpose of conducting online market research is:
1. Understand target customer
Who will buy your product or services and cater to your strategy aimed towards this target group?
2. Understand customer behavior
Why will the customer buy your product or services? What factors influence buying patterns, and how can you use it to your advantage?
3. Find revenue opportunities
Analyze buying patterns to find out what is the right pricing or positioning strategy to make the odds of success higher.
With this objective, businesses can conduct online market research to make their products and services more relevant to their customers.
An example of how successful online market research can generate high ROI (Return On Investment) is seen with online jewelry market analysis.
Clootrack analyzed modern shopping trends of over 20,000+ customers to showcase the potential of the online jewelry market, factors that drive customers to buy jewelry online, and how sellers can incorporate these findings to drive higher sales. There are many more insights and case studies for various industries that prove the benefits of online market research.
Online Market Research Process
Online market research is conducted in two ways:
1. Primary Research
Primary research enables you to get first-hand information by directly contacting your potential target group. This research can be in the form of interviews and surveys which the target group has to complete, using which you or the organization you depend on for the research can create a summary to create an understanding of the market.
2. Secondary Research
Secondary research is all the publicly available data that you can leverage to define your target market. This research is compiled using reports and studies conducted by other businesses, government agencies, media, and research organizations or other sources such as keyword listing, competitive listing, etc. that have already conducted research and have quantifiable data from it.
Although secondary research presents information to you quickly and without needing any research to be conducted first-hand, it may not always have the data you need since the research parameters, target audience, and outputs are not created specifically for any individual or brand. Hence, many organizations conduct their own online market research through internal teams or leveraging a third-party marketing analytics firm specializing in this field.
Steps of Online Market Research
When conducting market research online, organizations must follow a step by step process:
Define the target group
Your target group or buyer persona defines the person who is your target buyer and whom you are targeting through your campaigns. To define the target group, it is vital to have information like your target group’s age, location, job title, income, challenges, department, industry, etc.
Prepare research questions
Once you have decided on your target groups, identify the questions that are relevant to the particular group. E.g. if your product or services targets buyers from both technology and business departments, make sure the research questions are segmented accordingly to get accurate results. Also, make sure you provide questions with relevant options and do not have any loose ends to make it specific.
Engage the participants
The next stage is to decide how you plan to reach out to your relevant audiences. This can be from various marketing channels like social media campaigns, email campaigns, direct customer outreach, or online research portals that can help disseminate the survey to the relevant target group. The objective here is to ensure you reach out to as many relevant audiences to make the whole process fruitful.
Create a summary of the findings
Once the results are in, start compiling a summary of the findings and bucket them properly. The findings should have an executive summary, findings and action plan, participant background, and detailed information on what the results signify.
Quoting Dan Zarrella,
“Marketing without market research is like driving with your eyes closed.”
The end output of the research should tell you what your company road map should look like based on the findings.
Uses of Online Market Research
Edward Deming, a data scientist, has famously said,
“Without data, you’re just another person with an opinion.”
Online market research enables organizations to validate their beliefs and arm themselves with validated facts that can help them convert potential leads into customers. Online market research is the preferred option by most companies because of the various uses of market research:
1. Global Reach
For global companies, online market research makes sense since it can enable outreach to its audiences globally without needing the research team to be physically present in any particular location
2. Multiple Target Platforms
Most business customers are now online and connected with the brand on an online medium, meaning online market research can help reach and segregate multiple target groups.
3. Flexibility
Online Market Research provides flexibility to the researcher and the customer. To give an example, the online research can be in the form of an email, social media ad that can reach the respondent on his/her preferred platform. Additionally, online surveys can also allow users to edit their answers or the researcher to revise questions easily.
4. Customization
Online market research allows for higher customization as opposed to the traditional method since the researcher is aware of the target group before contacting them.
5. Speed
Since the creation, distribution, and analysis of online marketing research can take place on the fly, the speed of conducting the research is much faster.
6. Cost-Effective
Online market research is cheaper and more viable since it can reach out to multiple target groups and customers using various mediums without requiring significant effort.
7. Competitive Advantage
Given that small and medium enterprises do not necessarily have the budget to perform a marketing analysis like large enterprises, online market research proves to be beneficial, given its ease of use and personalized budgeting. This gives industries and enterprises of all sizes an even platform and provides a competitive edge if used effectively.
8. Customer Focus
Market research enables businesses to create products and services that the customers need, enabling them to focus on the customer leading to higher chances of success.
9. Strategic Selling
A better understanding of the target audience enables an organization to position and price their products and services better, enabling strategic selling to drive higher returns.
10. Proven ROI
Companies that perform market research and analyze it effectively, generally do better than the ones that don’t. It is a powerful tool for boosting profits. In fact, there are companies that have raised $500,00 in capital using market data from online research, test and repositioning their product positioning, and rapidly scale their software company by tracking survey results