Data - What Is It, When Is It Needed and Why?
Written by entrepreneur Angela Bradbury, CEO of Chime Advisors.
Knowing your customers, competitors and wider industry sector can mean the difference between success and failure for your business. Market research is the collection of information in all of these essential areas, involving two types of data: primary and secondary.
With the ‘research’ market growing by a staggering 62% to £4.8 billion in the last year according to the Market Research Society (MRS), more and more organisations are realising the benefits that good market research can bring at every stage of a business.
But for a business leader just starting to come up the curve on this, the platitude of sources and methods available for research can be overwhelming. Which ones to use, and when? What are the pros and cons? What do we mean by ‘data’, and ‘primary’ vs ‘secondary’ sources?
In this article, we answer all these questions and more so you can get started on your own market research journey.
In short, primary data, often referred to as ‘field research’, is information that is compiled through research completed by yourself or someone that you hire to conduct the process on your behalf. Secondary data is gathered from resources that are available and accessible elsewhere.
Primary data can be gathered via:
● Surveys and questionnaires
● In-depth interviews
● Focus groups
● Test marketing
Secondary data can be collated from the following:
● Public sources e.g. census data
● Newspapers and magazines
● Online articles, press releases, etc.
Do also bear in mind that data can be ‘qualitative’ or ‘quantitative’. The latter centres around statistics and metrics, the former opinions or expert perspectives. Both are useful: numbers can be misleading without understanding the context around them, and opinions can be misleading without numbers to back them up.
Of course, market research is important when a company is just starting out, but it’s also applicable for those launching a new product or service line, or expanding to new geographies, to provide insight into whether new offerings will appeal to new and existing customers, and how the target demographics might differ.
Even for well-established businesses with large market share and not currently looking to explore new offerings, their customer base will likely be shifting in terms of generational lifestyles, preferences and how they want to be communicated with.
All businesses - big and small, old and new - need to be aware of current and potential issues, and form evidence-based predictions and solutions for future sustainability and growth. Ongoing and up-to-date market research is essential for ensuring your strategy continues to be both forward-looking and effective.
So many reasons! Just some of the benefits of thorough market research (or costs of not doing it) are:
● Being able to articulate who your most valuable customers are and where to find more of them
● Positioning your brand to appeal to your target market
● Being aware of potential reputational risks
● Engaging with your current customers at the right times, in the right ways
● Knowing your competition, and why you might lose customers to others
● Understanding what adjacent markets are potential growth areas
● Taking advantage of emerging technologies and suppliers to improve profitability
● Doing due diligence on any investments you consider making, to reduce financial risk
...and so much more! Market research via primary and secondary sources, gathering quantitative and qualitative data, and using them appropriately for every function, at every stage of a business, will help you avoid pitfalls and spot opportunities where you might otherwise have blind spots.