Small Business Marketing Series - Vol 1
This is the first of our Small Business Marketing Series. The series’ aim is to provide small businesses in New Zealand with hands-on practical advice to increase their marketing performance. If your small business requires marketing solutions, get in touch with the team here.
MARKET RESEARCH
What is market research? It may seem like a simple answer; market research is simply understanding the market or industry that your small business works within.
However, it’s easier said than done. Market research can be defined by Investopedia as:
“The process of determining the viability of a new service or product through research conducted directly with potential customers.”
We would like to pitch market research to you as the windshield wipers in heavy rain – as it helps reveal and identify trends, current customers, potential customers, and much more, but is also ever-changing. That’s why conducting it regularly is important to understand your position within your industry and how it changes over time.
Who are your current customers?
Your customers are not the same. You may offer the same products and services; however, you will have a diverse range of customers purchasing them. Whether they are one-off purchases or recurring, it’s important to understand who is interacting with your business.
Typically, this would begin with a basic analysis of your current demographic. We advise using two tools to conduct this analysis – and hopefully, these are already set up for your small business!
Google Analytics
Facebook Business Manager
Google Analytics is a tool that constantly collects data from your website once it’s linked and set up to your Google account. The data ranges from pages visited and time spent on each page, to specific individual button interactions.
There’s a lot of valuable information that you can gather about your business from this platform. For example, you can analyse the source of your website’s traffic, the time of day they visit, your most popular pages, and more importantly their behaviour flow.
If you’re an e-commerce business, you can track your sales and how well certain promotions performed against periods where there were no marketing campaigns to track its effectiveness.
Facebook Business Manager is a tool that allows you to understand the demographic of people that interact with your business’s Facebook and Instagram pages. This includes information regarding the followers of your page, such as:
Age & gender
Towns & cities
Countries
On top of analysing your followers, this platform can also analyse both your organic post performance and pay-per-click (PPC) campaign performance. This information is vital for improving social media advertising campaigns and will be talked about later in this series.
If your store is a brick and mortar one, you may already know all the demographic information behind your current customers – for example, what your typical customer looks like, their age range, as well as their purpose for being in your store. This information is important to put down on paper and document – do not let it sit in your brain! Here’s a document we’ve created for you to download and print out to put all of the information behind your current customers.
Here’s an activity for you:
Write down your current customers’ information, including how long they spend on average in-store, what they look like, and how they heard about you. Compare this information to the data you’ve collected through Google Analytics and Facebook Business Manager – how different or similar are the results?
You may find that they are quite different.
Maybe people in-store spend more time looking around than on your website?
Maybe the demographic following your Facebook page is different from who you’re seeing walk through the door
Note down these differences on the template sheet.
Who are your target customers?
It may seem like there’s no difference between your current customers and your target customers, but let’s look at why that isn’t the case. Let’s say your store sells confectionery goods at a local level in Palmerston North. You may notice that your current customer base is comprised of people looking for gifts for family and friends.
Although you may wish to continue to serve this customer base, you may also wish to expand further incorporate gifts as there is a large market for this product offering. This would be one of your target customers. No, they don’t have to replace your current ones, but you’re making a conscious decision to expand further in this direction and profiling your target customers can help.
It’s likely that your view of your target market will adjust as you gather more information about them. Therefore, it’s important to start now and keep hold of all documentation that you develop to compare against.
Who are your primary competitors?
Primary competitors are direct competitors with the products and services that your business provides. For example, a confectionary store’s primary competitors are other confectionary stores at a local level selling nearly equal product (chocolates vs. chocolates).
Who are your secondary competitors?
Secondary competitors are those that indirectly compete with the products and services that you sell. For example, a secondary competitor of our confectionary store example could be a floral store or gift store – this is because they may compete against you for your target customer’s attention.
Should I buy chocolates or flowers? – After all, there’s a maximum dollar value that the customer is willing to spend on a business’ services.
What is the size of your market?
What percentage do you control?
When it comes to measuring the market size, it’s useful to picture it as a pizza – how many slices do you have over your primary/secondary competitors? To determine this, we need to determine the total value of the market, and then look at how much of that contribution is yours. This will include a lot of research around your market and industry – this includes but is not limited to national statistics, market research reports, MBIE documents, as well as keyword analysis tools and techniques. If research is not your strong point, don’t worry. We can use Google Analytics to determine the amount of traffic that is coming through to your website. In the search bar on Google Analytics, type ‘Top keyword by sessions since [month]’. On the right, you will be shown a column of keywords that your business is currently generating organic search traffic from.
The downside to this is that it does not show you the total percentage of search traffic for these keywords. This information is only accessible through paid subscriptions to tools that analyse this data. These tools are relatively expensive, so use this as a last resort if you’re unsure.
Did you know that 33% of users click on the top organic search result on Google, and almost 92% of organic search traffic goes to the top 10 results?
It’s important to keep these statistics in mind when looking at your current positions for certain keywords. For example, if our hypothetical chocolate company searched ‘confectionary shop Palmerston North’ and found that it was not ranked for the first position, then we can estimate that they are missing out on at least 33% of traffic for that given keyword. There are a multitude of tools and tactics to analyse your market and approaches differ per industry – it’s important to know what best works for your business.
What are the current market trends?
Market trends allow businesses to not only innovate and evolve in the right direction but also expand their overall competitiveness. This could be through creating content that their competitors don’t have, as well as positioning products a certain way.
So how do we find out more about industry trends?
Explore what the world is searching for with Google Trends. Here, you can search for keywords that your business ranks for and filter them by country and region. For example, if we type ‘buy chocolate’ we are shown the interest over time for this specific keyword. On top of this, the keyword is broken down into the subregions that it is popular within as well as related topics. It’s important to note that this is a quick and free way to determine interest for certain keywords – unfortunately, the more specific you try to get, the less chance there is for significant insights. This is one of the drawbacks of using Google Trends.
On top of Google Trends, researching industry-related marketing reports is important (unfortunately, most of these remain behind paywalls). Trends can also be researched via social media platforms directly – by taking a deep dive into the people that are talking about your brand or industry. For example, our confectionary business may notice that there is significant traction behind the plant-based movement across New Zealand. This movement is already changing the way cafés and restaurants think – but will soon impact consumer choices in other food-related stores. By looking into plant-based Facebook groups, our hypothetical business could gain significant insight into which direction they could take their artisanal dark chocolate range.
How do you compare against your competition?
Now that you understand your market, it’s time to dive into your brand’s strengths and weaknesses, as well as opportunities and threats (also known as a SWOT analysis). Although SWOT analysis may seem straightforward, it’s often not correctly done. Did you know that strengths and weaknesses are the internal factors behind your business, and opportunities and threats are solely external factors? This is an important point as it truly analyses the controllable (internal) and uncontrollable (external) business elements that you face.
Strengths:
Your strengths are what your business is great at – not just good at. These should include your unique selling points as well as your competitive advantages. Generally, they are difficult to replicate if your competitors were to do so. For example, the strength for our hypothetical confectionary business may be that they have strong engagement compared to their competitors across social media platforms. This would be difficult to reproduce by the business's competitors, making it a competitive advantage.
Weaknesses:
Your weaknesses are what your business could improve on. They are typically areas where your competition is more active or engaged. The point of illustrating this is so that you can increase your competitiveness in this space, or at least understand where your business currently sits through developing on these points.
Opportunities:
Opportunities are the external market factors that your business could utilise as a launchpad to gain more customers or a competitive edge. They may be made up of key societal trends. In the case of our confectionary business, an easy example is Valentine’s Day or Christmas, with more complex examples being the increasing demand for luxury corporate gifts for events, functions and more.
Threats:
Threats are the external market factors that affect your business in a negative light. A simple example may be the increasing production of artisanal chocolates at an industrial level – driving prices lower for quality products. More complex examples may be policy changes regarding fair-trade cacao production and processing on an international scale. It’s imperative to work through all the possible examples and ensure that your business not only understands each topic’s key factors but also has a strategy to approach each one.
How do I conduct a Digital Channel Analysis?
A digital channel analysis is like a SWOT analysis. It’s an audit of your social media channels and how they drive traffic to your site or other digital resources that you have online. Like a SWOT analysis, they can be compared against your competitor’s channels and analysed.
Some key questions to ask when it comes to a digital channel audit is:
How does each channel compare to my competitors?
Do my competitors have channels established where my business doesn’t?
(Think about more minor channels such as Pinterest, TikTok, Snapchat etc. – these will obviously be industry dependant and not a one-size-fits-all.)Who is engaging with my posts?
Who is engaging with my competitor’s posts?
Is my brand’s style and voice aligned across channels (including website)
For more information on the right questions, get in touch here.
Wrapping it up
And that’s a wrap on our first blog of the series! Now that you have all the data, we recommend that you take the time to analyse it and make notes on your findings. If you’re looking to get all the above complete, but don’t have the time or resources to do it now – Let’s chat. We are an experienced Palmerston North digital marketing agency that can help with your market research and implementation.