Business research is the collecting and analyzing of objective data about your target market, your competitors and strategic partners, and your products and services. You can easily find wordy, complex definitions of business research all over the web.
At its heart, though, business research is defined as the process of gathering comparative data in order to make an informed decision about one or more aspects of your business.
The goal of business research is to create as much understanding as possible about the future of your business, the best moves to make, and the right turns to take to ensure a positive, optimized, profitable business undertaking.
Gathering the detailed information your business needs to make the most of consumer experiences and maximize revenue and profits is the key purpose of business research.
Most often, business research is used in reading marketing metrics and in making marketing decisions. Marketing decisions inform product development, define pricing, influence business structure, and even help define shipping and delivery choices.
The benefits of business research
Business research has one critical benefit every business owner needs – it helps you understand your target market. Without a thorough and complete understanding of who your target market is and how, why, and where they make purchases, your business will always struggle.
Data and consumer based research also helps you define your unique selling position, make strategic product choices, and identify gaps in your industry. It can also significantly lower risks, identify trends in your industry, and show you what your competition is doing successfully and – even more importantly – unsuccessfully. Finally, business research can identify strategic partners – other business owners who come into regular contact with your target market but are not your competition.
Business research forms a comprehensive picture of your total marketplace that enhances your decision-making abilities. It also helps you understand upfront and operating costs because it informs you of expenses that might otherwise be hidden. Permits, licenses, documentation and filing fees, taxes, and advertising costs are just a few of those.
You might also uncover potential expenses like average rents, venue costs, transportation and delivery costs, and production costs. Finally, business research can help guide your cashflow spreadsheet (especially for startups and other pre-revenue businesses), sources and uses documents, and other financial aspects that affect the future of your business.
The five basic types of business research models
Each of the five types of business research models we’ll discuss fits into one of four main research methodologies: quantitative, descriptive, correlational, or experimental. Let’s start with a brief explanation of these research methodologies to help you more easily understand the five basic research models.
- Quantitative research relies heavily on numbers, weights, and measures like statistics, figures, and benchmarks
- Descriptive research describes qualities and traits and simply offers objective data
- Correlational research is non-descriptive and simply strives to contrast, measure, and compare the relationship between differing research variables
- Experimental research is systematic in its approach to examine the cause and effect relationship of research variables
With that understanding in place, these are the five business research models you can use to develop your business, understand the behaviours and buying patterns of your target market, and increase your revenue potential.
1. Data collection and analysis (research method: descriptive and correlational research)
While many entrepreneurs and small business owners engage in data research in the startup phase of ownership, in reality, every stage of your business benefits from data collection and analysis.
At the beginning of their business research, most business owners turn to
They also look for other businesses offering similar products and services to determine what profits and losses they’ve experienced. Finally, they look at consumer interest and sales data from government and trade association publications and statistical data.
These are simple, easily affordable ways to get the business research you need in your hands fast. It makes sense because in matters of collected research, you cannot reinvent the wheel – the numbers, statistics, and data are what they are. They tell the story they’re intended to tell and leave little room for misinterpretation.
This list is in no way exhaustive, but some of the data your business research collects and examines should include:
- Records of previous consumer purchase and transaction patterns
- List and leads of customers with an expressed interest in your business genre
- Data regarding your target market’s interaction and engagement with your website versus social media channels versus retail location
- Relational data like how often your target market reads subject-based blogs or visits specific websites (other than yours)
- Social media data like which three social media platforms your ideal consumer spends most of their time on
- Communications data that tells you how your ideal consumer prefers to be reached and how they prefer to reach you for purchases and support
Pro-research tip: The data collection and analysis business research model has the added advantage of giving you access to data from a number of years. That information allows you to track market trends and make accurate predictions for future market moves.
2. B2C and B2B surveys (research method: quantitative)
Surveys are a popular business research method. They’re an amazing tool because they allow you to hear directly from your consumer. If you ask them via short, simple, easy-to-complete surveys, they’ll tell you the critical information you need including what dollar amount they’re willing to pay for your products or services and how often they anticipate needing to reorder from you.
Surveys also tell you about their customer service experiences and preferences, the product updates and upgrades they’ll look for in the future, and their preferred delivery methods (digital vs print, standard vs express, live vs virtual).
With research surveys, you gain insight on product research and development, gain invaluable insight that drives future marketing metrics, and can tweak, update, and improve your business practices and procedures. Apart from their research value, surveys have a built-in bonus feature – they give you a pool of potential leads who are interested enough in your products and services to spend a few minutes of their time on your survey. Those leads are goldmines for future sales.
Customer service is the lifeblood of any business because the way you treat customers post-purchase can turn a customer into a one-time-only purchaser or into a repeat customer. Also, consider the following survey types to help move your business along. All these survey types work for B2C (business to consumer) and B2B (business to business) research.
- Product and service related surveys that allow consumers to provide feedback that drives future product development and marketing efforts
- Post-event surveys are an absolute must-have for any live or virtual event where large portions of your target market are together in one location
- Potential employee surveys that ensure fair hiring practices and best-fit-employees as you add team members – particularly those while might serve in a client-facing role
Pro-research tip: When surveying existing and potential clients and team members, avoid complex long-winded survey questions. Instead, ask short questions that produce needed answers and make the survey participants take as few steps as possible.
Multiple choice questions work best, but one or two open-ended questions allow you to hear the real voice of your consumer. It’s also a good idea to offer anonymous surveys. These often lead to more honest responses which are always better than sugar-coated responses that have the potential to taint research results.
3. Targeted interviews and focus groups (research method: quantitative and correlational)
On par with business research surveys, targeted interviews and focus groups are strategic methods of business research. Made up of one-on-one interviewees or of small, carefully selected groups, these research models sometimes include a moderator who shares products and services, asks questions designed to elicit feedback, and prompts participants to share thoughts and opinions.
Targeted interviews and focus groups require much more of a time commitment but offer a distinct advantage over other research methods. They let you understand more about your target market than can be seen in reports and surveys. Live research lets you examine and read body language and helps you hear and decipher vocal cues, like tones and intonations, that risk getting lost in the translation to paper.
Interviews and focus groups let participants see, hear, smell, taste, and touch your products and services providing you with even more valuable feedback. Additionally, this business research model leaves little room for assumptions because it lets you ask open-ended questions, follow-up questions, and clarifying questions that lead to a better grasp of consumer use, which, in turn, leads to greatly improved product design.
The key to successful targeted interviews and focus groups is avoiding the tendency people sometimes have to influence each other. Be careful to elicit and hear individual thoughts and ideas as opposed to allowing your focus group to form a one-group-thinks-all feedback. Consider the types of targeted interviews and focus groups, then consider which is a best fit for your business model. Those types include (but are not limited to):
- 1:1 interviews where each participant is asked a specific set of targeted questions
- Two-way focus groups where one group of participants observes another and completes a resulting evaluation form
- Moderator facilitated focus groups where an assigned moderator guides the participants ensuring a smooth flow and a complete set of responses
- Online-only focus groups open the door for a larger pool of participants and have the added advantage of anonymity which can aid in receiving honest feedback
Pro-research tip: Conduct individual interviews and fill focus groups with members of your target market. Be careful, too, to include John Q. Public in your focus groups, even – almost especially – if he hasn’t expressed an interest in your products and does not fit into your target market. His or her reactions and insights may give you just the ammunition you need to sway others into becoming part of your target market.
4. Website traffic data analysis (research method: experimental and quantitative)
Nearly every business in existence today has a website. Consumers demand this online presence and use it to research businesses in their own right. They look for products and services, information about a business, consumer reviews, and location and hour information. In addition to being 24/7 sources of information, websites are also 24/7 purchase portals. That makes driving traffic to your website a critical function of doing business. Websites have another function as well – they’re excellent business research models.
From online surveys to traffic analysis to keyword usage, your website provides important insight on how consumers find your website, what they do once they’re there, and how they rate, compare, and select products and services. Alongside the data you mine from your own website, there are other websites that can give you the consumer demographic information you need.
Use the search engine and webmaster tools to research and analyze consumer behavior in relation to all aspects of your website. These data and research tools can reap information like average purchase price, preferred shipping speeds and methods, abandoned shopping cart analysis, and can help rank purchases from last ordered to most reordered to least likely to sell. You can also use the web to find government publications, data-rich reports, results of previous consumers surveys, and to create surveys of your own.
When using the website traffic data analysis research model, look for the following data to scrutinize:
- Your website’s best performance pages tell you what your consumers are looking for on your site
- Your website’s traffic reach that tells you how many people visit your site in a given period of time
- Your website’s traffic source data that tells you whether traffic comes from search engines, hyperlinks, or peer-to-peer sharing
- Your website’s conversion rate helps you understand how many people visit your website and how many visit your website and convert from visitors to customers
- Your website’s bounce rate tells you how many visitors leave your site quickly which can indicate important things like a site that takes too long to load or a broken link
Pro-research tip: More people search for consumer goods and services on their smartphones than on any other device. Make sure your research model includes uncovering how people use handheld devices to crawl your website, leave reviews on consumer review sites, find you on social media platforms, and perform keyword-based internet searches. This is an important research factor because the way consumers search with their thumbs can vary greatly from the way they research on a full keyboard.
5. Case studies (research method: descriptive and experimental)
Although time-intensive, case studies provide a wealth of information for the business researcher. They yield information about existing and potential consumers, their purchasing patterns, and customer service experiences that cannot be found using other research models and methods. That’s because case studies put products and services in the hands of your consumers for daily use. Unlike a focus group, it gives them a chance to experience products the way they’ll actually be used – in their own homes or offices.
Case studies can be used for virtually any product or service, both consumer bases (B2C or B2B), and at any level of business from startup to growth and expansion that determine which products to launch to research and development that leads to upgrades of existing products. They can tell you how long consumable products last before a replacement is needed, how durable one-time purchase products are, or how frequently consumers need or expect to revisit service based businesses.
Like all other methods of business research, case studies can take on many forms. They include:
- Explanatory case studies which are largely descriptive and often provide readers and researchers with case studies in story form
- Collective case studies compare different businesses and their varied roads to goal resolution
- Exploratory case studies identify basic functions and compare and contrast which specific measures led to success or failure
- Results-based case studies identify how specific products and resources led to a successful outcome
Pro-research tip: One of the ultimate goals of a consumer case study is
Each of the five business research models above is part of one of four research methodologies – quantitative, descriptive, correlational, or experimental research. Savvy business owners conduct research so they can gain insightful knowledge of their target market, competing businesses, and strategic partners.
Knowing your competition and analyzing their successes and failures is as important as knowing your ideal consumer. Business research further helps you identify risks, know which risks to avoid, and which calculated risks to take.
Recommended book: Business Research Methods