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Customer Research: How to Find Your Perfect Target Market
What Is Market Research?
Market research helps you identify who your customers are, divide them into segments, and in some cases even develop customer personas – or fictional representations of your ideal customers – to use as inspiration.
The goal of your research should be to find out who is using your services currently, and who will be in the future, as well as their reasons for doing so. Many different factors can impact whether a person buys a service and which service they ultimately buy like age, values, or income level. Consider where and when the customer will have a need for/use your service or might hear about it.
Now this may seem like a lot of work to do upfront, but don’t worry, we’ll walk you through it.
Why Is Customer Research Important?
You might be asking yourself, why is it so important for me to do this research before starting my business? It just doesn’t seem that necessary, and there’s only so many hours in a day. Shouldn’t I be spending my time on more important things like hiring more employees or marketing my business?
Well, here’s why conducting customer research before starting your business is worth spending your time on. With customer research, you’ll ultimately:
Save Time and Money: With comprehensive customer research in your arsenal, you’ll be able to start promoting your business to the right people immediately. This saves you time and money because you’re not guessing what your customers may think or marketing to the wrong people.
Save Headaches: In terms of marketing, customer research is the closest you can get to being psychic. Why rack your brain trying to figure out how to best communicate with your audience when the data that customer research yields will help to answer all these questions.
With customer research, you’ll know exactly where to advertise, what to put on your website and other marketing materials, and even how to speak to customers’ specific needs when closing deals.
How to Conduct Market Research
Customer research can be done through a variety of methods like interviews, focus groups, surveys, reading social media and online forums, and even checking online reviews for other businesses.
But one of the quickest and easiest methods is looking through census data about your area and then researching what these demographics could say about your audience. For example, if someone is between the age of 30-64, you can see from Pew Research’s social media sheets there’s a 73-77% chance that person has a Facebook account.
Best Tools For Market Research
Below, you’ll find a full list of tools you can use to guide you while researching your audience. You’ll find templates to fill out to collect this information, websites with these demographics listed for specific areas online, and how to create online surveys to collect customers’ opinions – and incentivize customers to fill those surveys out.
Customer Research Template – Use this downloadable template to guide you through the process of researching your customers.
Customer Profile Template – For some people, it can be easier to sell their service to a specific person instead of a generic one. This template outlines how to create a customer persona or fictional representation of your ideal customer and you can use these guides to walk you through creating customer personas for your business.
City Data – This website provides a highly detailed breakdown of cities, with everything from demographics like age and income to older homes’ highest densities and a list of radio stations. To get started, simply type your city or zip code into the search bar at the top of the page. This will bring up a page like this one where you can find all of an area’s demographic data.
Census QuickFacts – Census.gov has one of the most comprehensive resources for researching customers with hundreds of categories you can browse. With their QuickFacts tools, you can get information about any state, county, city, or town with a population of over 5,000. These reports will show you statistics surrounding age, sex, race, expats, family and living arrangements, home value, computer and internet use, income, and more.
Wikipedia – If you search for your city on Wikipedia (e.g. Dallas, Texas), you can find a detailed list of information about your city including demographics like race and ethnicity, history and recreation.
Pew Research – This has detailed research surrounding social media, technology use, and social and demographic trends for specific populations. Their social media sheets in particular are helpful and show information like which ages, races, genders, income levels, and more use social media, which platforms are most popular among them.
MyBestSegments – This tool allows you to see which demographic and psychographic groups live in a given zip code. This is a great way to start segmenting your customers.
GiftBit – This tool will allow you to purchase, send out, and track digital gift cards to incentivize customers to complete surveys. This process can even be automated, and allows users to choose their preferred gift card.
Customer Demographics To Consider
Gender and ethnicity can determine how people spend their time online – for example, women tend to be more active on social media than men, and POC are more likely to be active on mobile apps than websites.
Pro-Tip: You can find more information about social media usage by demographic here at Pew Research. Pew Research has a wealth of information about social media trends.
- Adopts new technology quickly
- Uses localized apps like NextDoor, local city forums like Reddit, Instagram, and Facebook groups for their area
- Often disconnected from their neighbors and rely on suggestions from the internet or co-workers
- Spends a significant amount of time online for work and leisure but may lack broadband access at home and rely on their phones to connection
- Adopts new technology less quickly
- Uses localized apps like NextDoor, local city forums like Reddit, Instagram, and Facebook groups for their city or HOA
- Often relies heavily on the suggestions of neighbors
- Spends a significant amount of time online for work and leisure and often have broadband access at home and use multiple devices
- Adopts new technologies slowly
- Uses very few apps, forums, and localized apps but are heavy Facebook users
- Open to neighbors, coworkers, and their local church’s suggestions but often turn to Google and traditional advertising like direct mail, phone books, and billboards
- Spends little time online, usually for leisure and to connect with family/friends
- Often lacks broadband access at home and rely on their phones to connection
Older homes tend to experience more issues. Identifying older homes in your area with tools like Zillow and other real estate sites can help you target audiences more aware of their needs and more likely to reach out to you. Alternatively, you can reach out to property managers and real estate agents on Zillow and related sites who would have this information and make great partners – just make sure you have the proper insurance in place.
Your customer’s occupation provides insight into their daily habits. If someone commutes or drives between jobs, they may listen to the radio and regularly see billboards. Someone in an office, meanwhile, may spend more time online checking their email and social media during downtime.
Stay-at-home moms, in particular, are heavy social media users (81% use Facebook compared to 61% of the total population) and are often conscious of how they spend their money because of financial pressure and search for deals online
The household composition can reveal a lot about your customers’ priorities. If a customer has young children, they may be more mindful of their expenses, see repairs as an investment, or require financing.
Meanwhile, households with adult children may be focused on legacy and passing down their home to their children or increasing their home’s value to sell it as they near retirement.
How do your customers typically spend their downtime? Are they a homebody or out and about? Do they attend church, school programs, or local events? Which local businesses do they visit? What do they read (websites, blogs, news sources)?
Customer’s hobbies are jumping-off points for connecting with them. Leave business cards at the gym. Hang up posters on your church bulletin. Sponsor local events. Place ads in local newspapers.
What influences your customers to make a decision? Are there social factors at play like family, friends, neighbors, co-workers, or organizations? Are there any economic factors at play (are they actively searching for deals, attitude towards spending)? Psychological factors (social responsibility/convenience)?
Now that we’ve covered all the different facets of customer research, you’re ready to get started!
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