What is Business Research
A comprehensive guide to business research, its types, importance, and practical applications.
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Did you know that over 80% of businesses that use research to guide their decision-making processes report better outcomes?
Business research helps companies comprehend the markets, customers, and internal operations. But what exactly is business research, and why is it so important?
In this page, we will discuss the concept of business research, its relevance, and how you can utilise it efficiently.
What is Business Research?
Business research is collecting, analysing, and interpreting information to make strategic choices. It helps in the reduction of threats and the increase of chances, be it assessing current market trends, studying consumers, or improving efficiencies within the organisation.
Rather than merely stating facts, it explains, leading to an opinion or a forecast.
For instance, a logistics company collects data regarding the vehicle routes, the consumption of fuel, and the timing of deliveries. With the help of this information, they strive to reduce the wastage in their routes and the driving patterns of the drivers.
Why is Business Research Important?
There are a lot of brands out there that the customers have access to and may swiftly change brands if a competitor offers a better product. Business research gives you the advantage of keeping ahead of your competition by allowing your organisation to track them. By doing this type of research, companies can lower expenses and develop products or solutions tailored to the needs of the right customers and market demand.
Identifying market opportunities
Businesses can find unexplored ideas and fresh chances to increase sales by researching industry trends. You can enhance the marketing strategies by carefully examining customer feedback and engagement metrics. For expansion, a retailer, for instance, can utilise research to identify new markets or fashion trends.
Better decision-making
Making wise decisions increases the likelihood of success, whether selecting the best course of action or determining which product to release first. Using the analysis, you can weigh the benefits and risks and make an informed decision. With proper research, you can make decisions based on facts rather than guesses.
RELATED: The Customer Decision-Making Process: 4 Things You Ought to Know
Keep up with the competition
Research enables you to identify fresh opportunities and dangers in the industry. This allows you to alter your plans before those of other businesses. You can quickly pivot and generate fresh ideas when you are aware of market trends, consumer behaviour, and competition performance.
If you’re looking for actionable tips to keep up with the competition, this simple guide will come in handy.
Enhancing current goods and services
Maintaining competitiveness requires constant improvement. Finding opportunities to improve on current products or services is made easier with the help of business research. You should pay attention to what customers want, which enhances the quality of your goods and services.
To effectively enhance your current goods and services based on customer wants and needs, gathering accurate and actionable feedback is crucial. One tool that can streamline this process is SurveySparrow, an intuitive survey platform designed to help businesses collect and analyze customer insights efficiently.
This tool offers customizable survey templates and various question types to help you understand customer preferences and suggestions. Its user-friendly interface makes it easy to create engaging surveys. Plus, the platform’s analytics features can help you quickly identify trends and improvement opportunities, allowing you to make data-driven decisions
96% of top businesses use research tools.
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Recognising the needs of customers
It’s critical to comprehend the attitudes, actions, and motivations of your customers. Businesses can develop products and targeted marketing plans that satisfy customers’ needs and raise customer satisfaction. You can customise your products and services by employing data to obtain an insightful understanding of customer needs.
FURTHER READING: What is a Go-To-Market Strategy?
Types and Methods of Research in Business
Business research can be classified into two major groups, qualitative and quantitative. Qualitative research studies the reason “why” customers act in a certain way through interviews or focus groups. Quantitative research, on the other hand, works with absolute numbers and charts to detect trends. Each of the two contributes to the overall understanding and often together provides the most distinct picture.
Quantitative Business Research
Quantitative business involves assessing sales figures, trends, and other data that help make business decisions. This research deals more with numbers such as sales, customer behaviour, and financials. Let us see how this works in practice with a case.
Let’s say that your online retail business wants to investigate the productivity of its sales department. You gather quantitative information on performance metrics such as:
- Sales volume
- Revenue from sales
- The percentage of customer purchases compared to all visitors
- The cost incurred in securing a new customer
Through the means of:
- Close-Ended Surveys
- Experiments
- Observational Studies
- Secondary Data Analysis
- Web Analytics
- Questionnaires
- Financial Analysis
Having this information helps the company understand:
- Rate of growth of sales over time
- The average cost of a purchase
- Return on investment (ROI) per sales rep
How Does It Help?
From a quantitative research perspective, the organisation can identify the following:
- Find out the most productive salespeople.
- Find out what sells best.
- Find out what are the cheapest ways of acquiring customers.
What research types does this include?
- Market Research (understands target market, competitors, and industry)
- Financial Research (understands target market, competitors, and industry)
- Descriptive Research (answer questions about what, where, when, and how, but not why)
- Correlational Research (measures and assesses the relationship between two or more variables)
- Quasi-experimental Research (examines the impact of a program or intervention on outcomes)
Qualitative Business Research
Qualitative business research attempts to understand behaviour and experiences through the analysis of non-numerical data. This is usually employed in instances where the need to explore the causes of certain behaviours is at play. Here is how it works in a case scenario:
Let us assume that you work as a product manager for an online shopping application, whose main objective is to enhance the user experience and increase the interaction of users. You collect qualitative information on performance metrics such as:
- Employee Feedback
- Customer Feedback
- Case Studies
- Market Trends
Through the means of:
- Feedback sessions
- In-Depth interviews
- Focus groups
- Open-Ended Surveys
- Content Analysis
- Visual Methods
- Journals
How Does It Help?
Qualitative research enables the company to:
- Identifies the areas of the user experience that do not work well.
- Get the insight of the users and their intended use.
- Spot the issues that the users have and need to be worked on.
What are the research types it includes?
- Phenomenological Research (trying to understand the universal experience)
- Ground Theorotical Research (unravel the meanings of people’s interactions, social actions, and experiences)
- Ethnographical Research (studies social interactions and behaviors)
- Case study Research (used to examine an identifiable problem or investigate a group of people)
- Historical Research (examining evidence from the past to understand it and its impact on the present and future)
Examples of Business Research in Real-life
Business research plays a critical role in helping companies make informed decisions. Real-life instances support the importance of such findings by demonstrating how the performance and strategy can be positively impacted.
Example 1
Let us assume that a business that produces energy drinks has a question concerning the possibility of market expansion to the older age demographic. Whether the seniors will buy their product is uncertain, let alone what promotional activities they can devise to reach the older citizens.
A focus group can be created, and subjects can be queried on the hypotheses. The other option is thesauri, where literature about the particular industry and its major players will be sourced.
Example 2
Let us assume that a fashion e-commerce website wants to learn any difficult aspect of online shopping through its site. A customer satisfaction survey can be provided via a pop-up window and also ask if they can find what they are looking for and the ease of use of the site.
In this step, they should analyse the comments of the users and how people perceive the site to determine the additional features to add to achieve higher customer satisfaction.
Example 3
A retail clothing brand faces a situation where online sales are stagnant even with the rise in traffic. Web analytics show that the cart abandonment was primarily at the shipping costs level. The customer satisfaction survey also supports this finding.
The checkout process is then improved by reducing the number of steps, providing clear size charts, and offering free or low-cost transportation to encourage purchasing. These measures lead to higher customer satisfaction and an increase in the volume of online purchases.
Wrapping Up
No matter how big or small your company is, you may find change alarming. You can’t just go into unfamiliar waters blindly. Nevertheless, you cannot remain unchanged.
You should be aware of your customers’ habits and opinions to retain your current clientele and attract new ones. Asking them directly (through a survey, interview, etc.) or conducting your research and drawing conclusions are the best ways to go about doing this.
By incorporating business research into your decision-making, you gain valuable insights that can boost your company’s growth, efficiency, and competitiveness. Understanding your market and customers better will help you make smarter choices, adapt to changes, and stay ahead in a fast-paced business environment.
Frequently Asked Questions (FAQs)