The Importance of Market Research for Contractors
As a contractor, you’re focused on providing exceptional service that keeps customers coming back for years to come.
Your business needs a steady stream of new clients to thrive, too, but attracting fresh prospects can be a daunting challenge.
Let’s dive in and go over the importance of market research and how it helps you identify a target audience that’s seeking the products and services your company provides.
What Is Market Research?
Conducting market research is one of the most vital things you can do to help your contracting business succeed.
Market research provides valuable insights into your target audience’s decision-making habits, buying patterns, pain points, and much more.
You can use different types of market research, such as surveys and social media analytics, to learn which services clients are looking for and develop new products to meet your target audience’s needs.
You’ll also learn about:
- Market trends in your industry
- How customers perceive your business compared to competitors
- Opinions on pricing
- Biggest impacts on buying decisions
- Where customers get their purchase-making information
- Data points to guide your business strategy
What Is a Target Audience?
A target audience is a specific group of people who are most likely to buy your contracting company’s services.
This group usually starts as a broad category, such as women or men, that can be further segmented by age, profession, hobbies, income, and other data points.
Here’s where the importance of market research comes into play. Quality market research helps you identify common segmentation factors, including:
- Demographic: Demographic data involves data points that large groups of people share, such as gender, age, education, profession, income, location, and marital status.
- Geographic: Does your target market live in a rural area, suburban neighborhood, or major city? Your marketing plan may differ depending on where customers live.
- Behavioral: This category groups people by purchasing actions such as spending habits, customer loyalty, and reaction to price changes.
- Psychographic: Psychographic segmentation groups customers by what motivates them to buy your products and services. Influencing factors include customer values, interests, opinions, and needs.
Target audiences consist of decision-makers and supporters.
Decision makers are the people who make buying choices, while supporters have a strong influence on whether a product or service is purchased.
Be sure to consider both audiences when crafting your company’s marketing strategy.
Target Audience Example
Use the information you’ve gathered to create a customer profile or buyer persona. Here’s an example of what a customer profile might look like:
- Age: Late 40s
- Occupation: Welder
- Earns $60,000 per year
- Married with two children
- Lives in a suburban area
- Considering moving to the countryside in the next five years
- Loyal to contractors who performed quality work in the past
- Willing to spend money on premium services and products
- Interested in urban farming
- Prefers organic food
How to Find Your Target Audience
To get started, it can be helpful to review information about your company’s past and current customers.
During this review, ask yourself what these customers have in common. For example, are most of them homeowners? Are they married or single? Do they have children?
Other questions to consider include:
- How much purchasing power does this customer have?
- What are their interests and hobbies?
- What is their primary language?
- In which time zone do they live?
- What are their challenges, and how can your business solve them?
If you don’t know the answer to some of these questions, consider surveying or interviewing customers and people your business wants to serve.
Focus groups are a smart option if you’d like to interview a group of people at the same time. To encourage participation, offer a small incentive, such as a gift card or coupon that they can use at your business.
You can also monitor social media for mentions of your company, industry, and customer pain points. Your competitors can yield helpful information, too. Check out their websites to see what kind of customers they serve.
In the research stage, it’s useful to filter out groups of people, called negative buyer personas, that your business doesn’t want to serve.
Negative buyer personas might include:
- Customers who are needy or difficult to work with
- Customers who don’t fit the financial profile of the groups you’re trying to target
- Customers who have a low likelihood of using your company’s services in the future
With your target customers identified, you’ll be prepared to custom-tailor a marketing strategy that speaks directly to your audience’s wants and needs.
Keep in mind that you can still advertise to other groups of people, but you’ll want to focus on marketing to your target audience for the best return on investment.
What to Include in a Market Survey
A market survey is a smart way to gather in-depth data from your customer base to identify your target audience.
To get started, ask participants a few questions to identify their challenges, goals, and responsibilities.
Next, a good market survey should follow along with three stages of the buyer’s journey: awareness, consideration, and decision. Here are some questions to ask for each category:
- How did you know that this contracting business could help you?
- What challenges were you facing when you first realized you needed contractor services?
- Are you familiar with the different options when selecting a contractor?
- How did you research potential solutions to your problem?
- Which sources of information did you find most useful?
- If you interacted with the sales team from any contractors, how helpful were they?
- Which factors were most influential when making your buying decision?
- How did you compare contractors?
- Did anyone else help you make a purchasing decision, and if so, what role did they play?
Get Insights on Your Market
Now that you know the importance of market research, you’re ready to find the target audience for your business.
Contact Contractor Growth Network or call at (980) 449-4384. We’ll help you identify your ideal customer with a custom marketing strategy and help get your company started on the road to marketing success.