Do you ever feel like you don’t know enough about your clients? You’re good at building dream homes, you have successful relationships with previous homeowners you’ve worked with – but you’re at a loss about what your client base really wants from your business.
If you can’t understand your potential clients’ buying behavior, you can’t influence any of their decisions.
You can change that through market research, though.
When you prioritize your knowledge of an ever-changing market, you’ll be able to strengthen your already existing client relationships, all while conducting research to scale your growing business. Read on to get a crash course on market research in the construction industry.
What is market research?
Market research is when a construction business gathers information about a client’s needs and preferences. By collecting hard data, market research allows businesses to choose the best marketing strategies and evaluate its offerings and services to best fit the needs of the client, and, ultimately, make the best profit.
The market research process allows companies to have a solid understanding of all the factors involved in influencing the decisions of their target audience. A foundational aspect of market research is about learning the ins and outs of potential clients’ behavior.
You’ll not only gain an in-depth familiarity with your clients’ behaviors, but also learn about your industry, economic trends and competitors.
Why is market research important?
For the construction industry, market research is more important than ever. Without this data, the information construction companies will use to move forward is based on guesswork – assumptions, compromised data sets and inaccurate explanations.
Market research provides three key benefits to business owners:
Dive into customer and business behaviors
Through the collection of market data, companies analyze both homeowner and business behaviors, allowing them to gear up with the latest technologies, innovative materials, competitive landscapes and industry regulations. As a result, businesses can minimize costs and maximize returns.
Get access to customers and stakeholders
Interviewing and other market research techniques provide access to important people, like contractors, facility managers, vendors and stakeholders. This helps when making major and well-crafted decisions on projects.
Reduce the risk of failure
With the right data sets, construction companies can deliver products and services accurately and quickly to their clientele. In turn, this will make your business more successful and reduce the risk of failure.
How to do market research for your construction company
You’re at a great starting point if you want to learn how to conduct market research effectively. However, we’d advise against attempting to research the market without any direction. If you want your data to be solid and useable, you need to conduct market research with confidence.
Here’s a step-by-step guide to the market research process.
1. Define your goals
What’s my definition of success? What exactly am I trying to learn from my target audience?
Consider addressing these questions, or simply identify your goal for conducting market research. And then create a realistic plan on how to achieve it.
That’s what many marketers do: Conduct research with the end in mind. Maybe the goal is to increase sales, generate traffic to a website or accelerate their referral process.
Setting goals gives you a sense of direction from early on. Here are some common market research goals.
Product development and studies
Gauging the responses for new product features from a target audience is essential for success. This gives developers crucial data to work from when creating new offerings of a product. As a builder, you might conduct market research to see if it’s worth diversifying your offerings in a certain niche.
The idea of this goal is to get a solid grasp of what potential clients think of your competitors. Get ahead of the competition by understanding how your clientele responds to other construction companies.
Profiling and segmentation
By understanding pain points, needs and other essential factors about potential clients, companies can create buyer personas. These buyer personas help develop marketing strategies and sales pitches, all of which tell the stories and services of your construction company.
A practical option is to learn what the market thinks about your business before creating advertising campaigns. Before you spend all the big bucks on a fancy commercial, learn who your audience is and what they’re looking for.
2. Define your target audience
Truth be told, not everyone is your ideal client. And that’s okay! If you present your offer to a generic crowd, you’ll be taking a less effective approach. For all you know, the people in this crowd may not be qualified or even have the slightest interest in what you offer.
The better you understand your clients, the greater your chances for business growth.
Another set of words for identifying your target audience is target market research. This is a process that can determine your company’s potential clients and paint a clear picture of their identities.
Here are some questions you can ask to help you in this stage:
- “What is their age and gender?”
- “What is their budget?”
- “What is their average income?”
- “What is their occupation?”
- “What kind of home are they looking for?”
- “What kind of build would fit their lifestyle?”
3. Decide what data you need
There are many types of market research and data collection methods, so it shouldn’t surprise you that there are different kinds of data, as well.
Once you’ve identified your goals and target audience, it’s time to decide the data you need.
Here are the common types of data from market research.
Primary data refers to direct-from-source information. This includes qualitative and quantitative market research (open-ended and closed-ended questioning), as well as syndicated market research (research performed exclusively for distribution in exchange for a fee).
Obtaining primary data takes time. It’s also more precise and exploratory. And ultimately, it brings about conclusive results.
Primary data collection methods include surveys, focus groups and interviews.
The purpose of secondary data is to add to primary or existing data. Usually, obtaining secondary data is a strategic move to strengthen and verify the credibility of sources.
That’s why the information collected through secondary market research is often free, easily obtainable and publicly available.
Consider approaching this from a creative angle, too. Homebuilders, for example, can access residential construction data by joining a home builder’s association.
4. Analyze your market research findings
Once you’ve gathered data, you’re open to a world of amazing possibilities.
There’s a sea of things you can do with data. You can combine your findings, form trends, create models and design interactive dashboards.
The best course of action? Be mindful of some basics in data collection. Start by determining external and data sources and selecting a strategic direction for analysis, like a SWOT or five forces analysis.
5. Share actionable insights after conducting market research
The emphasis on this step is the word actionable. One way to identify these insights is through a report.
Knowing how to create a report allows for better decision making in the market research process. Reports are essential for decision-making, development of skills and creating progress.
Importantly, reports help keep your company neutral and unbiased, helping you to make future decisions based on facts and data.
If you don’t know how to create a report properly and effectively, start by wrapping your head around the technicalities. Then find a way to master how to communicate technical information.
Use data visualization
Data may seem daunting, but you just have to break it down, make it fun and show as many visual assets as possible. Turn your findings into something that can be clearly understood through visual elements.
Picture yourself as the person you’re speaking with and communicate with them as you see fit. Put yourself in their shoes when figuring out the best way to share your findings.
Mention relatable situations
Determine the technical data or tools the target audience is familiar with. Then use them as points of reference and present analogies to compare them with your proposed subject.
Market research made easy
Without a doubt, market research can reward construction companies with a well of useful data. But it’s not a quick process – it requires an adequate time investment.
If you speed up the process, it can result in mistakes, half-baked responses and inaccurate information. But if you’re willing to make the necessary time investment, there’s a great chance of success.
Whether it’s client information, easier access to documents and photos, streamlined communications or effective project management solutions, using Buildertrend for your market research projects – and subsequent builds – will keep you on the right track. Schedule a demo today to level up your business and meet your clients’ needs.