A successful business will have a close understanding of its customers, so market research will be a crucial part of your sales and marketing strategy.
An understanding of your customers will, when done well, give you an edge over your competitors. It will help you grow your customer base, understand them better, identify new opportunities and help you develop the right products to meet the needs of customers.
Debrah Harding, deputy director general of the Market Research Society (MRS) agrees that it is essential for a business owner to question their customers' needs.
"It is absolutely vital for a business to do customer research," she says. "If you want a business to grow and seek out opportunities, discover gaps in the market and plan effective campaigns, then you have to do it. It will help you maximise profits and enable growth."
To start the process there are sources of information open to the public that you should access. You can get a picture of current market trends using information such as government statistics, market reports and your own contacts.
You can find economic trends and any forthcoming legislation on the National Statistics Online website, read about your industry on the trade association's site and read overviews of sectors on the UK Trade and Investment website.
Market reports are available from publishers such as KeyNote, Euromonitor, Mintel, Datamonitor and from The Economist Intelligence Unit (EIU).
It's also useful to see what your competitors are up to. What new products are they developing? How do they advertise and promote themselves?
Then there is there is customer research. Many ways and means of questioning people are open to you, and the information you collect can be compiled in different ways.
There are two types of research: qualitative and quantitative.
With quantitative research you compile numbers, such as '50% of people did this' or '3,000 people answered no'. It provides statistical information.
On the other hand, qualitative research helps you develop a certain type of understanding, towards people's feelings and conceptions of your product and service.
There are many ways of conducting your research and which one you use depends on the time you have and how in-depth you want the exercise to be.
Surveys use a fixed set of questions. Often face-to-face interviews are the most effective, but you could also do it over the phone or by post.
Discussion groups are useful to find out what people think and can yield a lot of qualitative data. If your subjects are in a small focus group you can explore their attitudes and opinions.
Observation research involves looking at what people do rather than what they say. You could engineer a scenario in a particular place and then see how people, say shoppers or customers, react when they pass.
Or you could set up an experiment. Giant companies like Coca Cola and Pepsi put their faith in blind taste tests for example - a useful kind of exercise if you want to pit your product against your competitor's.
When you've decided on what method to use to collect data you need to work out how - i.e., the logistics of the research.
What will your budget be and how long will it take? Design the research carefully. If you're doing a survey, what will you ask? If it's a focus group, where will it be held?
If you want to carry out street interviews, make sure your researchers have the required local authority licence and identity card.
Once you undertake the research, find out as much as you can about your existing and potential customers. This covers their gender, occupation, income, lifestyle, attitudes and social class. When speaking to existing customers, ascertain what they buy from you, what they need from you, their opinions on your prices, what they expect from your service and how they think you could improve it.
When it comes to potential customers, you need to find out who they are, what groups they fall into, how many there are, the criteria on which they base their buying decisions, when and where they like to buy and what would drive them to buy from you.
It's worth considering at length whether you have the time, skills or experience to undertake a research project. If you feel you may be overwhelmed by the task there are market research agencies and freelancers who could do it for you.
It could be more cost-effective in the long run to outsource the job. A professional is more likely to get better results. And when they're dealing with your customers they'll find it easier to be impartial about your business. Also, customers will find it easier to be honest to an outsider and won't worry that the survey will lead to you trying to sell them something.
Debrah Harding certainly believes that hiring an expert is always the better option.
"I think to do research most effectively you must hire a professional, in the same way you would hire an accountant you must hire a researcher.
"You can employ one on your staff or an outside worker. There is a website run by the MRS, www.rbg.org.uk, where all the companies listed are accredited by MRS, so they know the ethics of research."
As well as searching the MRS database there are other ways of finding a good agency, such as asking contacts for recommendations.
Before you hire an agency, investigate its reputation and previous work. Check it has expertise in the areas suitable for what you want, and get a clear understanding of its fees and services.
Finally, make sure that you give the agency a thorough and lucid brief. This will include the objectives of the research, what you're hoping to uncover and how you're going to use the results.