Everyone these days have a business or aspiring to have their own. The earlier the better, but it is never too late. It is always better to get started today than tomorrow because someone who is starting today does not need get worried about what will happen tomorrow because this day is enough for them to start their jobs and earn money. Of course, jobs do not come easily and to succeed in what they are going to do, one should really work hard and give a hundred percent of his effort. However, there is a specific way on how you can conduct a market research for a startup, and if your ways are not correct, the chance of succeeding in your job becomes lesser.
You are about to start your business and need to do some market research before launching it. You might be confused with the success of other startups look up to. I have got some tips for you that may help you out to conduct a market research for your startup.
Study types of market research
Researching the market can be key in improving your product/service and overall business strategy. Choosing the right research approach can make a difference when setting your revenue targets.
Let’s review some types of market research based on your business goals.
Primary or secondary market research?
Roughly speaking, market research can be divided into two main categories — primary and secondary. They are sometimes also called field and desk research correspondingly.
Primary market research encompasses any information you collect yourself (or a person/organization you pay). It is about analyzing current sales volumes, metrics, and customers. It also takes into account the effectiveness of current business operations and the competition.
Secondary research is focused on data already prepared by third parties. It often includes reports and studies from other companies, government organizations, and other entities engaged in the industry.
Online versus offline research
Both offline and online research methodologies have their advantages, but the best market research strategies use a mix of both. That way, different types of information about your target market will be unveiled. Offline analysis provides access to primary sources of information and yields more in-depth results. The advantage of the online method is the possibility to get data inexpensively and fast.
Compare your competitors
You need to know your competition to continue analyzing the market conditions. Prepare a list of the main competitors in your segment. Outline their strengths and weaknesses. Once you’ve identified those, you’ll be able to use the information to map the advantages and market position of your startup.
As an additional step, it will also be useful to determine who your direct and indirect competitors are. Direct opponents belong to the same price segment of goods/services, have similar target audiences and products, promotion and distribution channels. The key audience of indirect competitors is similar to yours, but the product/service is distinctly different. There may also be differences in pricing strategy, promotion, and distribution pipeline.
After the main opponents have been identified, continue with defining the key features of your product. Try to answer the question of what makes them unique and why potential clients would choose your product.
Choose your market research method/methods
According to the type of data collection, the following market research methods can be distinguished:
- Surveys — A method of gathering information through questioning the target audience. Surveys are tremendously versatile and the most commonly used, thanks to the range of possible question formats and options.
Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research, surveys proved to be the most commonly used market research technique.
What makes online surveys so popular? They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.
- Interviews — This market research method is more personal, it helps delve into the matter more deeply and allows for extensive communication and clarification.
Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.
Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.
What makes interviews so insightful?
By speaking directly with an ideal customer, you’ll gain greater empathy for their experience, and you can follow insightful threads that can produce plenty of ‘Aha!’ moments.
- Focus groups — This usually involves a group of people in a room discussing a given topic. There is also an organizer, who controls the discussion according to the checklist questions, who tries to gain some insights from it. This is a simple concept but it can be hard to conduct effectively. In focus groups, a moderator uses a scripted series of questions or topics to lead a discussion among a group of people. These sessions take place at neutral locations, usually at facilities with videotaping equipment and an observation room with one-way mirrors. A focus group usually lasts one to two hours, and it takes at least three groups to get balanced results.
Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, and/or marketing message to gain deeper insights.
What makes focus groups so dangerous?
If you’re new to market research, I wouldn’t recommend starting with focus groups. Doing it right is expensive, and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.
- Social media listening — This method is especially useful, because of the immense amount of information available on social media. You can be sure that such information reflects exactly what a person cares about, since it’s unfiltered and spontaneous.
- Observation — This research method has a great reputation. It is about observing representatives of the target audience in their natural environment (for example, video recording in a shop).
During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).
What makes observation so clever and powerful?
‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation is no replacement for customer surveys and interviews.
Most startup owners focus on one or more research options. Here, the choice of a method will depend on your budget and time resources.
Advantages of lean market research
Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new features.
Lean market research can help you become more…
- Efficient : it gets you closer to your customers, faster.
- Cost-effective : no need to hire an expensive marketing firm to get things started.
- Competitive : quick, powerful insights can place your products on the cutting edge.
When should you use market research?
There are certain times in a company’s life-cycle when market research can be particularly useful. For example:
- To see whether a new business idea is viable
You have an idea for a new business. Is there a market for it? Don’t just guess – use market research to find out. - When moving into new markets
This is especially true when selling abroad. Different countries and cultures have different markets. What works in one might not work in another. Research will help you uncover the differences and adapt to them. - Before launching a new product or service
You might think you have the perfect new product or service – your customers may think otherwise. It pays to get feedback before you launch, so you can make any necessary changes quickly. - When applying for funding
Show potential investors that there’s a gap in the market – and that your company is the one to fill it.
Conclusion
Market research helps in knowing in depth about the factors which are directly or indirectly in connection with the product. Here, in this article we present an introductory guide on how to conduct a market research which is very helpful for startups.