Have you ever wondered how to do market research? You’ve got this great idea for an app or a piece of software but you have no idea whether other people will use it. Or maybe you are simply looking for ideas on what business idea to pursue.
Whether you’re an app developer or you are planning on building a company, market research is key. I’ve compiled the data you need to make your next big decision.
Interviews allow for face-to-face discussions (in-person and virtual) so you can allow for a natural flow or conversation and watch your interviewee’s body language while doing so.
Focus groups provide you with a handful of carefully-selected people that you can have test out your product, watch a demo, provide feedback, and/or answer specific questions.
Product/Service Use Research
Product or service use research offers insight into how and why your audience uses your product or service, and specific features of that item. This type of market research also gives you an idea of the product or service’s usability for your target audience.
Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX, what roadblocks they hit, and which aspects of it could be easier for them to use and apply.
Buyer Persona Research
Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, what they need from your business and brand, and more.
Market Segmentation Research
Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics — this way, you can determine effective ways to meet their needs, understand their pain points and expectations, learn about their goals, and more.
Pricing research gives you an idea of what similar products or services in your market sell for, what your target audience expects to pay — and is willing to pay — for whatever it is you sell, and what’s a fair price for you to list your product or service at. All of this information will help you define your pricing strategy.
Competitive analyses are valuable because they give you a deep understanding of the competition in your market and industry. You can learn about what’s doing well in your industry, what your target audience is already going for in terms of products like yours, which of your competitors should you work to keep up with and surpass, and how you can clearly separate yourself from the competition.
Customer Satisfaction and Loyalty Research
Customer satisfaction and loyalty research give you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g. loyalty programs, rewards, remarkable customer service). This research will help you discover the most-effective ways to promote delight among your customers.
Brand Awareness Research
Brand awareness research tells you about what your target audience knows about and recognizes from your brand. It tells you about the associations your audience members make when they think about your business and what they believe you’re all about.
Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. It requires experimentation and then a deep dive into what reached and resonated with your audience so you can keep those elements in mind for your future campaigns and hone in on the aspects of what you do that matters most to those people.
Now that you know about the categories and types of market research, let’s review how you can conduct your market research.
Here’s how to do market research step-by-step.
Software Market Research Key Factors For Success
- Start market research even before you start building production code. Especially in startups driven by technologists, the tendency is to start with an idea driven by technical capability or need–which can be great. But it’s really important to conduct at least some initial validation in your target market before you go to far–this can really help reduce the possibility of a “false start”.
- Feel free to use existing products as a benchmark in this early research, unless you’re truly building something revolutionary. In the cases of revolutionary technology discussed prior to prototypes, comparisons with existing products can be difficult for potential users to understand.
- Early on, define your target market as tightly as possible. This will help you conduct research with the RIGHT people–wasting a minimum of time and increasing your odds of early market success.
- Get to know the market size, price sensitivity, technological competence, etc. and other attributes of your target market early on. This will help frame your early research discussions with prospects.
- Within the target market you have defined, strive to speak with a diversity of customers types within that market–defined by various geographic locations, company sizes, typical market adoption stages, etc.
- There is a tendency for most folks to focus on big customers. They mean more and their feedback should be weighted accordingly; but you in most cases you still need understand the full market diversity to maximize your overall return.
- This may be the most important point of all. You absolutely MUST eliminate your own biases–good market research is a search for the truth. It’s human nature (and a big danger) to use research activities to validate the ideas you already think are great. The ability to separate personal feelings and beliefs from marketplace needs is a key skill of great product planners/managers.
- Great market research isn’t just a function of adding up the “whats”; what is usually most important to understand the “whys”. Customers often cannot rationalize future technological possibilities with what they need today or their true long-term pain points, so they will often just ask for features/improvements relative to current products. In fact, customers often don’t even realize, or at least can’t elaborate their long-term pain points, as they’re often too busy just trying to keep their heads above water–which leads to short term thinking. This does vary greatly by their psychographic market adoption profile( early adopter, late adopter, etc.), however. So it’s REALLY important to know and understand who you’re talking to. Because of this the big payoff is in actually understanding their business and biggest problems, then using this insight in combination with technology to bring to the customer a great leap forward. If you understand the “whys” you’ll be far ahead of the of the majority of researchers who never get past the “whats”.
- Who should conduct the research can be a controversial topic in some companies. Professional Product Management should take the lead in most cases (if you have them), but it can be very helpful to include the software developers as well. Including the developers in early research can help get their buy-in on the results (which is a contentious activity in many software companies), but they can also add real value to the research by asking questions from a different viewpoint than the marketing folks.
- In some places there is controversy about the particular techniques used, whether to use quantitative methods such as surveys, formal qualitative methods such as focus groups, or informal meetings with prospects and customers. This is a longer discussion and the “right” answer depends on many factors such as budget, market size, technological complexity and much more. In most cases I lean toward informal customer meetings as my primary method in a software business. But the key thing to remember is whether quantitative or qualitative, formal or informal, always be OBJECTIVE.
- Lastly , if at all possible don’t set a “hard” end date for the research. Especially when using informal methods, the path to “truth” is sometimes long and includes several forks in the road. It’s important to continue until you’re comfortable that you’ve got results you can bet on.
A lot of people are excited to get into the startup world, but it can be hard knowing where to start. One of the best ways to get started is by conducting market research. This includes some common steps you should take when doing market research for your startup idea. It’s important to make sure your new business is viable, and market research is an essential tool in determining whether your new venture will be successful.