How likely is it that your startup won’t make it in the long run?
Though some sources say about 90% of startups fail,
Not sure where to start with this process? We’ve put together the ultimate guide to market research in 2018.
What is Market Research?
Before you can perform effective market research, it’s essential to really understand what it is and why it’s so important.
Market research consists of evaluating external data to help you position your product or service in the marketplace. It helps you scope out the competition and see what customers are responding to in your market.
It’s research that is performed to help you really understand whether or not your product is competitive and ready for the market.
Market research is vital, not only to new enterprises, but also any company that is launching a new product or service, or trying to figure out why one of their initiatives fell flat.
Why and When Should You Perform Market Research?
Market research serves many different purposes.
First, it’s done to mitigate risk. If you want to move forward with a business idea, but you haven’t shared it with your ideal customers, you won’t have an objective view of whether your idea is likely to succeed.
Market research helps you get to know your customers and what they value. It’s also a good way to identify problems in a business that’s more mature, or break into new markets. Finally, market research can help you set realistic goals.
Many people think that market research is only helpful during the planning phase of starting a business, but the truth is that it’s an important step in many different stages of business development.
Because market research is so important for understanding your audience, it’s something that should be done on a regular basis, whether that means regular reevaluation or simply soliciting customer feedback on a continuous basis.
There are several different research methods that can be used at different stages of business growth, making the process much more manageable and less intimidating.
4 Segments of Market Intelligence
Effective market research doesn’t come from just one source. You need to understand different segments of the market to get a comprehensive view of your position within it.
With this in mind, there are 4 cornerstones of effective market intelligence you should be looking at. These are:
- Competitor Intelligence – What can you find out about your competitors? What are they doing that’s working? What isn’t helping them grow and stay competitive? Gaining competitor intelligence doesn’t mean spying or getting information using unethical means. There are lots of ways to learn more about the competition ethically and establish your own unique angle.
- Product Intelligence – Is your product ready for launch? Are there problems with it that will prevent customers from wanting to buy?
- Market Understanding – How is your product going to perform in the market? Will customers respond well to it? Are there other competing products? What makes yours stand
- Customer Understanding – Knowing your customers wants and needs is key for effective marketing initiatives and building loyalty. Who are your ideal customers? Where do they spend time online? What are they looking for in a product or service? What problem can you solve for them?
Methods of Market Research
Though comprehensive market research involves using the 4 cornerstones, you won’t always focus on them equally. Different approaches to market research can be taken at different times, depending on what stage of growth your business is in.
Here are some of the most important methods of market research you can use to get the information you need.
Creating customer profiles and soliciting feedback
Before you launch your product or service, understanding your target market fully is essential to tracking their buyer’s journey and creating effective marketing campaigns. During the research process, it’s helpful to create buyer personas—profiles of your ideal customers.
From this, you can then find statistical data on that audience, create surveys, and solicit reviews to see how that ideal buyer is likely to respond.
Researching and analyzing competitor success
Some companies will have more public information than others, especially when it comes to financial information. However, it’s not necessary to know exactly how much money the competition is making in order to gain helpful market intelligence.
Social media mentions and engagement, looking through reviews, and
Understanding your positioning in the market
If you want to develop or improve on your product, you need to use both the strategies of customer feedback and competition analysis in your market research.
Using customer feedback and data, comparing your product to others on the market, and understanding what your competitors are doing is all important for bringing a product to market.
You’ll need to know what problems your product or service can solve that no other product is addressing, and you’ll need to know your audience better than they know themselves.
Large companies are drowning in data, but market research doesn’t just involve internal data. Startups will be at a disadvantage when it comes to internal data, but the playing field becomes more level in securing external data.
Using reputable sources and collecting your own primary data is key—never trust data that comes from an undetermined or questionable source.
Finding reliable sources you can gain insight from isn’t always easy, but there are several different places to collect data:
- Google analytics
- Social media sites (both for internal data and competition analysis)
- Surveys and focus groups
- Government sites and resources
- Authority websites (research groups, universities etc.)
- Reviews and interviews
As you can see, some of these methods can be as simple as performing a database search. Others will require you to find representatives of your target market and solicit feedback. A combination approach to gathering data will give you the most comprehensive information.
Planning and Conducting Your Research
Now that you understand the importance of market research, where do you start? How you plan and conduct your research will depend largely on what your goals are.
If you’re trying to gain feedback on refining a product, you’ll conduct surveys, focus groups, and other feedback-driven market research methods.
If you’re just starting out, you’ll also need to do competitive analysis and gain a thorough understanding of your audience.
Start with your goals, then decide which techniques for collecting data will be the most helpful in achieving those goals. Document your sources for everything and keep detailed notes. Flawed research can have devastating consequences for businesses.
Using Automation and Customer-Driven Feedback
Conducting market research can end up being a lot of work—but it doesn’t always have to be. In 2018, gaining valuable insights is easier than ever, thanks to new automation solutions and customer-driven feedback.
Automation can involve something as simple as setting up Google Alerts that let you know when your competitors are mentioned, or scheduling surveys to go out to customers at predetermined times.
Some companies are even offering more comprehensive software to make market research even easier. In 2018, automation can take over a lot of the grunt work.
In some industries, such as healthcare, organizations are taking automation a step further, and are beginning to encourage patients to conduct their own market research. Patients want to be in control of their health, especially now that more information than ever is available.
One way organizations are soliciting this is by offering direct access testing, allowing patients to control which tests they order. Direct access testing was a $33.1 million business in 2015, and is growing quickly.
Health care providers, insurance companies and pharmaceutical companies benefit from these on-demand methods by gaining unbiased opinions on what patients like—and what they don’t.
Consumer-driven market research like this could eventually help businesses in a variety of industries adapt to the needs of the market and automate market research.
Leveraging Market Research
Using the information you gain through market research can be more difficult than it sounds, but the first thing to remember is that your assumptions have no place in analytics. You could run your entire business off assumptions, but then you wouldn’t need market research at all. Set aside any assumptions you have and let the data tell the story. Then, use that data to answer questions you have about your business, and even solve problems you may be having.
More Data, More Insights
Making ongoing market research efforts a part of your business culture can be a great way to fight off stagnation and promote growth. The good news is that once you know how to perform market research and set up automated data collection, the process becomes easier.
You’ll have more customers you can survey, more content to analyze, and sales numbers to evaluate. Your internal data will become more valuable, and you’ll be able to leverage it to give your organization a competitive edge.
With all the options for data collection and analysis, market research has the potential to be overwhelming in 2018. However, the powerful automation tools businesses now have can also mean that it’s more effective—and necessary—than ever.