August 17, 2017

How To Do Market Research

by Emma McGowan

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If you’re going to create a great product that people love — and maybe even pay for — then you have to know your customer. And the best way to get to know your customer? Market research.

Market research is essential for any company, from tiny startups to massive corporations, but you have to do it right for it to work.

How to do market research

So what does good market research look like?

What steps are involved? Well, it starts with an organized and thorough market research process.

1. Define Your Goals

The very first step to conducting great market research is defining your goals. What do you want to learn from this research? What questions are you answering? In order to get the most useful information, you’re going to want to develop defined research or a hypothesis in order to keep your team focused.

And once you have those questions and/or a hypothesis outlined, it’s a good idea to determine how much time and money (and whatever other resource you’re going to need to invest) you’re going to have to plan on putting toward them. Finally, you should determine who is going to meet those goals. Will you be taking them on personally, or is it something you can delegate?

2. Use Multiple Research Sources and Methods

There are two main kinds of market research: primary and secondary. Primary is information you or someone on your team gathers on your own. Think of interviews you or your staff conduct, polls you create, studies you fund or implement. Secondary research, on the other hand, is research that has already been conducted, either by other companies or research organizations.

Both primary and secondary research can be qualitative or quantitative. Qualitative research is the exploratory type of research. It’s usually interviews, focus groups, or other forms of research that really let you get to the base of an issue. It’s a great way to dig deeper on a topic and also to figure out what questions you should ask for your quantitative research.

Quantitative research is primarily numbers-based — it’s your hard data. It’s what you want to use if you’re trying to get information about a large group of people. (You can’t do in-depth interviews with them all, right?) Quantitative research usually takes the form of surveys, polls, or online polls — formats that translate more easily into numbers.

For the highest quality market research, you’re going to want to make sure your data includes both primary and secondary sources, as well as qualitative and quantitative research. It’s the best way to ensure that you’re covering the entire market. Also, be sure that any secondary sources you use are verifiable. You don’t want to build an entire study around data, only to find out that it’s been collected in a sketchy way or simply isn’t true.

3. Be Aware of All Your Resources

When it comes to market research, you have a lot of potential resources. Sure, direct interviews with customers (or potential customers) are great, but they’re not the one and only source you should be turning to. Some other resources to consider are: surveys, focus groups, government web sites, Google Analytics, libraries, colleges, trade associations, Chamber of Commerce, and census reports.

That’s a totally incomplete list, by the way. I’d recommend sitting down with your team and brainstorming all of the potential resources you could use for your market research. Once you have a long list, put them into categories based on what’s most important to you — Is it cost? Is it time taken? Is it number of staff members needed to completed? — and then decide which resources you’re going to utilize. The answer is going to be different for every company, but it’s always important to have a wide range of resources when you’re doing market research.

4. Organize and Analyze

Once you’ve collected your quantitative and qualitative data from primary and secondary sources, it’s time to get down to fun part (fun if you’re a nerd like me, that is): organizing and analyzing! Your first step is going to be reading everything in order to get a good top-down view of the information you’ve collected. Then, you need to determine if your data has proven your original hypothesis — or not.

One good way to start organizing is to create two simple columns: One for data that proves that your hypothesis (or answers your question, depending on which approach you took) and one for data that disproves your data (or negates your question).

Further analyzation of data will probably require you use some tools, which range in price from free to very expensive. On the free side of things, spreadsheets were literally created for this purpose! If there’s someone on your team who’s a spreadsheet whiz and can get everything organized nicely, you’re in luck — they’re a huge asset.

On the more expensive side of things, you can purchase software that helps you analyze qualitative data. It’s called computer assisted qualitative data analysis software and it’s a good purchase if you have a lot of qualitative data to analyze, but less cost-effective if you have just an interview or two to look at. If that’s the case, check out Qiqqa, which will help you keep PDF research organized.

5. Make an Action Plan

At the end of the market research process, you’ll ideally have a massive pile of well organized, well-analyzed data. But it doesn’t stop there! That lovely file full of spreadsheets and thoroughly analyzed data isn’t worth anything if you don’t make an action plan.

The results of your market research might show you that you need to do more work in a certain area or even gather more information before moving forward. Or they might bring up completely new market research questions that you didn’t even consider the first time around. If that’s the case, then you’ll need to repeat the market research steps until you’ve satisfactorily answered your questions or proved or negated your hypotheses.

If you go into this step totally agnostically and make sure you’re not married to your solution, your market research can lead you to creating a great product. It’s going to take time, but think of it as less time spent now so that you don’t waste a lot of time later.

Common Market Research Mistakes

1. Thinking market research is too expensive for your company.

Sure, market research can be expensive. There’s no doubt about that. But it’s also possible to conduct market research on a bootstrapped budget. Before writing it off as too expensive for your small company or startup, do some brainstorming. Instead of a formal focus group, you could go show your app to people at local coffee shops — for the price of a coffee. Instead of hiring someone to comb through massive databases, you could use free resources like Google, your local library, or your Chamber of Commerce.

But then, of course, don’t write off paying at least some money for professional market research help. Just remember that it doesn’t have to be all one or the other: You can find the balance that best suits your company.

2. Going in without a clear goal.

Don’t skip step one of conducting market research! If you go into the process without clear goals, you’ll have no path to follow and no idea when you’ve done enough. Having a clear goal — or goals — is essential to conducting good, effective, useful market research. Those goals might shift during the process, sure, but you need to make sure you have them all the way through.

3. Using only secondary sources.

Remember, there are two types of market research: primary and secondary. Primary research is research you conduct yourself, while secondary is market research that other organizations or companies have conducted that are applicable to your company. It can be tempting to focus on secondary research because it’s faster and, oftentimes, cheaper.

But when you do that, you’re relying on market research that has been conducted for a different company or a different purpose. In contrast, your own research conducted for your own company for your own purposes can be tailored specifically for you. Don’t skip out on primary research because it’s too hard or too expensive. You definitely need it.

4. Talking only to people you know.

When you’re conducting that primary research, make sure you don’t fall into the common market research mistake of talking only to people you know. Sure, your family might be a great resource — they’re available and they will do anything for you — but they might not be honest with their feedback. Also, are they even your target market?

The same goes for your best friends or your coworkers or even your networking group. In order to conduct great primary research, you have to be willing to push outside your comfort zone and speak to people who have nothing invested in you and your company. Do some brainstorming around where the type of people who you want to be your customers can be found — and then go there. Maybe it’s a coffee shop. Maybe it’s a different networking group. Maybe it’s a reddit thread. Wherever it is, that’s where you need to be.

5. Relying solely on the internet for market research sources.

The internet is an amazing source of vast resources — but it’s not the only one out there. And it’s also not always the best one out there. If you rely on the internet for all of your market research, you’re missing out on all the other potential sources of information out there. You also might find yourself paying more money that you planned once you hit paywalls for some of the more in-depth data that you’re trying to get access to. Instead, check out your library or a university in your town for free, excellent sources. Do a little digging. It will be worth it.

6. Dismissing points of view that you don’t like.

As you’re conducting your research, you’ll probably find points of view that go against your hypothesis — or even flat out say that what you’re doing simply won’t work. Your ego might want to push those ideas aside as “resistant” or even just as straight up haters. Don’t let it! Those points of view are where you can learn the most. The best information comes from the challenges to your assumptions and beliefs, so instead of dismissing that market research, examine it more closely. That’s exactly the kind of information your company needs to succeed.

7. Conducting market research on the wrong group of people.

By now you know that it’s important to conduct primary research, but as important is conducting primary research on the right group of people. All the well thought out questions in the world aren’t going to do any good at all if you’re asking the wrong people. So, make sure that you spend the time before going out and doing your interviews and focus groups to determine who you should be speaking with.

This is where that secondary research comes in: It’s a great way to determine who your market might be. And remember, if your research uncovers the fact that the group you thought was your target market actually isn’t, that’s valuable too.

8. Not including the competition.

Your market doesn’t just include your customers — it also includes your competition. A common market research mistake is forgetting to dig up as much information as you can on the competitive market. Who are they? What are they doing? How much do they earn? Who are their customers? You can learn a lot of valuable information by researching your competition, so make sure they’re included in your market research.

9. Writing and asking leading questions.

If you’re conducting primary market research on your own, it’s important to make sure that you’re not leading your respondents to the water. That means you need to be careful to write questions that are open ended and don’t encourage people to answer one way or another. Leading questions will get you one type of answer — and you want every answer, not just the ones that fit your hypothesis.

Market research is an important step for any company or startup that’s trying to catch their stride in their industry. When done properly, it can give you a great perspective on your clientele and push your company forward. But when done improperly, it can be a massive waste of time and money. Follow these steps — and avoid these pitfalls — and you should be on the right track to great market research.

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