The competition isn’t the only thing that’s challenging for new startups. Being successful in the first place is already difficult enough, especially with so many failing within their first year of business.
Market research is one of the most important efforts you can make as a business in any capacity, especially when you’re starting out. Knowing who your audience is and what they want as well as the current state of the market that you’re in, is important to research.
It’s what will help you find gaps in the market for the product or services you’re offering. It can also give you the data you need to provide consumers with what they need so they convert from leads to paying customers.
In this quick and easy guide, you’ll get all the helpful advice you need to help conduct market research effectively. With the right approach to the research, you give your startup the best chance of succeeding and thriving where others failed.
What is market research?
Market research is the effort of gathering information about your target markets as a business. It helps discover information that you may not currently hold on your industry, the competitors that are in your market, and what type of customers are shopping for your products or services.
It’s a great way of helping build a business strategy to provide a sense of direction so that you’re delivering successfully to the market you’re in. There are a number of goals that come from market research such as securing investments, making business decisions, finding new business opportunities, and ultimately, avoiding failure for your business.
Market research isn’t just a key element of your business when you’re starting up but it remains a constant resource of information for all life stages of the company. Whilst it can be effective, it doesn’t always guarantee success so it’s important to not always take the data you collect as being the be-all and end-all.
How to conduct market research for your startup
There are many different ways in which you can conduct market research but we’ve selected some of the best steps for your startup that most tend to utilize. Hopefully, with this guide, you’ll be gathering market research that benefits your business ten-fold.
Study the types of market research
In 2019, Statista found that the global revenue for marketing research exceeded 73.4 billion U.S. dollars. That means a considerable amount of businesses around the world are investing in market research for their organization.
Where do you start? Well, firstly it’s important to study the types of market research that are available. These are; the primary or secondary market research and online versus offline research.
Primary or secondary market research makes up the two main categories of market research in general. The primary market research is the data you collect yourself or pay for an external organization to collect for you. The secondary is focused on data that’s already been collected and prepared by third parties – cutting out the effort on your part!
Thanks to the internet, you’ve also got the choice of online and offline research. This is self-explantory but some businesses may prefer to choose one over the other. We think the best research strategies for market research should include a mixture of both. After all, there are still plenty of customers that can be attracted offline, even if they have an online presence.
Whatever options you choose will determine how successful the research is. Try to find a balance between all of them where possible.
Set goals and outcomes for your market research
Market research will hopefully provide you with results that can benefit your company in more ways than one. However, without much direction or goal-setting, your research may end up lacking the important data you needed or having data that you don’t even need.
With that said, consider what goals and outcomes you want for your market research. After all, the activity of market research can be both costly and time-consuming, so you want it to be worthwhile. Look at what goals you have for your business and how that relates to the data required for those goals to be achieved.
Look at industry trends for market analysis
Whilst conducting market research, consider where your startup will exist and what the nature of your industry is. Industry trends are a critical part of your market research because it’s important for your business to fit the mold of what’s already being provided by other businesses.
By having a description of your organization, it will certainly help better your results when finding out who your startup is for. When it comes to creating products or services, looking at industry trends is going to help you understand who it’s being made for.
What many startups struggle with is creating a product or service that customers need and are lacking within the industry you’re in. Despite whether or not you’re offering something niche, there’s always a way of providing a better version than what’s already out there.
Tools for market analysis can be great for understanding the current trends and how this might influence your decision-making for new business opportunities and the creation of products or services.
Get nosey with your competitors
Do you know who your competitors are? Even if you’ve not entered the market yet, it’s important to be aware of who you’re going up against, especially those that have been kicking around for some time now.
Prepare a list of the competitors you’re aware of when you think about the market you’re going into and then do your research on these competitors. You may also want to do some digging for other organizations you may not have come across before.
When researching, look at their strengths and weaknesses. What makes them successful? Their weaknesses can easily become your strengths and you may even find gaps in the market that you can utilize to your own advantage.
There’s a lot of creative inspiration you can take from your competitors and just like your startup, those businesses all had to start where you were. They likely did the same thing!
Create an ideal customer profile
Unless you’ve got a product(s) or a service that every customer type will need, chances are you won’t make every person on the planet a potential customer.
There are those that may need your product or service at a certain point in their life, whereas others may find it as an alternative to what they’re already using. It’s important to spend some time understanding your ideal customer and creating a profile of that customer. You may have multiple customer profiles depending on who your products or services are useful for.
Business success can’t just rely on singular transactions, but instead, it should be about building a customer base of loyal customers that come back time and time again. Not only that, but they should be actively praising your business and sharing it through word-of-mouth.
If you don’t have a clear description of your target audience, then it’s important to focus your market research on this area for the most part. This data can really help ensure the right products or services are being created to meet the customer’s needs.
Your ideal customer profile should include things like their gender, location, age, occupation, income, etc. You can also find their interests and hobbies, which can further provide a more accurate picture of the customer. Remember though that your customer base may grow and change, so amending these profiles may be required.
Choose your methods of market research
There are many methods of market research that you can conduct to help gather more data. It’s up to you which methods you use, whether that’s a small section or a mixture of them all to trial and error which work best. Here are some of the ways in which you can conduct market research:
- Surveys/Feedback forms
- Interviews or focus groups
- Observe your customers in a physical or online setting.
- Interacting via social media and listening to users online.
The more methods you utilize, the better. Especially when it comes to the types of marketing research mentioned at the beginning of the article. Or you can leave it to the professionals and hire a fractional CMO for startups who will assist you every step of the way.
Utilize the market research tools that are out there
There are lots of market research tools that can be used when it comes to gathering data. Whilst market research can be utilized for understanding customer behaviors and industry trends, you can also get business analyst knowledge before hiring. Tools like TestGorilla are great for hiring the best talent that will hopefully help your startup thrive.
A lot of these market research tools are free to use or where they cost money, will tend to be a monthly subscription that’s as cheap as a cup of coffee.
Don’t skip on market research for your startup
Market research does require more effort than simply skipping this stage. However, it’s important to do so, otherwise, you may end up with gaps in your business knowledge when it comes to the market you’re operating in and its existing customer base. Data is powerful and effective market research can make the difference to a successful year in business or one that sees you closing up shop for good.
Author Bio: Natalie Redman (LinkedIn)
Freelance writer for many clients across multiple industries. Natalie has two years of copywriting experience. Natalie has a wide range of experience copywriting for web pages for businesses across many industries. She’s also an owner of two blog websites and a Youtube content creator.