Eric Brandenburg, UK manager of market research firm Market, discusses how unbiased research can reveal a new product’s qualities to a market.
Every entrepreneur tests their business idea on their family and friends, measuring their reactions and gathering information they believe relevant.
Although it can provide new ideas and concerns that haven’t been considered before, it’s important to understand who these reviews are coming from — they’ll be prejudiced! The facts will be far from relevant or valuable due to an entrepreneur’s enthusiasm and love for their business idea and their connection to those they are asking.
Looking at the bigger picture
To move any company idea forward, it is necessary to demonstrate, using trustworthy data that the idea is required or needed by the target market. Conducting primary research with biassed people will not help you launch your product or service.
Furthermore, any business plan exclusively dependent on data derived from skewed primary research would almost surely fail. Despite this, many entrepreneurs conduct only rudimentary market research.
When embarking on any company initiative, whether it’s establishing a new business idea or creating a new service, an entrepreneur must be realistic: will it succeed? The key to market research is obtaining perspective and being well-informed, allowing optimal decision-making. Every entrepreneur understands that launching a business is a leap into the unknown. As a result, it’s critical to arm your company with as much data and knowledge about your target market as possible.
“An entrepreneur must be realistic: will the business succeed?”
It may be difficult to put into reality, but being objective with any company plan – and completing market research – is one of the best ways to ensure its success.
How can I conduct market research for my new business?
First, determine what type of market research will provide you with the required information. You have access to both primary and secondary sources — more on that moment. Examine your budget and whether your selected research method(s) is/are feasible.
Then there’s the market research. You can hire an expert to perform it for you or do it yourself if you’re on a tight budget. Whichever option you choose, make sure you’re clear about your questions and who you’ll ask.
Consider how you’ll manage and process the data after you’ve collected it. When you do this correctly, your research data will be current and relevant when your product or service hits the market. Then comes the fun part: analyzing the results and devising marketing initiatives based on the research.
Market research: primary vs. secondary
It’s critical to collect feedback from a diverse target market. They will not only be forthright with their opinions, but they will also point out flaws that a biased audience could miss.
Conducting primary market research is an opportunity that no entrepreneur should pass up; it allows you to get inside a customer’s mind and understand their purchasing decisions. When considering primary market research, consider the following:
- Individual interviews
- Product testing
- Group discussions
Remember that there are more modern methods for gathering quick data, such as Twitter and Instagram polls or testing Facebook ads.
Entrepreneurs can receive the most up-to-date information about consumer desires and needs by doing primary research with unbiased panelists, allowing them to change their product or service accordingly and gain a competitive advantage.
For startups and entrepreneurs, objective market research provides numerous advantages. Unbiased perspectives, reliable data, valid outcomes, and factual figures are the most important.
When it comes to obtaining loans, startups face several challenges. Some of these can be removed with primary research.
An entrepreneur’s chances of obtaining funding increase considerably after conducting initial market research and refining and finalizing an idea into a business plan.
It will appear as a smaller risk to an investor if you offer them your core market research findings that underlie a company strategy and showcase the possibility for success.
Primary market research can provide unbiased information that can help an entrepreneur create a product and service that will suit the needs of their customers.
When a product or service meets a need or wants in the target market, the business plan pitch becomes much more valid and reliable, which is one reason that will continue to attract investors.
Secondary market research will provide some context for your market, including the success of past products or services and the purchasing habits of your target market. Think:
- Surveys conducted by other businesses
- Other business or professional research
Conducting such research can provide entrepreneurs with an overview of where they should conduct the additional study, indicating gaps in current data and areas that require further inquiry.
Although it is critical to understand historical client purchasing habits, it is equally critical to understand current and prospective habits. Markets and trends move quickly, with items and services coming in and out of favor in a matter of days, becoming the latest craze and then swiftly becoming old news. Secondary research can provide a larger insight into your target client base or industry, while primary research should be your primary goal.
What is the price of market research?
It varies, and you have some control over the final cost of your market research.
You can hire an outside agency to conduct your market research, but you’ll need to budget more time than if you did it yourself because they may be working with other clients or performing a complete job. Before you send out your survey, have it reviewed by a marketing agency to ensure that the phrasing is neutral and complies with all legal standards.
ExpertMarket.co.uk estimates that you’re looking at:
- A professional survey costs between £750 and $1,000, depending on the number of participants.
- For a 60-90 minute session, focus groups will cost between £500 and £700. Telephone interviews will cost roughly £35 apiece.
- For a day on the field, face-to-face interviews cost roughly £1,500.
If you choose an agency, look at their previous work to see if they’re a good fit, and if they are, make sure you provide them a clear brief with deadlines. According to Marketing Donut, your sample size should be at least 10% of your client base.
As previously stated, doing it yourself saves money, but it may also save you time and money regarding how you conduct, analyze, and present your research.
The length of time it takes to do market research is determined by the size of your sample and the type of market research you’re conducting. When you’re finished, save a copy of your results and methodology so that individuals who are curious about how you conducted your study can learn more.
How frequently should I conduct market research?
Just because your product has a market does not imply you should stop there. People’s attitudes and ideas are always shifting. Your next market research opportunity could present itself when you’re working on a new product or service, want to improve your current offering, or want to examine how people react.
This will most likely determine how frequently you conduct market research. If you want to undertake more research for less money, you can build on current templates.
Flawless App’s CMO and co-founder, Liza Dziuba, reveals how the company conducted its market research.
IWe spent three months, in the beginning, learning about our target users and market.
We chose to talk to potential users when we originally had a startup idea. Based on our early assumptions, we created a hypothetical consumer persona, often known as an ideal client profile.
It mirrored our knowledge of our consumers’ needs, the specific problem we’d be fixing, and the decision-making process. We began speaking with various technology developers, designers, and product managers.
“We decided to talk to potential users when we originally had a startup idea.”
To begin, we compiled a set of questions for our target audience and distributed them using Google Forms and Typeform as a simple survey.
We went to industry gatherings and chatted with people whenever possible. We looked at rival public feedback and asked questions in relevant online communities, including Slack groups, subreddits, and industry forums. These in-depth research methods assisted us in comprehending the wants of our potential clients. We could sketch out the product plan with essential features at that stage.
Understanding potential customers aren’t enough for moving forward with a business plan; you also need to be aware of your competitors.
It’s crucial to understand the landscape of competitors and major industry players and their pricing and marketing strategies.
Some of them were discovered through conversations with users. We meticulously collected and analyzed all available internet material, including websites, blogs, news releases, social media accounts, press interviews, marketing campaigns, and website traffic. We also put competitors’ items to the test to see their advantages and disadvantages.
Our market research included reading industry reports as well. It indicated the size of the market, the total number of consumers, and how much money they spend on competitors’ products.
We developed our unique selling point and differentiated ourselves from the competition thanks to the research.
Research is not as simple as it appears; it takes a lot of time and work to collect all of the data, and it usually necessitates interviewing skills. Entrepreneurs frequently fall prey to their own biases by neglecting consumer demands and market analysis.
Consultant says market research is beneficial.
For entrepreneurs who want to improve their company’s performance, asking clients what they want from it can be very advantageous.’
According to Simon Lidington, chief exchanger of independent consultants’ group the Insight Exchange, effective market research can be “indispensable” to businesses.
‘The ideal people to question are consumers and customers if you want to know how to increase the saleability of your product or service, or how to improve customer pleasure or experience,’ he stated.
According to Lidlington, who was also vice-president of the Market Research Society (MRS), small businesses can benefit from larger companies, which have a dedicated research section.
He went on to say that customer suggestions can lead to innovation and understanding.