How to conduct a reliable market research for your start-up
By Reka Esther, December 2016
There are many ways to conduct market research and entrepreneurs could use a variety of resources. This process could be confusing and overwhelming by endless information. It's not easy to decide what information relevant to your case, and how to reach out such crucial information.
Research resources can include research studies, books and articles, governmental information, company records, interviews, surveys, questionnaires, focus groups and social media; all can identify the critical information you need. In conducting your market research, you will gather two types of data:
- Information that comes directly from the source: these sources are in most of the cases your current and potential customers, industry experts. You can gather this information via surveys, questioners or focus groups.
- Data that exploits existing resources: statistics, reports, studies and other data from relevant organizations, government information service, trade associations, chamber of commerce and so on.
Before you start the research, it's quite important to set up clear goals for the market research activity. You need to make sure you have defined what you need to know and why. Start-ups need to obtain information to their particular, unique business and very well described consumers they hope to attract.
Once you have written down your goals in a short brief, developed your strategy by selecting research techniques you will use, you are ready to the "data journey".
The main goal of the interviews is to reach out original information in respond to a specific question or set of questions. This information is normally gathered through questioners, surveys, observation, experimentation, personal or phone interviews. Here you have to be very open-minded and adaptable because some of the feedback you hear may not be exactly what you were expecting and hoping for. Most of the entrepreneurs feel so attached to their business idea and hard for them to change anything about it. But this attitude can lead to one of the most common start-up failures. Always remember: what is important is how your costumers think and want not what you wish them to think or want. This type of research will give you perfect knowledge about your audience; you can also specifically target desired groups and help to answer specific questions. Choose to conduct survey through mail if you need short answers and by phone or in person if you need deeper insights about:
- Customer profiles
- Consumer tastes, needs, expectation and complaints
- Factors influence the buying decisions
- Price they ready to pay
- What they think about you, and about your competitors
- Advantages and disadvantages of your competitors
Social media is a great platform to gain feedback since almost everyone has an account. Social media and online tools are great to discover customer insights because they are generally free, quick and easy to use.
Ask a question at a time or give people a link to your survey online. Search for relevant social network groups or forums and asks experts. You can consider giving presents or free services for people who take the time to do it but you will be surprised how many of them willing to help for free. People like to answer questions. They like to contribute from their knowledge.
Many people make mistakes by asking only people they know. It’s unlikely to produce real results that determine how profitable your start-up is since your friends and family might don't want to hurt you.
These days, entrepreneurs can do most of their market research without ever leaving their computers, thanks to the internet. It's also less expensive.
There are many market research companies conduct research across the globe. A market analysis from these firms is very expensive, but they also often publish short samples of the huge reports. You can learn a lot from it about:
- Market size of national or international markets
- Market segmentation - by products type and services, and by geographic regions
- Trends that are influencing your industry
- Consumer preferences
- Technological shifts
- Demographic characteristics of customers - age groups, income levels
- Key industry players. Reports contain the name of the industry leaders. Then is your job to find them one-by-one and understand how they define themselves, what they advantages and disadvantages.
It's also very helpful to look for statistical data from official statistics providers and other organizations. Google as many keywords just crosses your mind about your business and your product. Read relevant articles, books, case studies don't miss any business news. Subscribe for latest industry updates, blogs, follow industry leaders. E-commerce channels also could be an effective place for the check-up since there is a huge pool of products and internet sells can point out of certain customer behaviour. Use Google-power tools for your research:
- Google Translate helps you to get more familiar with international markets. Local trends and tastes, cultures differences are necessary to understand if you want to attract foreign markets.
- Google Trends you can find out trending topics on Google Search. Use this tool to understand what your target audience is searching for online. Analysing this information can bring insights about your customers.
- Google AdWords also a great insight into customer’s buying and search habits.
Market research is invaluable for start-ups. It is crucial that you finalize market research to validate that the problem you try to resolve is really important and you have the best solution for it. You need to be sure that you offer a unique value proposition to customers, and can maintain a competitive advantage. You need to approve that your business model is compatible. In order to attract investors to fund any start-ups you need: a wide research based market overview and a proven go-to-market plan.