Even to the most experienced entrepreneurs and largest firms, market research can be a daunting process. There are weeks and weeks of work, mountains of data, and lots of interpretive work to be done. All of this can drive many companies to skip a step here or there in order to save time and resources. However, a small skipped step can kill a product or service after a few strides down the road. In order to prevent these mistakes, let's take a look at how to properly conduct market research, gather data and apply that data to grow our businesses.
Pinpoint Your Potential
Market research begins by confirming your idea, and who better to do that than your potential customers. In today's hyper-connected world, our customers are often only a click or two away. However, random tweets and Facebook inquiries will likely reveal nothing. In fact, taking a spontaneous approach to this section of the research could leave us more confused or uncertain than we were before. Like all aspects of our business, our methods of contact must be thoroughly planned and vetted.
If you know your demographic, your next step is beginning to gather information.
Be a Purveyor of the Survey
Surveys are effective with all ages, but where you place them is crucial. In today's fast-paced world, mail surveys have become slightly less useful, whereas email and social media are becoming the primary hubs for getting useful responses. To create an effective survey:
- Keep it short. Time your own survey and structure your questions around the most pressing and relevant issues.
- Refine your questions. Make a list of the goals of your survey, and work backward from there when making your questions. If the questions aren't phrased well, the answers will not be particularly useful.
- Use optimal timing. Study the peak hours for social media use and email responses within your demographic, and try to launch it within these parameters. The timing of getting eyeballs on your survey can make a big difference.
Get Face to Face
To understand your customers, it's important to actually go out and interact with them. While electronic interaction can make it easier to connect with customers regardless of location, some of the greatest insight can come from face-to-face interaction.
Conducting in-depth interviews or focus groups will show you the real people with real problems your product or company aspires to solve. Asking open-ended questions in these scenarios are particularly important because they encourage your potential customers to speak their minds and share their real opinions.
The Secondary Step
Beyond interacting directly with your customers, there are numerous ways to collect secondary data on your market that will allow you to analyze larger patterns. Several different tools are available to help you gather secondary data, including:
- Web tools – There are several websites and databases that can assist you in gathering information about the market you'll be entering. Sizeup, for example, is one such app that will allow you to view competitor and customer distribution.
- Trade associations – The trade association within your potential industry can guide you towards essential statistics and figures. These publications will also indicate potential trends to be aware of.
- Government guides – The data from the U.S. Census Bureau can be any entrepreneur's best friend. These reports are localized statistics and geographical breakdowns that can help guide your product positioning.
Research Rules All
Pinpointing the potential value of your new product must be your first step. Before diving into an expensive mess of R&D projects and spending your hard-earned dollars on an initial prototype, website, etc., we must confirm first that the idea for our product or service is both unique and valuable. These strategies aren't the only ways to gain knowledge about your idea, but they are proven and should be a good place to start.
And remember, don't feel disappointed should your research reveal that your product or service is not needed or not yet ready for the marketplace. Throwing out a bad idea prevents you from wasting time and money on an ineffective launch. Believe me, there's nothing more frustrating than investing years into a launch, only to have that product or service fail upon arrival. We're proud to have helped numerous clients avoid that kind of frustration. Do your market research, and you can avoid the pitfalls of launching a failing product as well.
Al Eidson is the owner of Eidson & Partners, a business and marketing strategy consultancy, and a founder of SparkLabKC, an early-stage startup accelerator program in Kansas City. He's an expert in taking products to market and has launched more than 220 new products and ventures through his career. He's also proud of killing off a great many problematic products before they hit the market. His vision involves meaningful and lasting products through innovation.