Whenever you are about to embark on a major life decision or project, you will ask friends, family, or knowledgeable acquaintances their opinion. It can be very useful, but how much more helpful might it be to get the views of a broad cross-section of the public, who aren’t known to you personally? They would be less biased, less affected by your obvious enthusiasm and passion for the project, and less concerned with how the success or failure of your venture could personally affect them.
That is the nature of market research. It is an essential part of giving your start-up a chance of succeeding, and if it is already up and running, of taking it to the next level. Yet many entrepreneurs only do minimal market research before launching in with their product or service. This is undoubtedly a big part of why so many start-ups fail within their first six months.
The benefits of market research.
Market research lets you make an informed decision and gives you a bigger, more realistic perspective on the road ahead. Setting up a new business is always a leap into the unknown, so it makes sense to have as much data on your side as you can muster. Harvesting unbiased, objective opinions from across your target audience will help you to spot any flaws in your idea while there’s still time to fix them. By finding out as much as possible about your potential customers and clients, you can find out what informs their purchasing decisions, and so tailor your product and digital marketing strategy accordingly.
Creating a business plan.
A good business plan should be based on solid primary and secondary research. That will initially help you to understand the feasibility of the project and to create a better product that is more accurately tailored to your market. Market trends move fast, and your business plan needs to demonstrate a deep understanding of past, present, and future customer buying habits. Market research lends weight and validity to your business plan and will help you to get credit and attract investors. A pitch backed up by in-depth market research will be taken seriously, whereas one based on groundless speculation will be laughed out of the building.
Intelligence and analysis.
Because markets change and your business needs to grow, market research should be an ongoing process. Successful companies value intelligence above everything else, but the information is useless unless you know how to analyze it and act upon your findings. Alex Friedman is the co-founder and managing partner of Jackson Hole Economics, a private research organization that develops actionable market intelligence for policymakers. They understand the considerable value of both data gathering and how to can be used to craft economic policy for governments and businesses alike. The success of men like Friedman is a testament to the increasing value of market research in today’s data-driven world.
Primary and secondary research.
Primary research means going out and collecting unique data first-hand. Secondary research means seeking out and using analysis that is already available. Before undertaking your primary research, it’s worth finding out what information is already available that you can use. You may well still need to do your fundamental research, but at least you won’t be duplicating existing results.
Secondary research can include reading company reports, published studies and survey results, government data, and newspaper reports. A great deal of information is available online. Other sources can be found in public libraries, business groups, and trade associations.
Your start-up has to exist in the real world, and that means that you need to find out as much as possible about the real people you imagine buying your product or using your service. For the sake of convenience, let’s refer to them as customers. They are the most important factor in your success and will make or break you. No business can afford to take its customers for granted. You must adapt to serve them, not the other way around.
Your customers are complex individuals with real needs, fears, likes, and dislikes. They have jobs, families, interests, and social lives. Get to know them well, if only on paper. Learn to think about them in different contexts. What are they trying to achieve? What are their emotional needs? How do their needs and goals change in different situations?
Solving a problem.
Ultimately your product or service should create value by solving a problem. It might be a problem that your customers didn’t realize existed because they had never considered that an aspect of their lives could be made easier or more enjoyable. In many cases, you not only have to show how your product will solve a problem, but you also have to convince the customers that there is a problem to be addressed.
Market research lets you define the problem and tailor your product to solving it. It also enables you to customize your product and marketing to how the customer perceives the problem. It’s also essential to check out the competition. Has a product like yours existed before? If it failed, how can yours succeed? If it succeeded, how can your product improve upon it?
These are all questions that market research is designed to answer. By knowing your customers’ needs, you can create a successful product that has longevity and can adapt to a changing marketplace.