Knowing how to conduct market research enables marketers to create new products, features, and pricing that speak directly to the needs of their customers.
Sadly, most of us lack psychic powers. But we do have market research.
We mere mortals need a way to learn about what our audience wants, how we can earn their business, and how we can maintain or improve loyalty to our brand over time.
This is the domain of market research, a skill that can be intimidating to non-researchers, but one that needs to be part of every marketer’s toolkit.
There are just three phases to a market research project, and this guide will help you tackle all three with gusto. These phases are:
- Collect Data
- Analyze (and Act)
In this post, we break down each phase into multiple steps. Once you get these right, it will be almost as good as being psychic.
Phase 1: Planning for Market Research
To get the best results, start your market research project with a plan. Ask yourself these questions about your products and services:
Is there a need for this product in the market?
Make sure that you are in the right market for your business. If you live in Anchorage, it’s not likely that you would want to start a business selling outdoor swimming pools.
Do my products meet specific market needs?
Think about the general needs that you perceive in your target market, then ask yourself if and how you meet them. Think about what you are doing now and what you could do.
Culturally, healthy eating is popular, but there are multiple different types of diets. If you plan to open a restaurant, are you going to offer healthy options as well as options for those on restrictive diets?
Is my pricing fair and competitive?
Pricing is one of the largest factors in why consumers may leave you for the competition, so keep an eye on both your prices and that of your competitors.
While you want to maximize your profit per unit sold, to maintain regular business, you need to be aware of what your competitors are doing and stay competitive.
Decide What Data You’re Looking for in Your Market Research Study
By analyzing your answers to the above questions, you can come up with a good platform from which to start your research.
The goal is to have an idea of what you can change and make a plan of how to do so.
For example, a specific market need could be gluten-free dinner options. Currently, you have one, but wonder if you should expand your menu to include a wider variety.
Your plan is to survey people with Celiac’s disease and gluten intolerance to see what options they would be most interested in adding to your menu.
By establishing exactly what data you’re looking for, you’ll be able to keep your study on-target.
Form a Research Hypothesis
Just like having a basic understanding of your market is beneficial to your research, so to is having a hypothesis to inform what you think the results will be. But, be prepared to be surprised!
Before you begin the research phase, you should have dedicated some time to thinking about how you expect it to go. The true outcome may vary greatly but you will be a better position to analyze your data and make effective changes if you go into it with some plan of attack.
Phase 2: Collecting Market Research Data
Now, on to the meat of your market research project: going out and getting responses!
There are two ways that you will want to approach the data collection process:
Quantitative research is the mathematical approach and should be used heavily in your process. Quantitative question types like radio buttons, checkboxes, and Likert scales are easy to measure and compare.
While the data can be a bit general, quantitative research methods allow you to identify broad trends within the data that you can act on.
Google Analytics is another example of quantitative research that can support or inform your market research surveys. Here, you can look at where your leads are coming from, how long people are staying on your pages or maybe where they are leaving your page. This can give you an idea of what to fix to bring people through the sales funnel.
Qualitative research, on the other hand, asks for more detail. The most common examples are open text question types where respondents put their answers in their own words.
This type of research is usually used in conjunction with quantitative question types as this data is more difficult to analyze, but provides specific examples and deep insights.
For example, you can use Google Analytics as quantitative data showing how potential customers are reaching your page. To find out why those referrals are more effective than others, use qualitative research.
Surveys, focus groups, user testing, and face-to-face interviews are prime examples of qualitative research and can provide you with answers that are actionable while opening a window into behavior patterns.
The Two (Main) Types of Market Research
Once you have a plan and hypothesis, it’s time to determine the type of research you need. There are two broad types of market research that you will want to focus on.
Primary research involves conducting your own research about products and services that you plan to offer.
Secondary research looks at published data and can be used to create benchmarks and understand the competition.
While there is no set order to gathering your data, I find that conducting secondary research first can help give you the background information that will allow you to create a more targeted primary research project that produces better data.
How to Conduct Secondary Market Research for Your Business
When conducting secondary research, keep your plan and project goals at the top of your mind. It’s easy to fall down a rabbit hole of data and become overwhelmed. Maintaining focus on your pre-established goals will keep you and your market research surveys on target.
Step one is to determine your questions.
Do you need to learn more about the market to help determine your target demographics? Are you hoping to learn more about the competition and how they operate? Do you understand consumer preferences and how they’ll play into your business model?
Next, you’ll need to figure out what kind of information you need to answer your questions. Definining what data you need will keep you on track during your research and help you sift through the mountains of data.
Ask yourself what would be most beneficial to you: statistical data such as annual reports and financial records, or location-specific data and consumer information.
Once you know what questions you need answered have an idea of the information that will best answer them, you are ready to start the research.
We suggest the following resources for successful secondary research:
- Public sources such as libraries and government departments
- Banks and other financial institutions
- Educational institutions such as universities and technical institutes
- Online periodicals and industry studies (try searching in Google Scholar)
How to Conduct Primary Market Research
Once you’ve completed your secondary research and have a solid understanding of your particular market, your target demographics, and the competition, you’ll want to get started on your primary research.
Your primary research will get more in-depth about the particulars of your business, products, and location. The questions you ask will be specific for your situation but often the questions include:
- Which factors do consumers consider when making a purchase?
- What do they like/dislike about our current products?
- Where could this product improve?
- What is a fair price for this product?
Collecting Responses for Primary Market Research Surveys
There are a number of ways to get answers to these questions, however, when in the primary research stage, you want to make sure that you are collecting information from specific segments of people. Use qualifying questions to ensure that your sample meets your demographics are a great way to make sure that your data is practical and actionable. This can involve offering incentives to respondents.
Tapping into Focus Groups for Market Research
If you would like specific answers to how a product could be improved upon, a focus group is a great option.
Focus groups may require the largest incentive but are a great way to get direct feedback on a product. This involves bringing a small group of people together and having them sample your product. Afterwards you’ll ask them specific questions to gather feedback.
Using Surveys and Questionnaires for Market Research
For overarching questions, such as, “what factors do you consider when purchasing?” a survey or questionnaire is a great way to get the opinions of a larger group of people. These can be created online and require less of an incentive as the respondent can take them at their leisure.
If your business is more service oriented, you will still want to explore all of these options, but what may benefit you the most is direct interviews. These can be done face-to-face or over the phone and can focus primarily on getting feedback about the performance of the service.
Phase 3: Analyzing and Acting on Your Market Research Data
The most important aspect of market research is, of course, acting on it. All of the research and data in the world can’t help your business is you don’t put it into action!
In order to thrive, you must be agile and willing to address any faults that your research uncovers. While you may not be able to change everything immediately, you can make incremental improvements that will add up.
How to Accurately Analyze Market Research Survey Data
Throughout the steps taken during research, your quantitative studies should have pointed you in the direction of any areas of weakness. Now you’ll turn your eye on the qualitative research to learn how to fix the problem.
By studying Google Analytics, maybe you found the page where people are most often leaving your site. Having acknowledged the problem, you got direct feedback on where and why and are now ready to fix the issue.
Or while developing a menu, your team discussed the idea of introducing healthy options to please the more conscientious eaters. Using a survey, you polled your market and found that 40% of people said they are concerned about their health and would like to see a menu that reflects this growing trend.
Acting on Your Market Research Findings
Collecting all of this information without acting on it is time wasted, right? Take a look at the feedback you are given and come up with solutions.
If you’re not the sole proprietor, this could involve having your team get together to come up with ways to address any issues or weaknesses. During brainstorming sessions, write every single idea down. Slowly whittle them away until you are left with tangible solutions to established problems.
If you’ve discovered that there is a page where people seem to be falling off in masses. Your qualitative research should give you an idea of why they’re leaving that page and how to improve that experience.
For example, is there something distracting them and causing them to lose focus? Is the contact form a bit too invasive and scaring people away? Fortunately, in the online world, you can use split testing to try out multiple solutions at once to find a winner.
For the restaurateur, data showed that a huge segment of your market is interested in eating healthy but that they are also economical when it comes to eating out. Through your secondary research, you found that the competition is making a killing by offering seasonal salads that are both healthy and cost effective. What do you do? Adapt accordingly.
The More You Conduct Market Research, The Easier It Gets
It’s easy to look at the market research process and think to yourself that it’s too much work. “How can I overwhelm myself with all of this research when my business is losing money?” you say with your head in your hands.
Sit down, drink a glass of water and remind yourself why you got into business in the first place. Now ask yourself if that business is worth the energy required to make it successful.
Hopefully the answer to that is yes.
And happily, it does get easier. Each time you conduct research, you’re becoming more and more familiar with the market. It won’t happen overnight but soon you’ll have a good enough understanding of your audience that you’ll be providing the studies that newer businesses are looking to during their secondary research.