So you've discovered your "Why" and you have a crystal clear idea of what niche you're in.
Ready to sign up for Squarespace website to start building your website and running ads?
Not so fast young padawan.
Which demographic is your ideal client?
How much are you going to charge?
Will this new product even be profitable?
Before you invest a bunch of time, money, and hope into your new idea, you'd better do some digging to see whether your genius idea is even worth pursuing.
Enter... Market Research.
In this article, I'm going to show you how I do exploratory research into a new market. This is where I spend the majority of my time when developing a new idea of a product.
"Give me six hours to chop down a tree, and I will spend the first four sharpening the axe." - Abraham Lincoln
If you nail this step, everything else starts dropping like dominos.
What Is Market Research?
If you've met anyone through Tinder or Bumble before, you've done market research.
Pre-Covid, if you matched with someone on Tinder, you wouldn't just go willy-nilly to meet them for a drink halfway across town.
What if they wanted to wear your skin as a jumpsuit?
Or even worse, what if they were a Trump supporter?
Every able-bodied person would set aside a good hour or so to start digging for some dirt.
Whether out of curiosity or fear, it doesn't take long to go deep into their Instagram feed (making extra sure not to double-tap on any 1year old photos).
This my friend, is market research.
You're looking for:
You're looking for commonalities while also simultaneously looking for reasons why to ghost them.
Believe it or not, the best market researchers are the Bumble dates who ask you how you're doing after your dumb college ex took your cat and whether your new hamster, Fizzy, fills that void.
Now how does this relate in the business world?
Market research is the process of gathering information about the people you want to sell to so you can figure out how profitable and successful your product or service would be.
What Does Market Research Tell You?
Market research tells you a large number of things, but here is a list of the most important things to find answers to:
The key is to discover actionable insight from your target customer through this market research process.
Types Of Market Research
1. Interviews
Conducting interviews online is a great idea. You can observe your interviewee's body language, as well as engage in the conversation (via instant messaging or voice mail), much like if they were face-to-face. Interviews can be done over the phone, via webcam, or in-person. This is my favorite way to do market research.
2. Focus Groups
Focus groups are an outdated way for brands to test and adjust their product. The focus group members don't even have to pay attention! A better option is to replicate the real-time feedback that your customers give you when they use and buy your product online.
3. Product/ Service Use Research
Developing effective product or service research involves understanding how and why your audience uses your specific item. By adding in usability testing, you can expose the true appeals your customers find with your product or service. This kind of market research also provides an idea of how your customers perceive the item's feature set and what features are likely to be used most frequently.
4. Observation-Based Research
If you're already close to your target audience, you can use an observational approach in an effort to understand their usage patterns and how they go about using your product or service. Seeing what works well and what doesn't will help you make changes for the optimal experience.
5. Ideal Avatar
Buyer persona research gives you a realistic look at who makes up your target audience and what their challenges and problems are. It also gives you access to the specific issues that they will have with your business or brand, as well as the reasons behind each of their needs.
6. Market Segmentation Research
Market segmentation is the process of clearly defining a group of people based on shared characteristics; therefore, understanding their needs, expectations, and goals.
7. Pricing Analysis
Pricing research is a crucial aspect of selling any product or service. By figuring out the market average, you can avoid the situation where customers are feeling ripped off by their prices. The best way to figure out what people charge for various products and services is to look at your competitors.
8. Competitive Analysis
Competitive analysis provides a valuable understanding of your industry. It can serve as a valuable resource in order to assess the competition, understand what your target audience is already shopping for, identify which brands you want to successfully compete with and surpass, and give you the ability to clearly differentiate yourself from competitors.
9. Customer Satisfaction and Loyalty Research
Customer satisfaction has become one of the most important indicators of a business' success in recent years. Research into your loyal customers will help you create delightful experiences for new and existing customers. This data will give you insight into how to specifically promote loyalty among your target audience.
10. Historical Experience
As a marketer, I know that learning how to target the right people in the right places for your campaigns and products provides you with an incredible edge. Knowing what brought your previous customers to you is like having a detailed street map for navigating your marketing efforts.
How To Do Market Research
What Is Your Objective?
What is the purpose of doing this research? An easy way to find the answer to this is to look at your company's current challenges or at a problem you faced in the past.
But first, you must define what you want to find out - which is an important step to solving a marketing research problem. Then create the goal of answering that specific question for your business. For example, you might define a marketing research objective like, "We need to know where our clients are getting the best value for their money so we know what the expectation is for the value we provide vs. the price we charge.
Who Is Your Ideal Client?
Before you plan your strategy, understand who is buying from you. Buyer personas - sometimes referred to as market personas - are fictional, generalized representations of your ideal customers. They help you visualize your audience, streamline your communications, and inform strategy.
The main characteristics you need to think about when defining your ideal client are:
The idea is to use your audience members as a guide for how to reach and learn from your real audience. You can even include people outside the industry you plan on targeting. For instance, a jewelry brand can relate itself very well to the persona of a wife who wants something to celebrate her husband's birthday.
My favorite way to conduct primary research and gather information on business owners is digging through Linkedin. Linkedin is a gold mine for data collection because it allows you to go deep into specific research on your ideal client with most of the variables discussed above. I have several research methods where I use Linkedin as a data source instead of a social media tool, but it’s too time-consuming to review in this article.
Prepare Research Questions For Your Market Research Participants
One of the most important things to remember when you're conducting market research with people is to prepare well thought out customer surveys that will help you understand what they want, why they want it, what they’ve tried before, and what is keeping them from getting the result they want.
I don’t believe this is something you can outsource. YOU (the owner) need to know your ideal client’s most intimate goals and desires. You just can’t script out how the conversation will go word for word. Genuine curiosity is the secret ingredient to success at this stage. Most businesses send questionnaires out to their target clients. However, my favorite market research tool is doing phone surveys with Zoom.
A BONUS tip is to record the conversation (with their permission). You will use their EXACT words in future marketing (ads, landing page copy, offers, etc). You can take these conversations and create a sales funnel that will help make it easier for customers to make purchases because you are using the words you hear directly from them. If you’ve ever bought something because you just KNEW the person selling it understood your pain or what you wanted, then you’ve just experienced the end result of a very effective market research campaign.
Sample Market Research Survey Template
Here is a sample script for you to help you ask the right questions during your market research interview:
Rapport And Background (5 Minutes)
Take few minutes to learn about them. Instead of just asking some general questions, ask some to show how curious you are about them as a person and as a customer.
Discovery (10 Minutes)
Now that you’ve found a connection, get clear on what transformation they want.
What are their motivations, goals, and the key benefits to why they are there, what makes them decide to spend their time and energy trying to solve this problem?
What's left out of their journey?
Where do they need help to get what they want?
How would their life change if they solved this problem or got this transformation?
What solutions are out there that they are aware of to help them get what they want?
Competitor Research (10 Minutes)
Once you get clear on what solutions (your competitors) your target market is aware of it’s time to go deep.
Get very specific about where and how someone researched your competitors.
How helpful was the research they did?
Do you remember the first thing you did? Where did you go to find more information? If they don't come up organically, ask about search engines, websites visited, people they got advice from, Facebook groups.
Make sure to list out all these competitors for secondary market research where you go deep into your competitors, what they offer, their price points, and EVEN sign up to their webinars and email lists to see the funnels they have set up. This is a very in-depth qualitative research that we'll go over at another time.
Tools such as Hubspot and various Hubspot alternatives can help with this step.
Result (5 minutes)
Finally, what was the final result? Were they happy? Would they recommend this to other people? Did they get the transformation they wanted? What did they LOVE about this solution? What was missing that would make it a no brainer to rank it a 10/10?
Wrap It Up
Make sure you're closing out your conversation in the right way.
How would the IDEAL process/experience differ from what they experienced? What would the right price point/transformation look like?
Let them know how much you appreciated their time. Here’s the most important question: Ask them WHO ELSE they know that have the same problem as them and ask to be introduced. This is huge to get personal introductions to other people that might be your ideal client.
Summarize Your Findings
Now that you're armed with this market research data, it's time to gather this customer feedback to prepare for an in-depth competitive analysis. Gather all your primary market research and identify BIGGEST common pain points and market trends.
What can you do to improve or add to it so it does?
If you find something that matches all their pain points, you have a winning product that will be hard to beat.
In addition, you'll have taken into account valuable insight on even the smallest of details that your competitors are ignoring or gloss over.
Last Updated on October 19, 2022 by Hanson Cheng