How to do market research

Failure to do market research during product development is like driving blindfolded. Your company needs to know which direction to travel in.

Market research would be alot easier if we could read our customer’s minds. Sadly, most of us lack psychic powers, but alas, there are numerous ways to skin a cat. However the type of data your company will need and your budget, will determine which methods you choose.

In this post, we will break down each method and guide you on how to tackle these with ease.

Why should you do market research?

If your business is conscious of a high costs of failure, then you will need to gather research if your new product will be successful. With good market research, you can determine if any new opportunities exist, how to position the product or service, or what consumers’ opinions are after its been launched. Good market research is a great way to see if you are meeting current customer’s needs and expectations.

Surveys:

With accurate and straightforward questions, you can get accurate results from your sample group. The larger your sample group, the more reliable your results will be.
In-person interviews – held in high traffic areas (such as malls) usually have a good response rate.

Telephone surveys – although due to general resistance to telemarketing, your results could be as little as 50-65%.

Mail surveys – inexpensive and can reach a nice broad audience. Despite the low response rate of 3-10%, they will remain a cost effective research tool.

Online surveys – depending on how it is performed and the control over the sample group, these surveys could produce unreliable data. In saying that, they are a simple and inexpensive method used by many businesses these days.

Focus Groups:

With an experienced moderator with scripted unbiased questions, focus groups can get good balanced results. Sessions should take place in a neutral location, and lasting around one to two hours.

One-on-one interviews:

Personal interviews, like focus groups, need neutral and open-ended questions. Due to time it takes, it may mean you don’t get a good representation of a large enough segment of your market. Nevertheless, focus groups and interviews can obtain some valuable insights into customer attitudes and uncover issues related to products that can be useful in future development.

Common Mistakes:

New business owners often are strapped for time and money and sometimes take short cuts. Here are 3 of the most common pitfalls.

A: only using secondary research. Relying on published statistics can be great place to start, but can be outdated.

B: Website information. You will get information that is available to everyone and may not be accurate. Try using your local library.

C: Surveying only people you know. To get the most useful and accurate information, real customers and the public, are the best to find about their needs and expectations.

Once you have your results, you can use these to create a business or marketing plan or to measure any current plans or progress. This is why it’s so important to make sure you ask the right questions to the correct people, because if the research is done poorly, it could lead in the wrong direction.

Now you can use this research to build a website that can create leads and possibly passive income. Read my article on what it costs to start a website.