Honest answers please, product marketers: Is your strategy molded by the view of the customer? If not, maybe it’s time to reconsider your tact, and whilst you’re at it, incorporate market research into your practice - trust us, it’ll make your life a hell of a lot easier.
Giving customers what they want, when they need it, is pivotal to achieving short and long-term goals. But given we don’t have a crystal ball or a genie in a bottle, embrace non-fantastical means of data collection to gain the information you’ll need to keep your market happy.
What better alternative than trusty, old-fashioned, market research?
Unsure what it is? No drama - we have the answers you’re looking for.
What is market research?
Ever experienced a lightbulb moment, and immediately find yourself wondering if people would actually like, and more importantly, buy your product or service?
Well, market research can provide much-needed clarity, and answer other burning questions you may have.
Companies spend time, money, and effort in conducting market research, and with good reason. The process takes the guesswork out of whether an offering would be appealing to a target audience and steers the company ship from a potential iceberg.
And there are more reasons to join the party. Market research provides invaluable insight into competitors, industry trends, and assists in creating an in-demand product.
Why is market research important?
Do Hershey’s launch a new candy bar without taste tests? Do ad campaigns get signed off without test screenings? Or do fast-food chains launch new burgers without checking out what the punters’ tastebuds are craving?
Answer: A resounding no. Rather than acting on a whim, the company completes meticulous market research beforehand, to improve their chances of a hit, and reduce the likelihood of an expensive pink elephant.
In a nutshell, market research spills the beans on what prompts customers to put their hand in their pocket, buy products and services, and part with their cash.
The process is critical to ensure that the best decisions are made by a company. But how does it help, and why should every company sit up and take notice? All shall be revealed...
Identify your market
Ever tried building a product or creating a service with no idea what’s actually wanted? Trust us, it’s impossible to hit the spot unless you communicate with people who fall within your target market.
Market research will provide you with a set of definitive answers to key questions, including:
- Who is your product aimed at?
- Who are your customer personas?
- What features do they want from your product?
- How much are they willing to spend?
At the start of the process, you have a blank canvas. The market research process allows you to clearly paint an image of:
a) your ideal customer - gender, age, location, income, etc.
b) the product you’re going to create, as dictated by the needs of the customer.
When you’ve identified who and what you’re creating, you’re able to successfully tailor your marketing and pricing strategy, accordingly.
Quash the competition
Wanna know how much soccer teams in England’s Premier League spent during the 2019 transfer window? $1.4bn.
In conducting market research, product marketers have the same motive as the Manchester United’s and Liverpool’s of the sporting world - they want to stave off the competition and be the best.
Business is cut-throat, and more often than not when a rival poaches customers, it all boils down to one major factor.
You got it: They’re well prepared. They’re one ahead of the game. They’ve done their research.
Market research is vital in identifying areas to be exploited in your competitor’s approach. Preparation is key for any company, and this remains the same as far as market research is concerned.
Don’t get caught in the shadow of your rivals - make them chase you. Seek valuable insights and use your findings to create an innovative strategy that’ll not only generate new leads but also protect your existing customers.
Avoid silly mistakes
So, you’ve got your wonderful product, and you’re desperate to send it to the market.
But hold your horses - have you tested it, beforehand?
If so, congrats, you’re good to go!
If not, it’s time to dampen your enthusiasm, take a step back, and let prospective buyers test it out beforehand, so you can iron out any imperfections - step forward market research.
Although your hunch may tell you your product will resonate with consumers, it’s a pretty big (dare we say, stupid) decision to make based on your gut instinct, and if things go wrong, you’ll be ruing your choice not to arrange some simple testing.
Focus groups are a great way to get feedback on your product or service. If things go swimmingly, awesome, you’ve got the peace of mind you need and you can push on with the launch. If there are areas for improvement, just go back to the drawing board and make your service even better.
Protect your business
Market research not only indicates what the market is like now but also allows you to forecast how your industry could shape up in the coming months or years.
Acting with foresight can allow you to exploit potential gaps in the market that other companies may not have spotted, so always stay on your toes and keep your eyes peeled for opportunities that may arise.
Take HMV, for example. While they continued to channel their efforts into the sales of CDs and DVDs, Spotify and Netflix researched the market and developed mobile platforms offering music and film on demand, in line with emerging trends amongst the market.
For those of you who don’t know how the story ends, the total assets for Netflix were $34.9bn for 2019, Spotify is being heralded as ‘the savior of the music industry’, and HMV has called in administrators for the second time in 6-years. Winner: Market research, by knockout.
Primary vs secondary research
There are two types of data collected when completing market research:
Primary information is collected yourself or by a specialist who has been hired to collect the data on your behalf. For example, the PMA team collected primary data for our State of Product Marketing report, while we’re asking questions to the 1000s of product marketers who are members of our Slack community, daily.
Good news, secondary information has been completed for you and organized for reference. This data includes things like:
- Government websites.
How to conduct market research
Methods for collecting data vary depending on whether you’re collecting primary or secondary data - there’s no ‘one-size-fits-all’ approach.
So, how should you tackle each scenario, to be sure you get the best possible results?
Primary research is based on two types of information: exploratory or specific. Exploratory research is open-ended, with respondents usually providing their views in an unstructured interview scenario. On the other hand, specific research tends to be more structured, to solve a particular problem highlighted during the exploratory phase.
When arranging primary research, it’s important to identify the preferred method of communication, whether this be direct mail, phone, or interviews. These should be considered carefully, given the response rate for each method varies. For example, people tend to prefer a quick chat on the phone, rather than taking more time to respond via direct mail.
Social media is also a widely used tool for conducting market research, on a wide scale. Features such as Instagram stories allow companies to get opinions from 1,000s of followers in very little time.
Information for secondary data is often available to the public and can be found in libraries, educational institutions, etc.
Media outlets such as newspaper publishers and TV stations host a breadth of information that can be used when gathering secondary data. This includes demographic information outlining income, age, gender, etc.
How to choose your sample
It’s essential to gain the opinions of those who matter, i.e. people with your buyer personas. To form a perfect sample, there are some guidelines we recommend you don’t flout:
- Aim for 10 participants per buyer persona: There may be some instances when you decide to focus on multiple personas, in which case, source separate sample groups for each, and be sure to include roughly 10 people in each.
- Search recent surveys: If you’ve completed a recent survey, tap into your existing resources. If the sample has had recent exposure to your company, their recollections will be more reliable.
Mix it up: While a sample formed wholly of your loyal fanbase may massage your ego, it’ll compromise the quality of your market research. So, mix it up a little, and seek a variety of opinions. Include people who’ve purchased your product, fans of your competitor, or people who may be on the fence. Throw yourself out of your comfort zone, put on your hard hat, and prepare for a mixed response; criticism is your friend, not your enemy.
How to engage your audience
Market research firms have a catalogue of participants readily available at their fingertips, but not every company has the same luxury, meaning we need to get our hands dirty and find people ourselves.
It may seem a pain in the ass, but in reality, there are several ways to recruit respondents for your group.
- Incentives. It’s often the case people want to be compensated for their time, and a small incentive will, more often than not, give them the impetus to agree to research. Whether it’s a small payment, or a shopping voucher, it’s a small price to pay to get your research over the line. If you can’t afford to offer incentives, give them access to members content on your website, or loyalty points towards future purchases.
- Be social. Twitter, Facebook, Instagram and LinkedIn all share one trait: they house your fans (or followers) in one place, meaning you can send a blanket rallying call asking for support and take your pick. Piece of cake.
- Use your CRM. Your CRM system should be your best friend when it comes to picking a sample, as it saves precious time. With the click of a button, you can immediately apply a filter to applicable time periods, genders, ages, etc. and contact the relevant people for your study. Also, be sure to liaise with sales teams who will be able to help, if you need support accessing accounts.
- Spread the word. Whether it’s your family members, friends, colleagues, tell everyone you can possibly think of you’re conducting a study and need help. Share posts on LinkedIn and ask others to like and share, and before you know it, your initial post will reach 1,000s of prospective respondents. The more creative you are, the more people you’ll attract.
Ask the right questions
Whether you’re conducting a market research group, sending a questionnaire in the post, or calling someone directly, make sure your question holds relevance.
Don’t waste your time (and theirs!) asking questions that aren’t needed. Cut to the chase and ask:
- What do you look for in X?-
- How much would you usually be willing to spend?
- What is it about your product/service that makes it different from others on the market?
- What features do other companies offer that you don’t?
This is your prime opportunity to pick the brains of your market and put the pieces in place for the best product or service on the market. Don’t be afraid of criticism, it’s all part of the process, and always ask the golden question: How would you feel if our product suddenly disappeared? Always seek the answer to a solution, not an excuse for your shortcomings.
Ideally, try and form an in-house sample so you can form a stronger bond with the respondents and gain a more honest assessment of their viewpoints. The better your questioning, the better the answers, and that’ll greatly improve your product.
There’s a myth that market research is an indulgence reserved exclusively for large-scale organizations. Kick that nonsense to the curb and check out HubSpot’s tips on how to conduct market research on a tight budget.
Now, we’re certainly not calling you guys horses, but as the saying goes, we’ve led you to the tasty water.