By: Kumar Sarangee, Ph.D.
The best companies in the world know everything about their customers, and one of the most important tools for learning about customers is market research. It reveals who your customers are, whether they have a need for your product, and a variety of other factors integral to running a successful business. Yet, market research is often ignored or done improperly because of constraints related to funding, manpower, and time. Without efficient and targeted research, entrepreneurs suffer from an incomplete understanding of the market because they don’t have direct experience with potential customers.
In order to ensure your market research is effective, follow these preliminary steps:
- Determine your research goal and develop a research question.
The first step to conducting market research is to determine what you hope to achieve through your study. For example, you may want to know if your business model or concept is feasible. In this case, your research questions could include potential risks and how to minimize them or what the sales cycle of your business is. To assess viability, you should determine the size, growth, and dynamics of your market.
To gather information on your customer base, study your customers: what they want or need, if your product or service meets those needs, how your product compares to your competitor’s, and whether your value proposition appeals to your customers.
Make sure your research question is specific and includes who is being studied and what is being measured. This will help reduce the risk of error. You do not want to put time and money into a study only to get skewed results.
- Decide the best method for performing the study.
Pick a method that balances your goals with your constraints. As mentioned above, many entrepreneurs will face challenges related to funding, manpower, and time. In order to get the most out of your effort, you need to pick a type of market research that will yield the correct results in the most effective manner.
Some examples include utilizing available secondary data, coordinating an ethnographic study or customer observation, conducting voice of the customer interviews, holding interviews with industry and functional experts, organizing focus groups, generating concept testing surveys, and more.
If done properly, market research will help you build a closer relationship with your customers, and increase your chances of creating a successful business.