Market research is important when launching new products and as part of the pre-sales process to ensure that:
- You are able to target your advertising
- Markets you are targeting like your products
- Markets are big enough to be worthwhile
When doing market research you should be open minded because you may in fact discover that there are more markets than you realised.
Clearly from the above, you will see that market research is about more than just interviewing potential customers. To do market research you should interview customers, explore existing products including any value-add things being provided, try to discover the barriers to entry, etc.
The Pitfalls In Market Research
Market research is hard. Data is unavailable and any data you collect is likely to be unreliable. Be mindful of this and try to guide people to give you the information you want without influencing their answers. For example, try loading questions to encourage an answer in one direction, then loading them the other way for a different person. This might give a clue if people have a strong opinion about the subject or if they’re just making noise from their face holes.
Be aware that people will often give their opinion about what your business should do without having any idea about the business or industry. For example, they might make a suggestion of a new feature or product that they might like but no one else would, or they might make a suggestion for something that they think others would like but actually is unimportant. This is more common that not.
Watch out for cultural differences when exploring markets afar. For example, in some countries it may be considered rude to give negative feedback, so any neutral or overly verbose response should be considered extremely negative.
Finally, people generally talk rubbish when quizzed for feedback on products and services. For example, if you ask people what they would pay for a widget, they might answer with a number that they think others would pay, what they could afford to pay but never would, or a number they think you might like to hear. A better way to work out what they might pay for a widget is try to sell them a widget.
To conclude, market research is very important and is an activity that goes beyond simply gathering information from potential or existing customers with questionnaires. Be innovative in the way you collect data and be aware that most of what people say is rubbish. Try to find ways to measure peoples actions and reactions where possible.
