Market research is very useful for small businesses. As a small business, especially doing something disruptive, you have to follow your gut much more than in other scenarios, for sure and there are some types of research that will not be applicable. Three things I have learned about marketing and market research:
- Online surveys are often overrated and poorly implemented, qualitative research is often underrated.
- Market research is not about outsourcing your job to consumers, but they can provide valuable input to various decisions you will need to make.
- I am not Steve Jobs.
More detail on those:
1. While I don’t want to get into semantics I think it is important to point out that market research is more than quantitative surveys about the viability of a product idea (as sometimes seems to be the assumption).
If your respondent hasn’t experienced something you should probably not ask them about it explicitly. For example, just last year I stayed away from the the word smartphone, it turns out that among consumers there is a broad understanding of what it is but when it gets down to specifics perceptions vary. Try asking your friends what makes something a smartphone (they might focus on touch screen, data and internet, apps, …). Asking your friends brings me to the next point.
Qualitative research (focus groups, interviews, observation) is often underestimated or overlooked. If you run a music startup and ask a DJ friend how they store and manage music, would you consider that market research? If you ask a few people to come into the office to talk about how and on what devices they store and listen to music, are you running a focus group or are you just talking to people? My suggestion, without worrying about the exact definition of market research, is to figure out as many ways as possible to inform your decision making (qual, quant, observation, reading forum posts, using competitor products, mopping up available data, web analytics, …), pick the most appropriate ones, use them in the right order.
On qual and quant specifically, talk to people in a more or less formal methodology, listen to their problems, how they react to your ideas, what they think of competitors or perceived competitors. Follow up with a survey to validate and quantify what you have heard. Two most common mistakes with surveys: One is constructing your questions without a basis for comparison (30% were somewhat or very interested in the product, means nothing. 30% preferred idea A to idea B, means something). The other is sticking your survey on a forum or emailing it to a group without considering the biases within that population and within the sample who responded. The results might be useless or worse and you probably should have stuck with qual.
2. You can’t expect consumers to do your job for you, but their input can inform your decision making. If potential users aren’t informing the process what or who is? If you start with a big hairy problem or a vision, asking consumers explicitly about it is probably of little use. Ask customers how much they want to pay and the answer will come back as close to zero. There are limitations to any information gathering or problem solving method. Knowing them is what makes you competent, working around them is what makes you good. As you break your big problem/vision down into its parts that’s when you will find specific missing pieces or decision points that consumers can inform.
3. I have often heard it said that Apple is a visionary company and they “don’t do market research”. I think it is true they don’t defer to consumers on big product decisions. No one should, coming back to point 2. I know for a fact that they do customer satisfaction surveys and I would be very surprised if they don’t do brand tracking and media effectiveness research. Unless you are in the position of a Steve Jobs you might want to generate some customer/user feedback (numbers or comments) to validate or modify your assumptions, both for yourself as well as for colleagues and potential investors. In my case personally, the alternative to doing market research is not being Steve Jobs, it is being a worse marketer. Update: The Apple Samsung trial confirms that Apple does more market research than previously thought. Not for product development but for understanding customer perception of their and competitors products
At Balcostics our mission is to empower decision makers with the required data and information to make better decisions. Learn more about our full list of research outsourcing services for individuals and companies: Click here