How to Do Market Research for a Startup
A startup without effective market research is like a ship travelling offshore without a compass.
Therefore, it can lose its direction after a while and can disappear in the middle of nowhere. Market research for a startup enables business owners to guess what is required to grow their business. Doing market research for a startup provides an opportunity to analyze its position in today’s competitive marketplace.
It is important to check whether your product or service meets the targeted customers’ needs if you are working in a startup. In this way, you can understand whether it is likely that your product or service will find a long-lasting place in the market. You should find answers to the main market research questions for startups and find the best route for your business with an effective marketing process.
If you want to learn more about how to conduct marketing research for a new business, continue reading our article. In this article, we focused on informing you about what is marketing research. Also, you will gather knowledge about the steps of marketing research.
What is market research?
You have just an idea of a startup but you are afraid that it will not be sustainable in the competitive marketplace. To avoid this, you need to do market research before taking an action.
Market research is the process of gathering information about what is going on in the market. It includes investigating market dynamics to know your competitors, potential customers, and market conditions.
Searching for trends, learning about other companies with similar products or services, investigating the prices and marketing methods of others, and getting information about your prospects are included in the market research for startups.
What a chance that you can reach a great amount of knowledge for free on the internet. All you need to do is to know the steps that you will follow in the process of market research. Then you can decide on the best route for the development of your business.
Where you are going to sell your product or service? Is it a specific region or a wider area? If you want to sell your product or service in a specific region, it is better to gather information about the region and your potential customers. If you know them better, you can provide your products and services better.
Whether you want to start an enterprise or grow your small business, doing market research will definitely uprise your business when you take the necessary actions and follow the procedures determined after the market research.
You should carefully evaluate survey software providers to help you get quantitative information such as price points, market segmentation, and total market sizing. For example, QuestionPro provides one of the best-in-class survey software functionality, with great reviews on G2Crowd. They have a free product available to all, and also the free QuestionPro for Startups program, which includes the high-end Research software for eligible startups and respondent audiences to put questions to.
Market Research Questions for Startups
Before diving into the key steps of market research for a startup, there are essential market research questions in order to narrow down the market. These questions need to be asked; yourself, the target audience and current customers.
Let’s start with the questions you should ask yourself first. So, what could those be like?
- What is the potential size of my market?
- How risky is the market?
- Are there other products or services similar to ours?
- Who are my competitors and how big are they?
- Is there any market similar to ours?
- What are the estimated market share of my business and my competitors?
- Is there anything unique to my business that will be advantageous?
Once you are done with the questions above mentioned, it should be time to learn more about your target audience. Wondering who your target market consists of, how you can provide benefit to them or what makes you unique? Then, ask those questions below;
- What are their age ranges?
- Where they are located?
- What industry are they from?
- What do they need?
- What problems do they face?
Last but not least, your current customers. You may don’t have existing customers right now but you can ask these questions to people who use similar products or services to yours;
- Do you like the product or service?
- What did you like most about the product or service?
- What did you like least about the product or service?
- How was your experience with the product or service?
- Would you recommend this product or service to your friends?
To wrap up, all questions we mentioned are key while you start your new business. You need to think from different perspectives to understand your needs first then market and current customers if any.
If all is clear, we can move forward with the steps of market research for startups!
Steps of Market Research for Startups
There is no chance to fail if you follow the path accurately. Here we have listed the main steps describing how to do market research for a startup idea in detail.
1. Defining the purposes of the marketing research
Among several reasons why market research is essential for startups, you need to define your purposes of doing marketing research. Do you want to conduct internal research to investigate the problems? So you can set a better strategy for the future. On the other hand, you can focus on external research to analyze the drivers and barriers in the market.
Internal marketing research mostly aims to increase sales and revenues. This analysis focuses on past experiences to reduce the risks for future steps. On the other hand, external marketing research is concerned with the analysis of the environment and market where you operate your business.
Searching for market trends and other companies’ activities is included in external research.
Depending on your orientation, you should apply the right method needed for sustained business growth. First, it is important to create an effective marketing research plan. This plan should have a well-defined purpose that will save both your time and money.
2. Asking the right questions
While creating your business plan through market research, there are some fundamental questions to be answered. If you are about the make further decisions, think twice, and answer a set of questions regarding your future approaches and activities.
3. Analyzing the competitors and potential market
Market research should start with a look at the entire industry and potential market to specify the companies providing similar products or services to your potential customers.
The first thing that you should do is to determine your competitors and analyze their business activities to find out their strengths and weaknesses.
You also need to use different analytic tools and metrics to do effective marketing research. Try to choose the best analytics tools, especially for startups and small businesses that you will benefit more from during the whole process.
Through a market explorer tool, you can also check the trends in the industry. Learn what are the drivers and barriers in the market. You can also benefit from KPIs to understand whether any business is going well and what is needed for sustainability.
Our related article informs us about the essential KPIs for startup marketing, which are very important for the regulation of work.
If you want to know more about your competitors and their business movements, you can make use of the tools that follow their social networks, comments, media visibility, and brand development process.
If you are limited by funds, do not worry about it because this is so normal for most startups. Therefore, try to choose a tool from which you can benefit at most.
4. Analyzing the potential audience
After you learn enough about the marketplace and competitors, now it is time to think about your potential customers. Who is your target audience? What is your ideal customer profile?
Any enterprise without investigating the potential customer is highly likely to fail after a while. If you want to attract the attention of people, you need to know more about them.
The main aim of any business is to acquire loyal customers. These customers will increase the rate of return. You should pay attention to the personalities, preferences, and interests of your customers to keep them loyal to your company and optimize your sales.
Through a well-designed outline of your target audience, it will be easier for you to meet their expectations with special offers and customized plans.
You should also estimate the total market potential, market segmentation, and the size of the target audience because it will help you understand your potential customers’ needs and preferences better.
Besides, you should also pay attention to your competitors’ web traffic. Try to compare it with yours to see whether what you are currently doing is enough to generate sales leads.
How to Do Market Research for a New Business
New ideas can come up every day but if you are launching a new business, you need to market yourself to the backbone. The first thing first: do good research to shine amongst your competitors.
In order to manage this process successfully, there are a few steps that need to take. If you don’t know who you are going to sell to, you won’t be able to hit the right button at the right time.
Consider these steps at the pre-launch stage of your product life cycle;
- Understand your market and your competitors,
- Target your potential customers before gaining new ones,
- Create your unique value proposition,
- Determine your core marketing strategy,
- Do product testing before launching,
- Create your marketing campaign and release it on the best channels,
- Monitor your product lifecycle.
If you are a small business or a startup, it is crucial to do efficient market research to plan your digital marketing strategies and make further decisions.
It makes sense to gather information about the industry, competitors, and target audience before spending your time and money on your enterprise.
To increase your sales and revenues by attracting more people to your brand, you need to take intelligent steps. If you conduct market research for your startup, there is no doubt that you will get off a start in the business world. Please also check the best digital marketing agencies for startups list for further reading.