Market research is critical to every company. That’s probably why over $73 billion is spent on Market research each year. And regardless of your budget, you should at least be spending thought power and time on it.
Whether you want to conduct market research for your client or for yourself, you need to know current best practices and strategies that work today.
So in this guide, you’re going to learn:
- What is market research?
- Why is market research so important?
- 9 market research strategies
- How to conduct market research
- 11 common market research questions
What is Market Research?
Market research involves collecting data about your target audience and / or customers. You use this information to see the probability of your product being successful with a given market, or to see how well or poorly it is already doing with current customers.
Why is Market Research So Important?
Market research is so valuable because it allows you to get into the mind of your target audience. As the world becomes more saturated with marketing messages, you need to truly understand what makes your market tick in order to stand out.
And you have to understand how to create a product that solves their exact problems. Because when you solve problems, prospects open up their wallets.
In short, market research is where the real money is at. No one cares about your product. They care about what it does for them. And market research is how you find that out.
10 Market Research Strategies
Let’s talk about some higher level strategies when approaching market research. Don’t worry, we’ll get into tactics in a minute. But for now, here are the main concepts you need to internalize:
Nothing beats a face-to-face conversation with your customer. Alternatively, an interview via email or phone works too. But ideally, you can have a live conversation with customers that helps you understand the nuance of their wishes, problems, and behaviors.
2. Product Use
As someone who lives and breathes SaaS marketing, take it from me — understanding how people use your product is powerful. You need to set up analytics and tracking tools that help you understand how users are navigating your website or using your application, so that you can help them with objective insights.
3. Avatar / Buyer Persona
Creating a customer avatar helps you visualize who your ideal target market is. It makes a huge difference when your marketing is speaking “one to one” rather than to a vague sea of user IDs.
4. Market Segmentation
Within each market, there are segmentations (sub markets). The same goes for your customer or user base. You should categorize your audience based on characteristics such as: specific needs, pain points, urgency, purchase history, and more.
5. Pricing Market Research
How much are people willing to pay for a particular product or service? Well, if you have customers already, then you have some data to pull from. But if you’re entering a new market or creating a new product, take a look at competitors and their pricing. It will give you a gauge of your price range to start.
6. Analyze Competitors
Your competitors, as we just touched upon above, are a great source for market research. Aside from pricing, you can get clues regarding marketing headlines, content formats, and keywords, just to name a few.
7. Loyalty and Customer Satisfaction
What loyalty programs or incentives are people using in your market? Which customer base tends to be the most satisfied and vocal about their product of choice?
8. Brand Awareness
This lets you get a feel for how well known you are in your market. Are you the first business that customers think about for your product or service? Are you promoting enough? This makes a big difference in how you create content, depending on whether you have highly aware or low aware prospects.
9. Campaign Research
Take a look at previous marketing campaigns you’ve run. What campaign elements are consistent across your most successful content, ads, and other marketing efforts? You’ll find consistent themes that you should reuse again and again.
So, now that we know the major categories of market research, let’s explore specific tactics you can use when conducting market research:
How to Conduct Market Research
Let’s put market research into action. Here are concrete steps to take to learn more about your market, fast:
#1. Create Your Avatar
Every marketing research process begins with your customer avatar. This is a representation of the average buyer persona that you want to target.
Your buyer persona should include key defining characteristics such as:
- Job title
- Geographic location
- Pain points
To take it a step further, I recommend creating a name for your avatar too. That way, every time you create a marketing campaign, you know you’re talking to “Sarah” instead of a vague blob.
#2. Get Your Market Research Questions Ready
So you’ve identified the people you want to serve. Now it’s time to start conversations with them. You can contact your target market via:
- Online surveys
- Group meetings
- Reaching out to previous customers
And more. But the key is to stop theorizing and start hearing answers straight from the source.
Some good questions to ask are:
- Background Info – How long have you been at the company? What kind of hobbies and interests do you have? What does (product category) mean to you? (Remember, you can learn age, income, and that kind of thing from a basic survey. But you’re looking for elaboration here.)
- Company Info – How is your company structured? What are your job responsibilities? What kind of goals does your company have?
- Awareness Questions – Have you heard of us before? Have you seen our ads? Where did you learn about us?
- Pain Points – What bothers you most about (problem)? How have you tried to solve it before? How did that go?
As your process evolves, you’ll find even more questions to ask. And you’ll understand the real reasons your target market makes their decisions. This is worth its weight in gold later on when creating new products or campaigns.
#3. Spy Your Competitors
Technically, every business in the world is competing with Apple, Microsoft, and any company that also wants your customers’ hard earned money. Most people and companies don’t have unlimited budgets.
But when conducting market research, we want to niche down to our own industry and see what competitors are doing.
An excellent way to do this is via keyword research tools like Ahrefs or SEMRush. For example, if you sell “yoga classes,” then you can enter that keyword into one of these tools.
You’ll be able to see what kind of search volume that keyword gets, who ranks highly for that keyword on Google, and the strength of the competition you’re up against.
Even if you discover that the competition is too high, it’s still a win. You can find a new angle to enter the market, using long-tail keywords to siphon off customers without directly competing with giants.
#4. Test Your Theories
So you understand your avatar, you think you know what they want, and you’ve seen how other companies are attracting their business.
But the best source of market research is your target audience itself. And the only way to know if your research is accurate is to create marketing content: sales funnels, sales pages, email blasts, phone calls, and more.
Then, it’s time to take them live. What are your conversion rates? What are your bounce rates? How many people click on your ad? Are people buying your product?
Until you have real users or paying customers, you haven’t validated a single thing. Time, money, and attention are the only currencies that will grow your business. So it’s time to take a leap and ask your target market to take action.
11 Common Market Research Questions
Let’s talk about some good market research questions to ask:
- How old are they?
- Where do they live?
- Would they recommend us to a friend?
- Have they shopped with our competitors?
- What did they like about the competition?
- What didn’t they like about the competition?
- What product changes would fit our market’s needs better?
- How are customers rating their experience with us?
- How long, on average, do customers stay with us?
- What is the customer lifetime value (CLV) of our ideal customer?
- How much money do our target market usually spend on similar products?
Ultimately, the list of market research questions you can ask to yourself, or to your actual customers, is only limited by time and creativity.
The common questions above are an excellent starting point. But the true determinant of your market research success is having the desire to know as much as possible about the people you serve.
There you have it — the ultimate guide to market research. No matter your business model, industry, or budget, you can apply tips from above to learn about your target audience and create better products and marketing.
Have some market research opinions of your own? Leave a comment below.