Market research can be very beneficial to the development of a company or product. The feedback and insights you receive from conducting market research could potentially save you large amounts of time, effort, and money that you would otherwise spend on developing a product that might not be successful.
There are many benefits to market research that you can hear every entrepreneur, advisor, mentor, and market research firm tell you about.
So here’s what wrong with it.
Traditional market researching methods, although effective, generally aren’t accessible to small business owners or startups. Many young businesses don’t have the money to invest in hiring a market research firm to conduct the research for them. They also don’t have the time to spend on creating and conducting their own research. This can result in ambitious entrepreneurs pursuing ideas that are doomed to fail, wasting their time, money, and efforts because they weren’t able to market test at the beginning. Traditional methods are also just that, “traditional.” They have not really evolved with the progress of technology and, although they can be very useful, they are still run using procedures that may not be relevant anymore.
Here are some basic advantages and disadvantages to traditional methods, as well as alternative tools to use if you’re a small business or emerging startup looking for an easy and affordable way to conduct your market research.
Focus groups are an effective way to conduct a large “brainstorming” session with your potential users. They are relatively easy to set up, given that there are enough targeted users available for a group discussion. All that is required are some pointed questions to help move the conversation along and a person who can moderate the discussion.
However, there are some issues that arise with conducting focus groups. Gathering the appropriate group can pose a challenge, as can moderating or driving the conversation effectively without experience. Focus groups are also challenging to set up if the target market is global or very specific. The access to virtual focus groups using software such as Skype can be a solution to this problem, but it may also be difficult to coordinate multiple people virtually.
Interviews are like focus groups in that they are conversations between the user and the interviewer. They are also able to provide insights about a product that the entrepreneur may have not thought of yet. This method requires a lot of time and the ability to find enough people to interview in order to have a good representation of a target market.
Observational research is an interesting method that allows for results to be given based on actual behaviour, as opposed to reported behaviour. Instead of asking users how they interact with a website or product and basing results off of their answers, it is possible to actually observe how the interactions take place. This can provide much more reliable results.
This method can be very time consuming, however. It also requires the resources to develop a prototype or a basic version or model of the product in order to see how users engage with it. Setting this up may require a lot of time and effort on the part of the researcher.
Surveys are probably the easiest and most effective ways to conduct market testing. Creation and distribution can be quick and easy if using one of the many online tools to make surveys. As they are easy to distribute and often take people only a few minutes to fill out, the insights that a survey can provide are very valuable, as well as easy to understand.
The difficulty with surveys is that it can be a challenge to tailor questions that are relevant enough, especially if the product or idea is not quite defined. Collecting enough answers to provide valuable insights can also be a challenge. Once answers are collected, it can take a significant amount of time to analyze them into actionable insights.
Experiments are constructed like scientific experiments with hypotheses, variables, and conclusions. The simplest way to conduct an experiment when it comes to market research is with A/B testing. Different versions of a product can be shown to an audience in order to see which option connects best with the users. Results can identify the best way to proceed in developing the idea, whether it’s with regard to a logo design, webpage layout, packaging style, or more.
A few disadvantages of conducting experiments include the amount of time it takes to set up an experiment with the right variables, as well as the complexity of the experiment. Depending on how it’s run, results may also be difficult to assess.
Alternatives to Traditional Research
With the Internet providing entrepreneurs with global access to consumers, there are a few useful alternatives to traditional market research that have been developed and are being used by businesses, big and small. These online options make the seemingly daunting task of conducting market research simpler and quicker.
CrowdPicker – an online market testing tool. CrowdPicker allows users to launch single-question polls to gauge global public opinion on a wide range of things, from logo designs, company names, taglines, packaging layouts, and more. Crowd sizes are flexible, making this tool affordable for any budget.
Ask Your Target Market – an online survey builder. AYTM has its own consumer panel with demographic and psychographic filter options to help users target their specific audience. Surveys can be created and launched to internal lists for free, or users can pay to make use of the AYTM panel. Users can also choose to have the AYTM expert team to launch a study for them.
Survata – another online survey building tool. Survata uses a network of online publishers to launch user surveys to consumers in exchange for access to premium content. Users can choose to reach the general U.S. population, or specify a certain demographic, with prices varying depending on the specifications.
Each of these services varies in cost and audience reach.