Starting a new business can be a lot like starting an exciting adventure. But much like any significant journey, it requires some preparation.
Maybe you have an innovative way to fill a market gap or are building a product that will change the landscape of your entire industry. Whatever your story may be, the same question applies: will people buy it?
Sure, you can choose to take your chances with the market. But, you should know that there are tangible ways to set yourself up for success early in your development.
By taking the time to understand your industry, ideal customers, and the competitors in your space, you'll find that breaking into your market becomes that much easier. Read on to learn more about market research for startups, and the 8 studies every startup should run.
What is Market Research?
Before we dive into the nitty-gritty, let’s cover some basics.
Market research is the gathering of information about your target audience, competitors, and industry trends. With the intention to use that data to guide your decision-making.
Market research is NOT something that you do just to validate your product ideas or screen your ads.
Yes, you certainly can do those things. However, good market research allows you to evaluate what is already available to consumers and how it is (or isn’t) meeting their needs. It affords you a window into consumers' minds, allowing you to discover the real challenges they face and what you can do to ameliorate them.
Why is Market Research Important for Startups?
The goal of any business should be to delight its customers. But if you’re not asking them what they want; how will you know?
When you’re entering an established industry as a startup, you’ve got to understand the current landscape so you can hold your own against the larger players in your space. Market research allows you to do that by giving you access to the preferences, perceptions, and opinions of your audience.
Ultimately, the insights from market research will inform your product or service development, help you discover the messaging and branding that resonates, and enable you to create better customer experiences.
8 Studies Every Startup Should Conduct
While there are many types of market research studies and experiments you can run, here are the 8 that you should consider first for your startup:
1. General Market Analysis Survey
This first study is a simple one. A market analysis survey will give you data on your market’s size, trends in your space, growth potential, and key customer segments (or buyer personas) in your market. The overall goal of this study should be to identify opportunities and potential gaps within your market to better differentiate your brand.
2. Customer Research
The second study we’d recommend is a survey (or series of surveys) that examines your ideal customer. This type of research should focus on your customers' needs, preferences, behaviors, and pain points. This data will help you to build customer-centric products, ad campaigns, and experiences as you scale.
3. Competitor Analysis
If you want your business to thrive, you've got to understand the competitive landscape. But if you're on the outside looking in, it might be difficult to tell what's working for your competitors and where they fall short.
A competitor analysis survey is primarily focused on understanding the strengths, weaknesses, and market positioning of the players in your industry. It will help you get a better grasp on their product/service offerings, pricing strategies, and marketing tactics, enabling you to find and fill gaps in the market.
4. Brand Perception and Positioning
While it is important to understand where your competitors stand, it’s equally important to understand how your brand fares with the public. Brand perception and positioning studies will help you measure how your brand is perceived by your market, along with the values and positioning that your audience associates with your brand.
5. Product/Feature Testing
It’s been said that around 95% of all new product ideas fail. While the validity of that exact figure remains to be seen, the point remains true- product development is riddled with trial and error, with very few products rising to the top.
Product research and feature testing will allow you to gather feedback on your prototypes during all stages of development. This can include using methodologies like MaxDiff or Conjoint Analysis to identify features to prioritize or identify an ideal combination of features.
This feedback can be crucial for refining and improving offerings before launching to a wider market, or refining after an initial launch.
6. Price Sensitivity Research
Pricing is a crucial factor that often determines the success (or failure) of an offering. But without solid data on what consumers are willing to pay, you are left with best guesses and gut feelings.
Pricing research allows you to test the price sensitivity in your market and investigate the pricing models that work best for your business. Tools like Van Westendorp’s price sensitivity meter and Gabor-Granger will show you the prices consumers are willing to pay for your product and give you the optimal price point that maximizes your revenue without compromising demand.
7. Industry Trends and Insights
Research can extend far beyond product, marketing, competitors, and pricing. Regularly tracking industry advancements and trends is a great way to ensure your organization stays at the forefront of innovation (and on the top of customers' minds).
You can use these types of studies to stay up-to-date on the latest market trends, technological advancements, regulatory changes, and shifts in consumer behaviors.
8. Feasibility Studies
Whether you are just beginning the ideation process or making plans for a brand expansion, feasibility studies are invaluable. You can use this type of research to evaluate factors like market demand, cost structure, resource availability, and potential risk factors.
Startups should approach market research as an ongoing process rather than a one-time activity. Regularly updating and refining your understanding of your market will help you make informed business decisions and stay competitive.
Running Market Research Studies for Your Startup with SightX
The SightX platform is where growth happens. Our software gives you the tools to ask the right questions, learn what people really want, and respond with the right actions. Every time.
With our new Generative AI consultant, Ada, you can harness the power of OpenAI’s GPT to create custom surveys and goal-oriented studies instantly, analyze the results, and get key insights in seconds.
If you're ready to dive in click the button below to get started for free!
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