Your Handy Guide to Conducting Market Research as a Tech Startup

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Conducting Market Research as a Tech Startup

Do you own a tech startup and would like to know how to do market research for a startup? If you answered yes to this question, you are at the right place. In this guide, we will provide you with tips on how to conduct market research for your startup. Stick around to find out more.


Market research plays an important role in the growth of any business, especially for startups. The reason why it is so important for startups is that many startups fail in their first year of operation. For example, in 2020, 90% of startups failed. This is mainly a result of the many risks and challenges associated with running a startup.

However, conducting market research gives you a deep insight into who your customers are, their behavior, and what influences their purchase decisions. Simply put, it helps you scale above the several challenges usually faced by startups.

What exactly is market research?

Before we dive into how to conduct market research, it would be great to have a proper understanding of what market research really is. In simple words, marketing research is a process that involves gathering data about your target audience in order to determine how viable your services or products would be.

Why conduct market research?

Whether your startup is an entirely online store or a brick-and-mortar store, conducting marketing research helps you understand the personas of your buyers, their problems, and their desired results. It also provides you with insights into the following areas:

  • How and where your target group and existing customers conduct their research
  • The trending things in your industry
  • The competitors that your target audience source information, purchases, and options from
  • Factors that influence purchase decisions amongst your target audience

Types of market research

Market research is generally divided into two categories, depending on how information is collected – primary market research and secondary market research.

Primary market research refers to any information or data collected yourself or an organization you paid to gather information for you. Simply put, primary market research has to do with any first-hand information concerning your customers and market.

On the other hand, secondary market research refers to any data collected by third parties. Secondary research encompasses studies and reports from government agencies, other companies, etc. Hence, the data gathered from this type of market research are not first-hand. Secondary market research can be very useful for analyzing your competitors.

Types of marketing research methods

As a startup owner, there are different types of market research methods that you can use to collect information and data. Here, we will look at some of the commonly used methods.

Interviews

This is one of the most widely used methods for gathering data in market research. This method is personal and gives room for extensive communication. With interviews, you can get accurate information about your target audience and existing customers.

Surveys

Surveys are considered the most commonly used market research method for collecting information from a target audience. Surveys used in market research come in different forms and are very versatile.

Focus groups

This type of research method usually consists of a group of people addressing a topic. Focus groups usually have an organizer whose responsibility is to control the flow of the discussion. The organizer usually has a couple of questions that they throw to the group for discussion. This type of market research method can be somewhat difficult to conduct but it is very effective.

Observation research

This research method has to do with observing your target audience while using your product or service. This allows you to find out what works well and what doesn’t. In addition, you get to find out what you can improve about your product or service.

Pricing Research

This is another marketing research method that allows you to find out the price for which similar services in your industry sell. It gives you insight into what your target audience can pay for your product and service. This makes it a very important market research tool for startups.

Customer satisfaction research

If you are looking to get more return customers, this is the market research method you need. It provides you with insights into what motivates customers to return for more purchases. This research method is very effective.

Product or service use research

If you’d like to know the perception of your target audience concerning the usability of your products or services, you can use this market research method to find out. Product or service use research gives you insight into why people use your product or service. This method is highly effective.

Social media listening

Due to a large number of users, social media has become one of the most powerful tools for collecting information about a target group in market research. The information shared by social media users are usually unfiltered and reflects what people really care about. This makes it a very useful tool for gathering consumer data.

You can adopt one or more of these options to collect information. However, the options you choose to use will depend on certain factors like time resources, budget, etc.

Marketing research process

Proper planning and research can go a long way in boosting the growth of your startup. If you are confused or do not know how to do market research for a startup, the following processes should serve as a guide:

Define the essence of your research

The first thing you need to do is define the goal of your marketing research. Knowing what you’re aiming for will help make your marketing research process easier.

Conduct primary market research

Conducting primary market research will provide you with first-hand information about your target audience which you can rely on. Provided you have the expertise and time, this is something you can do yourself. However, if you do not have the time and expertise, you can hire a research expert to help you.

You need to conduct a SWOT analysis to discover your strengths, weaknesses, opportunities, and threats. Alternatively, you can conduct a competitive analysis to determine the strengths and weaknesses of your competitors.

Perform qualitative and quantitative analysis

This has to do with asking potential customers about your products or services and the market as a whole. Quantitative and qualitative analysis usually involves live in-person surveys, web surveys, social media surveys, one-on-one interviews, etc.

Ask the right questions

Don’t start with questions that are too complex. Start with warm-up questions to get your customers comfortable. You can start with simple questions like – ‘what’s most frustrating to you about (your market)?’, ‘where do you source for (a particular product category you’re interested in)?’, etc. After asking these sorts of questions, you can proceed to indirect and open-ended questions.

Gather raw data and make informed decisions

After following the processes above, you should have gathered enough raw data that will be helpful to your research. The collected data will help in making informed decisions.

Conclusion

Now that you know how to do market research for a startup, you should have fewer challenges running your tech startup. The tips provided in this article serves as a guide to point you in the right direction on how to conduct market research for your startup.

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