It’s no secret that startups face an uphill battle. Some quick marketing research (the topic of this post, ironically) reveals that 30% of new businesses will fail in less than two years. And we’re not just talking about starry-eyed dreamers working side startups on weekends and lunch breaks, as major startups with serious funding are often doomed too (just ask the folks at WebTV, WebVan, Pets.com, and Ask Jeeves to name a few).
But then again, some quick marketing research also reveals that most startups fail for one simple reason: a lack of proper planning. With so much competition and so many well-executed ideas out there, only startups with a razor sharp focus in the right area will survive.
Good news: Smart marketing research helps you succeed.
Marketing research process
With a little diligence, planning, and some well-timed decisions, you can put yourself in a good position to succeed. This all begins with solid marketing research. Although you could fill a small library with all the information written about marketing research, we’ll try to quickly point you in the right direction.
1. Start by conducting your own primary research
Primary research is research that you conduct yourself (as opposed to secondary research, which you glean from other’s research). Depending upon your time and expertise, primary research is something you may be able do yourself. Or you can hire an online freelance marketing research expert to make quick work of the job.
One popular methodology for marketing research is SWOT Analysis. This involves discovering your SWOT: Strengths, Weaknesses, Opportunities, and Threats. Or more simply, just dig in and begin doing a competitive analysis. This includes defining who’s in your space, how they’re doing things better than you, and what’s your competitive advantage. While you’re at it, get some insights on the size and location of the market (remember, it’s easier to get funding if you find customers before you launch).
But how to discover insightful nuggets among this wealth of information out there?
If you’re limited by funds (as are many startups), begin by using online search tools available to you—such as Google, Quora, Reddit, Digg, and others. You’ll also find lots of information through the U.S. Census Bureau (if your market is American businesses or consumers).
At this point, you should be getting some fairly astute answers to your questions. If you’re not getting the results you had hoped for, don’t hesitate to pivot and tweak your product or market slightly (or radically?). Sometimes your initial primary research will reveal a market that’s so underserved you simply can’t let it go untapped.
2. Conduct quantitative and qualitative research
Once you’ve sufficiently analyzed your findings, next consider conducting some quantitative and qualitative marketing research next.
This involves asking potential customers about the market in general and your product in particular. Quantitative research includes live in-person surveys (perhaps you can stand outside of where your customers often gather, such as a related business conference or shopping mall?). It can also include social surveys (think Twitter or Facebook) or web surveys (such as Survey Monkey or Urtak). You can also dig a little deeper with qualitative research, such as organizing focus groups and scheduled one-on-one interviews.
Again, finding an online marketing research pro or team can save you valuable time and money, freeing you to focus on what you need to do to leverage the results and grow your business.
3. Oh, be sure to ask good questions (no, great ones)
If you do decide to write and ask your own questions, here’s some advice to keep in mind.
First, start with some warm-up questions to make customers comfortable. Jumping right into complex questions about buying your product can be too jarring.
A good warm up question might be: What do you find most frustrating about (insert your market)? Next you can begin asking them more direct questions, such as: Where do you turn when you’re interested in (insert your product category)? Finally you can ask more open-ended and indirect questions, such as “If you had to build the best (insert your product category), what would you create? Again, the point is to ease the respondent into revealing those nuggets of invaluable information that can make or break your product development. A seasoned marketing researcher can surely make this happen for you.
4. Gather raw data and meaty anecdotes
By following the suggestions above, you’ve hopefully compiled a ton of great information. This includes everything from the size of your market and a competitive analysis, to insights on your own pricing and positioning. Rest assured, if collected correctly, this systematically gathered data is 100% more reliable than your hunches or a thumbs up from your brother’s neighbor’s aunt.
Now it’s time to turn that information into an action plan.
5. Make informed decisions
In some cases, this simply means that you need to tweak your offering? For instance your product at $100 may be too expensive, but at $79.99 it’s the greatest thing since the foam finger. Or your research may show that it’s best to pivot and find opportunities on the fringe of your original idea? It may even make sense to simply walk away at this point, and turn your efforts to other ideas you’ve got in your pocket? You have to decide.
Some parting words
It makes sense to gather important facts before you spend a ton of time and money on your startup. Not only is it easier to adjust your product in the early stages, you’ll also see where mistakes are being made sooner than later and learn from them before ramping up. So whether on your own, or using freelance marketing research experts like you’ll find at Elance or oDesk, the right data in hand is your ticket to getting off to a great start in the business world.
Feeling overwhelmed? Get more out of your to-do list by working smarter, rather than harder.