How To Run Market Research For Your Startup

How To Run Market Research For Your Startup

Market research is a vital component of any business; it is especially indispensable for startups, which are notorious for carrying many risks. For instance, startups have a dismal rate of failure in 2020: a heaping 90% of new startups fail. Unfortunately, this is but one of the many other grim statistics these companies face.

Luckily, startup companies that conduct market research have a major leg up in their field. That’s because market research is a wide-spanning strategy that allows businesses to glean an array of insights. This includes findings on their competitors, customers, potential customers and the sector/niche at large.

In this article, you’re going to learn how to run startup market research for your company to stay ahead of the game and preempt failure.

Where to Begin on Market Research for Startups

Given that market research is an umbrella term, it’s common to be uncertain as to where to begin. It may seem that with market research websites, tech platforms and the mighty Internet itself, market research is information overload. It’s just another headache-inducing task that will produce few results.

That’s where you’re wrong.

Knowing where to start conducting a viable market research plan is key to garnering essential business knowledge, and the results can make or break your startup.

The first undertaking of doing market research is, well, discovering if there’s a market for your product or service. Many entrepreneurs evade this critical first step, as it may seem too obvious.

Or, you may feel a tad too complacent with your offering, deeming it abundantly innovative or useful, so much so that it doesn’t need to identify a market to which it belongs.

That’s a major misstep. You must always first identify the market you belong to. Only thereafter, can you determine your precise target market and continue with your market research. Most importantly, the market you identify can help you learn if your product or service is in demand. If you have too niche of a market, you will want to amplify your marketing efforts to bring more awareness to your niche and increase its profit-reaping potential.

Understanding Your Market

Once you’ve identified which market your product or service falls under and whether it’s worthy to branch into, you’re going to need to have a solid grasp on your market. This is not a “one and done” task, as market trends and marketing strategies across markets evolve with the times. Sometimes these changes occur in a matter of days.

Understanding your market, or more specifically, your niche, will help catapult you towards success. This is the bulk of market research and it involves relying on a swath of different sources.

There are two types of sources to observe in your market and niche, and in market research as a whole: primary and secondary sources.

Primary research

is research that you generate yourself, usually directly from the customers. This type of firsthand information is crucial for understanding your buyer personas and segmenting your target market. We’ll analyze primary research later in the article.

Secondary research

is the research that’s already been generated from a variety of sources and made available on the internet, trade magazines and other literature.

For the purpose of understanding your market, niche and competitors, we’re going to focus on secondary research.

You ought to accumulate as much secondary information as possible if you want a clear picture of your market. Here are the secondary sources you should turn to when running your market research on your market itself:

  1. For the latest trends within your market/niche, obtain trend reports from credible sources such as Google Alerts,Google Trends and Keyhole. These are keyword-based tools that can help you identify trends via:

      1. Finding the latest blogs, news, videos and search terms for free (Google Alerts)
      2. Monitoring search terms and drawing data on users searching for the terms for free (Google Trends).
      3. Overlooking keywords, topics, social media handles, URLs and mentions for a fixed price.
  2. Next, gather all the necessary statistics on typical personas within the market, buying habits, conversion rates and more.
    1. US Census Bureau and the US Bureau of Labor Statistics (public market data)
    2. Research agencies: Pew, Forrester and Gartner for a wide span of market reports
    3.  Industry content sites (news and blog sites particular to a niche. Ex: Ars Technica for tech and IT; Mashable for tech, culture, science; Product Hunt for sharing and discovering new products; etc.)
  3. Then, study your competitors closely.
  4. Identify direct and indirect competitors:
    1. Direct competitors: Businesses with products/services that closely resemble your own and can substitute yours.
    2. Indirect competitors: Businesses with relatively similar products/services, but cannot fully substitute one another.
    3. Find the potential weaknesses in your competitors’ offerings, or learn how to use their strengths to improve your own.
    4. Parse through their websites to understand their pricing, customers and content.
    5. Research their sales channels and social media.
    6. Use specific tools for competitor analysis (SEMRush, Nielsen, Klue.com, etc.)
  5. Finally, store all the findings on your market (the specific niche, and competitors) into an organized and comprehensive document such as a presentation for current and ongoing reference. This is going to be your market knowledge base.

Understanding Your Customers and Potential Customers

Now that you have aggregated a slew of research within your industry and competitors, it’s time to do a deeper delve into your market research. This latter stage is all about your customers: current customs, those in a nurturing stage and all other potential customers.

That’s where primary sources come largely into play. We’ve covered secondary sources and how they can help you research your overall market, but now, it’s time to understand your target market.

A target market is a group of people that a company targets as the primary buyers of their product/service. This is the group on whom a company focuses all of its marketing initiatives. This is the main group of a market, as it is the one most likely to make purchases and become loyal customers.

There are two types of primary sources: exploratory primary sources and specific primary sources. Both of these are necessary to render a clear understanding of your target market.

Here is how to continue your market research by investigating your target market:

  1. Preface the makeup of your target market via the secondary research you’ve conducted in the first half of the article. This will give you a general sense of who your target market is.
  2. To fully understand your target market, switch to primary sources to understand the full scope of your target market and cater to them the right way.
    1. Run exploratory primary research on your target market. This involves conducting:
      1. open-ended interviews over the phone or in-person
      2. surveys with a small amount of respondents
      3. surveys that cover the entirety of your target market

3. Identify issues and potential opportunities to study within your target market.

4. Use these topics to narrow into the specifics of your target market with specific primary sources.

    1. Create surveys that focus on specific segments of your target market.
    2. Focus on questions aimed at solving points of friction or problems

Closing Up on Setting Market Research in Motion

Aside from understanding your customers’ preferences, needs and problems, it is of utmost importance to first understand them from a demographics perspective. As highlighted in Step 1, you can gather some qualities about your target market from secondary sources. But it’s only a primer and far from giving you the full picture.

Surveys, on the other hand, give startups a major advantage over secondary data and even other primary sources such as focus groups. This is because you control all the questions you collect on your subjects. This includes demographics data such as age, location, gender, education and income level, ethnic background, marital status and more.

A twofold market research tool, surveys also grant you access into the minds of your target audience. Again, this is because you are in control of conceiving all the questions about your target market.

Understanding what in particular your customers’ desire and how they generally think will empower your market research efforts and business in general to stay ahead of the curve. It will assure that you know how to properly market to your customers.

 


Market Research Guide for Advertising

Market Research Guide for Advertising

Although a major subsector of marketing, advertising is often treated as a secondary task, one with a scarce backup of data to deliver outstanding ad campaigns. To add insult to injury, a sweeping 76% of marketers in 2020 did not rely on behavioral data for ad targeting.

This is dismal news, given the fact that despite being barraged with 1,700 ads per month, users only view half of them. It occurs in the face of a costly worldwide ad expenditure, which is forecasted to reach $375 billion by 2021.

Market research is therefore undoubtedly necessary. A wide-spanning umbrella term, it refers to collecting and analyzing data about your target market and your competitors, along with the traits, trends and changes in the overall market you serve.

Consequently, it is evident that advertising requires its own market research. This guide will teach you how to carry out market research for advertising.

Advertising Market Research at a Glance

Advertising market research is a form of research concentrated on advertising campaigns. As such, its ultimate aim is to identify the most effective ads within a company’s target market.

The process of market research for advertising includes pre-campaign efforts as well as post-campaign scrutiny. This includes setting up advertising campaigns, narrowing in on your target market, deducing which ads are best and measuring the success of your ad campaigns.

You’ll find that market research plays a critical role in each stage of this advertising development process. Let’s get a more thorough rundown to learn how to set up an effective advertising campaign through market research tailored specifically towards it.

Pre-Campaign Market Research: Setting Up Your Ad Campaign

We caution you to never jump headfirst into an advertising campaign. Before running a campaign, you must set it up through planning. Pre-campaign efforts include three stages, all of which are fueled by market research.

Here are the first three stages:

Stage 1: Acquire a deep understanding of your target market.

You cannot lay the groundwork for an ad campaign before you understand who your target market is, along with the different segments it encompasses. By understanding these groups, you’ll be able to create general ads that target the entirety of your target audience, along with ads tailored more towards the different segments within your target market. Here is what you will need to nail down both of these groups:

  1. Set up a survey that covers a wide net of demographics. Ask questions to gauge which demographics show the most interest in your brand.

  2. Determine which demographics show the most favorability towards your brand, offering or messaging. This is your target market.

  3. Arrange psychographic surveys across the demographics most conducive to buying from you. This will give you direct insight into the psyche into specific demographics, revealing the different segments within your target market.

Stage 2: Set Up Micro and Macro Advertising Campaign Objectives

Now that you’ve nailed down your target market and have zeroed in on the different segments within it, you can begin planning your advertising campaign. Each campaign, sub-campaign and ad itself will require an objective.

Otherwise, you won’t know how to measure the performance and success of each component of your campaign(s). Here are the objectives to focus on and how to do so:

  1. Pin down the purpose of a new campaign. Or do so with a number of campaigns. Typically, an advertising campaign seeks to:

    1. to inform your target market about a new offering.

    2. to persuade consumers to convert (either by buying, subscribing, signing up for the new or existing offering).

    3. to remind your target market where and how to access the offering.

  2. Find the proper media channels to deliver your advertisements. Think about the purpose of your campaign; can a particular channel deliver it best, or perhaps, can it do so partially?

  3. Collect secondary research on your target market. This will help you discover which advertising channels work well across general target markets.

  4. Collect primary research by creating surveys that unveil the messaging preferences of each segment of your target market.

  5. Narrow down the advertising channels for your campaign. These include:

    1. Display ads (landing pages, pop-ups, banners)

    2. Social media ads

    3. PLA ads (via Google Adwords or Criteo)

    4. Native Ads

    5. PPC

Stage 3: Set Up a Budget for Your Advertising Campaign

The shortest stage within the advertising research and development process — although not trivial in the slightest — setting up a budget is necessary before you do any conceptualizing.

Market Research During the Campaign

Following the first three pre-campaign, pre-planning stages, we move along to the campaign itself. Now that you’ve done the market research on your target audience, set campaign and sub-campaign objectives and set a budget, you can start conceptualizing the operation itself.

Here is how to proceed:

Stage 4: Create the Central Messaging Behind Your Campaign

  1. Decide on a concept; it can be a theme or a central narrative to all your ads.

  2. Make sure your idea is precisely targeted to your target market, along with the segments of your target market.

  3. Next, create the ads themselves. An ad should possess the following qualities:

    1. Relevance to the target audience

    2. Value in purchasing and using

    3. Uniqueness to set yourself apart from competitors

    4. Credibility — your customers should believe your ad, don’t make it seem too good to be true.

  4. Get into the nitty grid of your sub-campaigns and ads themselves

    1. Decide which channels you chose previously work best for which ad type

    2. Decide what to incorporate into each medium (ex: do you need a video in each medium or only copy, etc.)

    3. Based on the surveys you’ve run, decide which ads to expose to particular segments of your target market. You can add more surveys for research purposes.

    4. Set a frequency, ie, how many times your audience will receive your ads

  5. Launch your advertising campaign

Post-Campaign Efforts

Market research doesn’t end after you launch your advertising campaign. Its performance gives you another great opportunity to study your target market, along with your ensuing marketing efforts.

It will also inform your new campaigns and new ads as part of your current, ongoing one. This brings us to the final stage.

Stage 5: Keep Track of Your Advertising Performance

Tracking the effectiveness of an advertising campaign will differ based on the KPIs you set. These will depend largely on the medium you use to distribute your ads.

  1. Attribute several KPIs to monitor during your campaign. Here are some to consider:

    1. Conversions

    2. Return on Ad Spent (ROAS)

    3. Cost Per 1,000 Impressions

    4. Impressions

    5. Cost per click (CPC)

    6. Click-Through Rate (CTR)

    7. Cost Per Acquisition (CPA)

  2. Observe these KPIs daily on a web analytics platform like Google Analytics or Adobe Analytics. Or, set up your campaign and track it on a specialized platform like Adroll.

  3. Create surveys that target the same segments from your campaign. These can help you see how your customer base reacts to them.

    1. Test them on images (preferences on 1 over the other).

    2. Ask them questions to expand and refine the current campaign.

    3. Come up with questions for new campaign ideation.

Closing off on Market Research for Ads

After Stage 5, you should have established a familiarity with your target market and your industry, to a certain extent. With all this data, you can go about new ad campaigns armed with this new customer knowledge. More importantly, the market research you’ve picked up during this process will inform all of your marketing efforts.

After all, the purpose of this research is to equip your brand with a deep understanding of your customers to make smarter business decisions. After gathering enough market research, you may try going bold in your next advertising venture.