How to Do Market Research for a Startup

Marketing trends come and go, but the principles of good business remain. One of the most elementary concepts brought up when starting a business is the four P’s: price, product, promotion, and place. Some investors want to see a breakdown of the four P’s before they agree to fund a startup, and many marketing campaigns are built with these elements in mind.

The best way to fill out the four P’s and create a promotion plan for your business is with market research. The right knowledge and customer insight can help you choose the best location for your business as well as the price points your customers are willing to pay. Keep reading to learn how to do market research for a startup so that you can launch your brand with confidence.

Find the Customers You Are Trying to Reach

There are several tactics you can try to do market research for your startup, but you can’t execute them properly until you find your customer base. There are a few key questions that you should ask to determine the best channels for finding your customers:

  • Are you operating a B2C (business-to-consumer) or B2B (business-to-business) company?
  • Who is your average customer? What ages and genders are you trying to attract?
  • Do your customers have any special demographics, interests, hobbies, or political beliefs?
  • What is the income range of your target market?

These questions will help you determine where to find your customers and how you should connect with them. For example, a B2B brand for a niche industry might be better off contacting customers through LinkedIn and other professional networking tools than posting surveys or connecting with people on Facebook or Instagram.

Once you have your target demographics, determine where they are online. Social media use varies by age, demographic, and goals. You will need to go where your audience is in order to reach them.

Test Engagement and Interest Through Paid Ads

If you are looking to get fast and unbiased feedback on your product and brand, consider launching some paid ads on social media channels like Twitter, Facebook, and Instagram. You can also use Google Ads and Bing Ads to see how your target demographic responds to your copy, brand name, and value proposition.

You can set the budget for these ads and track your results in real-time. A few metrics to consider when running your ads include:

  • Engagement rate: Do people view, click, comment on, and like your ads?
  • Click-thru rate: Do customers actively want to visit your website and learn more?
  • Bounce rate: When people visit your website, do they stick around (providing the marketing efforts are relevant), or do they immediately leave?
  • Quality score: Google offers a score that reports how relevant and thoughtful the ads are. Look for a high quality score.

These ads can provide quantitative data on your customers and how they engage with your brand. You can also use A/B testing on different campaigns and ad copy to see which ones perform better.

Conduct Interviews and Focus Groups

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One of the biggest challenges with data is that it can be misread. You might think an upward trend means one thing, but it could mean something totally different without the right context. Qualitative data provides this context, and while it is harder to get, it is an important part of market research.

There are multiple ways to get qualitative data for your startup. One of the easiest ways is to pull in a few customers and interview them. You don’t have to promote your product or even mention your brand — just get to know their needs and pain points. You can also do this in small batches with focus groups. To get a more impartial view, consider getting an outside company to ask unbiased questions to help you learn about your audience.

Create Surveys for Your Target Demographic

Surveys fall at the intersection of focus groups and targeted ads. You can collect hard, quantitative data from multiple-choice questions and sentiment analyses while also learning about your customers through qualitative methods like open-ended questions and word association.

You don’t need to have a large following to send out an effective survey, either. You can use a survey software tool that scours the country (or just your region) to reach people and asks them to complete your questionnaire. This allows you to reach a large number of people in a short period of time.

Work with a Professional Customer Development Company

You don’t need to be an expert in psychology and the customer experience to conduct market research — you don’t even need the time and bandwidth to conduct the research on your own. Consider working with a company that specializes in getting to know your target customers and putting together insights and personas related to who would buy your products.

For example, the team at Innovation Within starts with a hypothesis of who you think your customers are and what value you are providing to them. Then, through quantitative data and qualitative research, they can confirm this hypothesis or learn the realities of your product and plan. The process that Innovation Within uses is called Customer Discovery, and it’s based on the idea that you should challenge all assumptions you have about your customers and their behavior.

By working with an expert company, you can get the insight you need before investing time and energy in promoting your products to the wrong group of people or selling your products the wrong way.

Find Partners Who Can Turn Your Research Into a Reality

Once you have the market research in hand and have confidently built out your four P’s, it’s time to launch your vision, open your doors, and sell your products to your customers. With the right business partners, you can grow your brand and scale out your operations.

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