market research where to start

Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

Updated: 02/21/24

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

• Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

Free Market Research Kit

• SWOT Analysis Template
• Survey Template
• Focus Group Template

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Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

• Where your target audience and current customers conduct their product or service research
• Which of your competitors your target audience looks to for information, options, or purchases
• What's trending in your industry and in the eyes of your buyer
• Who makes up your market and what their challenges are
• What influences purchases and conversions among your target audience
• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there‘s demand for the business initiatives you’re investing in
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

• Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
• Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

• Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
• Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
• Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
• Focus Groups
• Product/ Service Use Research
• Observation-Based Research
• Buyer Persona Research
• Market Segmentation Research
• Pricing Research
• Competitive Analysis Research
• Customer Satisfaction and Loyalty Research
• Brand Awareness Research
• Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

• Define your buyer persona.
• Identify a persona group to engage.
• Prepare research questions for your market research participants.
• List your primary competitors.
• Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

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Written by Mary Kate Miller | June 1, 2021

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

• Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
• Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
• Validate a concept prior to launch.
• Identify gaps in the market that your competitors have created or overlooked.
• Solve problems that have been left unresolved by the existing product/brand offerings.
• Identify opportunities and solutions for new products or services.
• Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

• Strengthen your market position.
• Help you identify your strengths and weaknesses.
• Help you identify your competitors’ strengths and weaknesses.
• Minimize risk.
• Center your customers’ experience from the get-go.
• Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

• What are you hoping to discover through your research?
• Who are you hoping to serve better because of your findings?
• What do you think your market is?
• Who are your competitors?
• Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
• Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

• Current customers
• Past customers
• Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

• “What is your age?”
• “Where do you live?”
• “What is your gender identity?”
• “What is your household income?”
• “What is your household size?”
• “What do you do for a living?”
• “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

• “How well does/would our product/service meet your needs?”
• “How does our product/service compare to similar products/services that you use?”
• “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

• “What are your biggest challenges?”
• “What’s most important to you?”
• “What do you do for fun (hobbies, interests, activities)?”
• “Where do you seek new information when researching a new product?”
• “How do you like to make purchases?”
• “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

• Steps for conducting market research
• Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

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How to Conduct Market Research for a Startup

• 17 Mar 2022

With every innovative product idea comes the pressing question: “Will people want to buy it?”

As an entrepreneur with a big idea, what’s the best way to determine how potential customers will react to your product? Conducting market research can provide the data needed to decide whether your product fits your target market.

Before launching a new venture, you should understand market research. Here’s how to conduct market research for a startup and why it’s important.

Access your free e-book today.

What Is Market Research?

Market research is the process of gathering information about customers and the market as a whole to determine a product or service’s viability. Market research includes interviews, surveys, focus groups, and industry data analyses.

The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors’ offerings.

There are two types of research you can conduct: primary and secondary.

• Primary research requires collecting data to learn about your specific customers or target market segment. It’s useful for creating buyer personas, segmenting your market, and improving your product to cater to customers’ needs .
• Secondary research is conducted using data you didn’t collect yourself. Industry reports, public databases, and other companies’ proprietary data can be used to gain insights into your target market segment and industry.

Why Is Market Research Important for Entrepreneurs?

Before launching your venture, it’s wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product.

Performing market research can also help you determine a pricing strategy by gauging customers’ willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers.

When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you’ve taken the time to iterate on and improve it signal that your startup could be a worthwhile investment.

Related: How to Talk to Potential Investors: 5 Tips

How to Do Market Research for a Startup

1. form hypotheses.

What questions do you aim to answer through market research? Using those questions, you can make predictions called hypotheses . Defining your hypotheses upfront can help guide your approach to selecting subjects, researching questions, and testing designs.

An example question you may ask is: “How much are people in my target demographic willing to pay for the current version of my product?” Your hypothesis could be: “If my product contains all its current features, customers will be willing to pay $500 for it.”

Another example question you may ask is: “What’s the user’s biggest pain point, and is my product meeting their needs?” Your hypothesis could be: “I believe the user’s biggest pain point is needing an easy, unintimidating way to learn basic car maintenance, and I predict that my product meets that need.”

You can and should test multiple hypotheses, but try to select no more than a few per test, so the research stays focused.

Related: A Beginner’s Guide to Hypothesis Testing in Business

2. Select the Type of Research Needed to Test Hypotheses

Once you’ve formed your hypotheses, determine which type of research to conduct.

If your hypotheses focus on determining your startup’s place in the broader market, start with secondary research. This can include using existing data to determine market size, how much of that market your startup could reasonably own, who your biggest competitors are, and how your brand and product compare to theirs.

If your hypotheses require primary research, decide which data collection method best fits your needs. These can include one-on-one interviews, surveys, focus groups, and polls. Primary research allows you to gather insights into customer satisfaction and loyalty, brand awareness and perception, and real-time product usability.

3. Identify Target Demographics and Recruit Subjects

To gather meaningful insights, you need to understand your target demographic. Do you aim to cater to working parents, young athletes, or pet owners? Determine the type of person who can benefit from your product.

If you conduct primary research, you need to recruit subjects. This can be done in several ways, including:

• Word of mouth: The simplest but least reliable way to recruit participants is by word of mouth. Ask people you know to refer others to be research subjects, then screen them to confirm they fit your target demographic.
• Promoting the study on social media: Many social media platforms enable you to show an ad to people who fall into specific demographic categories or have certain interests. This allows you to get the word out to a large number of people who qualify.
• Hiring a third-party market research company: Some companies provide full market research services and recruit participants and conduct research on your behalf.

However you recruit subjects, ensure they take a screener survey beforehand, which allows you to determine whether they fit the specific demographic you want to study or have a trait that eliminates them from the research pool. It also provides demographic data—such as age and race—that enables you to select a diverse subset of your target demographic.

In addition, you can offer compensation to boost participation, such as money, meal vouchers, gift cards, or early access to your product. Make it clear that compensation is in appreciation for subjects’ time and honest feedback.

4. Conduct the Research

Once you’ve determined the type of research and target demographic necessary to test your hypotheses, conduct your research. To reduce bias, enlist someone unfamiliar with your hypotheses to perform interviews or lead focus groups.

Ask questions based on your audience and hypotheses. For instance, if you’re aiming to test existing customers’ purchase motivations, you may ask: “What challenge were you trying to solve when you first bought the product?”

If examining brand perception, your audience should consist of potential customers who don’t yet know your brand. Present them with a list of competitor logos—with yours in the mix—and ask them to rank the brands by perceived reliability.

While the questions you ask are vehicles to prove or disprove hypotheses, ensure they don’t lead subjects in one direction. To craft unbiased research questions , use neutral language and vary the order of options in multiple-choice questions. This can keep subjects from selecting the same option each time if they sense the third option is always mapped to a certain outcome. It also helps account for primacy bias (the tendency to select the first option in a list) and recency bias (the tendency to select the final option in a list).

Once you’ve collected data, ensure it’s organized efficiently and securely so you can protect subjects’ identities .

Related: 3 Examples of Bad Survey Questions and How to Fix Them

5. Gather Insights and Determine Action Items

After you’ve organized your data, analyze it to extract actionable insights. While some of the data will be qualitative rather than quantitative, you can detect patterns in responses to make it quantifiable. For instance, noting that 15 of 20 subjects mentioned feeling overwhelmed when attempting to assemble your product.

Once you’ve analyzed the data and communicated emerging trends using data visualizations , outline action items.

If the majority of users in your target demographic reported feeling overwhelmed while assembling your product, action items might include:

• Creating different versions of assembly instructions to test with other groups, varying diagrams and instructional language
• Researching instruction manual best practices

Each round of market research can offer more information about how your product is perceived and experienced by potential users.

Market Research as an Ongoing Endeavor

While it’s useful to conduct market research before launching your product, you should revisit your hypotheses and form new ones over the course of building your venture.

By conducting market research with each version of your product, you can gradually improve it and ensure it continues to fit target customers’ needs.

Are you interested in bolstering your entrepreneurship skills? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world.

About the Author

How to Conduct Market Research for Startups

With 50% of new businesses failing within the first five years of operation, startups need to develop a deep understanding of their customer base quickly in order to thrive. Successful new business ventures strategically begin by gathering accurate and thorough information about their industry to identify the best path ahead. Conducting market research for startups is a key step toward meeting customer needs and strengthening marketing messaging.

Market research brings together important details about a business's customers, competition, and industry. The results serve as a tool in a startup’s business planning process as it evolves. Analyzing the findings can help determine the viability of a business concept and identify areas for adjustment to improve performance, profitability, and attract investors.

“Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.” Dr. Elaine Young, Champlain College Online

As noted by Dr. Elaine Young , professor and program director of marketing communication at Champlain College Online, “Startups need market research so that they can gain insight into the behaviors and values of their target customers. Just because you think your startup idea is amazing, doesn't mean that consumers will. Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.”

Table of Contents

What is market research?

Why is it valuable for startups, types of market research, methods of market research, how to do market research for startups, sample questions to ask customers.

Market research is defined as the process of collecting, analyzing, and interpreting a broad set of information about a specific market or industry. The research might focus on:

• A potential product or service for that market
• Existing and/or potential customers for the product or service
• The needs, purchase habits, characteristics, and location of your target market
• Competitors in your industry
• Trends within your market or industry as a whole

As a business strategy, market research enables companies to make actionable decisions according to data-based findings. These measurable statistics can be gathered through a variety of methods, which we will explore below.

Startups benefit from market research in multiple ways. With so much time, energy, and funds invested in a startup, taking steps to strengthen the concept and connection to your target audience is critical to survival and the bottom line. 

The market research process delivers value to startups by:

• Allowing you to test the ideas and concepts behind your product or service
• Enticing investors with data showing the projected profitability of your venture 
• Providing statistical evidence to potentially support your business concept or encourage you to adapt it to better meet the needs of your target market
• Helping to clarify exactly who your customers are
• Serving as evidence to investors of an entrepreneur’s commitment to improving a business based on current market conditions
• Increasing the odds of   success of your startup

“Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience.”

Adrienne Wallace, Grand Valley State University

The American Marketing Association confirms that market research can directly increase your bottom line. And trusted market research findings can also speed up the process of getting investors on board with your startup venture.

“Startups can't begin with just a hope and a prayer,” notes Adrienne Wallace , associate professor at Grand Valley State University. “Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience instead of making the age-old error of ‘everyone is the target’ because it simply can't be that for efforts to be fruitful.”

There are two types of market research used most in the business world today: primary and secondary. They can be used individually but are often combined to create a broader understanding of your target market.

Primary research

Primary research involves collecting data directly from your target market. This is often achieved through the use of surveys, interviews, and focus groups. The findings can provide a comprehensive understanding of your customer base’s needs and preferences.

Secondary research

Secondary research requires examining existing data collected by third parties. Examples of potential data sources include news media, industry reports, proprietary data from other companies, academic journals, or public databases. Although targeted data is not always available for your particular industry, secondary research enables you to gain insight and understanding about an industry overall.

Choosing a specific method of market research — either quantitative or qualitative — will determine the type of data collected in your research.

Quantitative research

Quantitative market research gathers large numerical datasets that can be used in statistical analysis. These results offer more accurate snapshots of industry trends and market challenges. Common methods of collecting quantitative research data are through surveys, questionnaires, and polls.

Qualitative research

Qualitative market research strives to identify the reasons behind customers’ buying habits, as well as their needs, wants, and overall customer satisfaction . These results can help clarify the “why” behind your target market’s behaviors and feelings. Focus groups, in-depth interviews, and online bulletin boards are typical methods for conducting qualitative market research.

Generally, quantitative market research is more commonly utilized than qualitative market research because it is more scientific, unbiased, and more easily plicated in future studies. In 2019, 61% of the money spent on market research in the United States went toward quantitative research, with only 12% spent on qualitative research.

Conducting market research is not a quick process, so it requires thoughtful planning. You may handle this research on your own or hire a third-party market research company to manage the process on your behalf. The steps below will guide you through developing a market research strategy that benefits your startup.

Step 1. Define your research purpose

The first step in market research for startups is to determine what questions you hope to answer through this research. From those questions, you can develop projected results that will help reveal the overall purpose of your research. Understanding the purpose from the beginning will be an asset in identifying the best approach to selecting subjects, composing questions, and testing product designs.

Examples of market research purpose include:

• Confirming consumers’ biggest pain point and whether your product meets their needs
• Tracking and predicting relevant industry trends
• Determining consumer spending capacity for a product/service
• Gauging the market infiltration of your competitors

Step 2. Study your target market and competitors closely

It’s important to take time to study existing information about your target market, your competitors, and your target demographic. Growing your knowledge base about all of these factors in advance will strengthen the relevancy of your research.

When working on demographics, a buyer persona template can be a useful tool to help segment the consumer audience into smaller groups for better targeting. Understanding each group’s behaviors and motivation can lead to research findings that resonate deeply with your customer base.

Step 3. Choose the right type and method for your needs

The best type of market research for your business will depend on the purpose you aim to achieve. If your goal is a broad-scope industry view, secondary research examining existing data may provide you with all the information you need. But if your strategy is to clarify specific details about your customer base, you will need to collect new data through primary research. 

The ideal method for data collection also depends on the end goal. Quantitative research methods such as surveys create data useful in making market predictions. Qualitative research methods like focus groups and in-depth interviews offer more personal and subjective responses from participants. Such responses are valuable when seeking direct consumer insight on your product or service and on brand awareness.

Step 4. Recruit appropriate research subjects

If you are pursuing primary research, the subjects involved in your study should be capable of providing insights that are directly relevant and valuable to your market research goals. Recruitment methods can vary from social media posts to hiring third-party market research firms and incentivizing participation.

Seek out existing customers, former customers, and potential customers to create a full spectrum view of your market and product. Other potential sources for research participants include:

• Recent customers
• Customers who did not complete their purchase
• Word of mouth among both personal and professional networks 

Step 5. Conduct your research

Execute your market research plan based on the method you identified in Step 3. Appoint someone not deeply connected with the project planning as the point person for interviews or focus groups in an effort to reduce potential bias. When creating surveys, strive to incorporate neutral (non-leading) language as a way to craft unbiased research questions.

Christina Inge , an instructor and curriculum designer at Northeastern University, suggests an effective research technique called customer discovery. “It requires asking customers what their needs are,” she says, “rather than showing them your product or service and asking for their reactions. This can help you get to the heart of what your customers need, leading to better product market fit, faster.”

Step 6. Analyze your results

Once you’ve collected and organized all of your data, analyze it for relevant trends and patterns. Any qualitative data, such as feedback from focus groups or interviews, can be interpreted quantitatively by noting response ratios amongst the participants. Examine your findings for insights that offer actionable next steps.

One famous example of a startup that pivoted toward success as a result of closely analyzing the market research on their target market is Tune In Hook Up. As an online video dating site that wasn’t seeing much traffic, their research revealed that users struggled to share videos easily with one another. Based on their findings, they decided to shift away from romance and focus on the videos, renaming themselves YouTube.

Step 7. Create an actionable report from your findings

Gather your findings into a report that outlines the recommended actions necessary to address the market research results. Whether the data provides positive or negative insights, you should always come away with actionable steps and suggestions for the next stage of your startup.

Find additional tips and a free report template in HubSpot’s’ How To Do Market Research: A Guide and Template .

Drafting market research questions for startups is not an exact science because cookie-cutter surveys and interview questions will not work. Every product, service, and industry has unique features that require tailored language in each research question. 

Below is a sampling of the type of questions you may want to consider: 

• What do you like most about our new product or service?
• What do you wish our product or service did that it does not currently do?
• What do you lose sleep over at night?
• What price would you consider so low that you’d question this product’s overall quality?
• Which of these companies have you purchased this product from in the past six months? (list of competitors)

Market research is a booming industry around the globe, but nowhere more so than in the United States. The U.S. is the leading country for market research services , with the industry bringing in $18.75 billion in 2020, more than six times the industry-related revenue of any other country in the world. It’s no surprise, considering how quality market research can directly impact a company’s bottom line and growth. Free kits for growth marketing can help you get moving on the road to success through market research for startups.

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How to do market research in 4 steps: a lean approach to marketing research

From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.

Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples. 

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A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.

In this article, you’ll learn how to conduct quick, effective market research  using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.

How to conduct lean market research in 4 steps

What is market research, why is market research so valuable, advantages of lean market research, 4 common market research methods, 5 common market research questions, market research faqs.

We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf , a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.

Research your market the lean way...

From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.

The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.

1. Create simple user personas

A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile .

How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.

How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:

Who are they?

What is their main goal?

What is their main barrier to achieving this goal?

Pitfalls to avoid:

Don’t ask too many questions! Keep it to five or less, otherwise you’ll inundate them and they’ll stop answering thoughtfully.

Don’t worry too much about typical demographic questions like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.

Next, they used the survey results to create simple user personas like this one for admins:

Who are they? Administrative Assistants.

What is their main goal? Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.

What is their main barrier to achieving it? Converting a scanned PDF doc to a Word file.

💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words. 

You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email. 

We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

Overt observation involves asking customers if they’ll let you watch them use your product. This method is often used for user testing and it provides a great opportunity for collecting live product or customer feedback .

Covert observation means studying users ‘in the wild’ without them knowing. This method works well if you sell a type of product that people use regularly, and it offers the purest observational data because people often behave differently when they know they’re being watched. 

Tips to do it right:

Record an entry in your field notes, along with a timestamp, each time an action or event occurs.

Make note of the users' workflow, capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

Don’t record identifiable video or audio data without consent. If recording people using your product is helpful for achieving your research goal, make sure all participants are informed and agree to the terms.

Don’t forget to explain why you’d like to observe them (for overt observation). People are more likely to cooperate if you tell them you want to improve the product.

💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website. 

Observe how customers navigate your pages and products to gain an inside look into their user behavior . This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion .

With Hotjar Recordings you can observe real people using your site without capturing their sensitive information

How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.

Observing students (covert): Kristina Wagner, Principle Product Manager at Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance. One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e, the self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).

Observing administrative assistants (overt): Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. While watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”

3. Conduct individual interviews

Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.

Listen more, talk less. Be curious.

Act like a journalist, not a salesperson. Rather than trying to talk your company up, ask people about their lives, their needs, their frustrations, and how a product like yours could help.

Ask "why?" so you can dig deeper. Get into the specifics and learn about their past behavior.

Record the conversation. Focus on the conversation and avoid relying solely on notes by recording the interview. There are plenty of services that will transcribe recorded conversations for a good price (including Hotjar!).

Avoid asking leading questions , which reveal bias on your part and pushes respondents to answer in a certain direction (e.g. “Have you taken advantage of the amazing new features we just released?).

Don't ask loaded questions , which sneak in an assumption which, if untrue, would make it impossible to answer honestly. For example, we can’t ask you, “What did you find most useful about this article?” without asking whether you found the article useful in the first place.

Be cautious when asking opinions about the future (or predictions of future behavior). Studies suggest that people aren’t very good at predicting their future behavior. This is due to several cognitive biases, from the misguided exceptionalism bias (we’re good at guessing what others will do, but we somehow think we’re different), to the optimism bias (which makes us see things with rose-colored glasses), to the ‘illusion of control’ (which makes us forget the role of randomness in future events).

How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.

A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.

💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage , which automates the entire interview process, from recruitment and scheduling to hosting and recording.

You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.

4. Analyze the data (without drowning in it)

The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.

A flow model is a diagram that tracks the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better assess their needs.

You’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.

Affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.

We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).

“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”

Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.

Hotjar lets you easily share survey responses with your team

Customer journey map

A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).

The above  customer journey map , created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.

📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.

Next steps: from research to results

So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.

Implement changes

Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.

We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake. 

In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.

Measure results

According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.

Smallpdf’s changes produced:

A 75% reduction in error rate for the ‘PDF to Word’ converter

A 1% increase in NPS

Greater confidence in the team’s marketing efforts

"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”

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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.

With Hotjar, they did things differently . Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.

Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters:

Obsessing over your users is the only way to win. If you don’t care deeply about them, you’ll lose potential customers to someone who does.

Analytics gives you the ‘what’, while research gives you the ‘why’. Big data, user analytics , and dashboards can tell you what people do at scale, but only research can tell you what they’re thinking and why they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.

Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning, death by best practices , and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and focusing on their customer experience , you’re less likely to get pulled in the wrong direction.

Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and product features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you’ll likely need to make changes once your untested business plan gets put into practice.

Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.

Lean market research can help you become more...

Efficient: it gets you closer to your customers, faster.

Cost-effective: no need to hire an expensive marketing firm to get things started.

Competitive: quick, powerful insights can place your products on the cutting edge.

As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research , surveys proved to be the most commonly used market research technique.

What makes online surveys so popular?  

They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.

💡 Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds . Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions. 

Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.

An example research report generated by Hotjar AI for Surveys

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater empathy for their experience , and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most unreliable

Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, or marketing message to gain deeper insights.

What makes focus groups so unreliable?

If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive , and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.

The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).

It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.

2. What does your day look like?

This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.

3. Do you ever purchase [product/service type]?

This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.

4. What problem were you trying to solve or what goal were you trying to achieve?

This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.

5. Take me back to the day when you first decided you needed to solve this kind of problem or achieve this goal.

This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute . It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.

If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.

“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”

— Adele Revella , Founder/CEO at Buyer Persona Institute

Bonus question: is there anything else you’d like to tell me?

This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.

That’s why Sarah Doody, author of UX Notebook , adds it to the end of her written surveys.

“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”

What is the difference between qualitative and quantitative research?

Qualitative research asks questions that can’t be reduced to a number, such as, “What is your job title?” or “What did you like most about your customer service experience?” 

Quantitative research asks questions that can be answered with a numeric value, such as, “What is your annual salary?” or “How was your customer service experience on a scale of 1-5?”

 → Read more about the differences between qualitative and quantitative user research .

How do I do my own market research?

You can do your own quick and effective market research by 

Surveying your customers

Building user personas

Studying your users through interviews and observation

Wrapping your head around your data with tools like flow models, affinity diagrams, and customer journey maps

What is the difference between market research and user research?

Market research takes a broad look at potential customers—what problems they’re trying to solve, their buying experience, and overall demand. User research, on the other hand, is more narrowly focused on the use (and usability ) of specific products.

What are the main criticisms of market research?

Many marketing professionals are critical of market research because it can be expensive and time-consuming. It’s often easier to convince your CEO or CMO to let you do lean market research rather than something more extensive because you can do it yourself. It also gives you quick answers so you can stay ahead of the competition.

Do I need a market research firm to get reliable data?

Absolutely not! In fact, we recommend that you start small and do it yourself in the beginning. By following a lean market research strategy, you can uncover some solid insights about your clients. Then you can make changes, test them out, and see whether the results are positive. This is an excellent strategy for making quick changes and remaining competitive.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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Market research definition

Market research – in-house or outsourced, market research in the age of data, when to use market research.

• Types of market research 

Different types of primary research

How to do market research (primary data), how to do secondary market research, communicating your market research findings, choose the right platform for your market research, try qualtrics for free, the ultimate guide to market research: how to conduct it like a pro.

27 min read Wondering how to do market research? Or even where to start learning about it? Use our ultimate guide to understand the basics and discover how you can use market research to help your business.

Market research is the practice of gathering information about the needs and preferences of your target audience – potential consumers of your product.

When you understand how your target consumer feels and behaves, you can then take steps to meet their needs and mitigate the risk of an experience gap – where there is a shortfall between what a consumer expects you to deliver and what you actually deliver. Market research can also help you keep abreast of what your competitors are offering, which in turn will affect what your customers expect from you.

Market research connects with every aspect of a business – including brand , product , customer service , marketing and sales.

Market research generally focuses on understanding:

• The consumer (current customers, past customers, non-customers, influencers))
• The company (product or service design, promotion, pricing, placement, service, sales)
• The competitors (and how their market offerings interact in the market environment)
• The industry overall (whether it’s growing or moving in a certain direction)

Free eBook: 2024 market research trends report

Why is market research important?

A successful business relies on understanding what like, what they dislike, what they need and what messaging they will respond to. Businesses also need to understand their competition to identify opportunities to differentiate their products and services from other companies.

Today’s business leaders face an endless stream of decisions around target markets, pricing, promotion, distribution channels, and product features and benefits . They must account for all the factors involved, and there are market research studies and methodologies strategically designed to capture meaningful data to inform every choice. It can be a daunting task.

Market research allows companies to make data-driven decisions to drive growth and innovation.

What happens when you don’t do market research?

Without market research, business decisions are based at best on past consumer behavior, economic indicators, or at worst, on gut feel. Decisions are made in a bubble without thought to what the competition is doing. An important aim of market research is to remove subjective opinions when making business decisions. As a brand you are there to serve your customers, not personal preferences within the company. You are far more likely to be successful if you know the difference, and market research will help make sure your decisions are insight-driven.

Traditionally there have been specialist market researchers who are very good at what they do, and businesses have been reliant on their ability to do it. Market research specialists will always be an important part of the industry, as most brands are limited by their internal capacity, expertise and budgets and need to outsource at least some aspects of the work.

However, the market research external agency model has meant that brands struggled to keep up with the pace of change. Their customers would suffer because their needs were not being wholly met with point-in-time market research.

Businesses looking to conduct market research have to tackle many questions –

• Who are my consumers, and how should I segment and prioritize them?
• What are they looking for within my category?
• How much are they buying, and what are their purchase triggers, barriers, and buying habits?
• Will my marketing and communications efforts resonate?
• Is my brand healthy ?
• What product features matter most?
• Is my product or service ready for launch?
• Are my pricing and packaging plans optimized?

They all need to be answered, but many businesses have found the process of data collection daunting, time-consuming and expensive. The hardest battle is often knowing where to begin and short-term demands have often taken priority over longer-term projects that require patience to offer return on investment.

Today however, the industry is making huge strides, driven by quickening product cycles, tighter competition and business imperatives around more data-driven decision making. With the emergence of simple, easy to use tools , some degree of in-house market research is now seen as essential, with fewer excuses not to use data to inform your decisions. With greater accessibility to such software, everyone can be an expert regardless of level or experience.

How is this possible?

The art of research hasn’t gone away. It is still a complex job and the volume of data that needs to be analyzed is huge. However with the right tools and support, sophisticated research can look very simple – allowing you to focus on taking action on what matters.

If you’re not yet using technology to augment your in-house market research, now is the time to start.

The most successful brands rely on multiple sources of data to inform their strategy and decision making, from their marketing segmentation to the product features they develop to comments on social media. In fact, there’s tools out there that use machine learning and AI to automate the tracking of what’s people are saying about your brand across all sites.

The emergence of newer and more sophisticated tools and platforms gives brands access to more data sources than ever and how the data is analyzed and used to make decisions. This also increases the speed at which they operate, with minimal lead time allowing brands to be responsive to business conditions and take an agile approach to improvements and opportunities.

Expert partners have an important role in getting the best data, particularly giving access to additional market research know-how, helping you find respondents , fielding surveys and reporting on results.

How do you measure success?

Business activities are usually measured on how well they deliver return on investment (ROI). Since market research doesn’t generate any revenue directly, its success has to be measured by looking at the positive outcomes it drives – happier customers, a healthier brand, and so on.

When changes to your products or your marketing strategy are made as a result of your market research findings, you can compare on a before-and-after basis to see if the knowledge you acted on has delivered value.

Regardless of the function you work within, understanding the consumer is the goal of any market research. To do this, we have to understand what their needs are in order to effectively meet them. If we do that, we are more likely to drive customer satisfaction , and in turn, increase customer retention .

Several metrics and KPIs are used to gauge the success of decisions made from market research results, including

• Brand awareness within the target market
• Share of wallet
• CSAT (customer satisfaction)
• NPS (Net Promoter Score)

You can use market research for almost anything related to your current customers, potential customer base or target market. If you want to find something out from your target audience, it’s likely market research is the answer.

Here are a few of the most common uses:

Buyer segmentation and profiling

Segmentation is a popular technique that separates your target market according to key characteristics, such as behavior, demographic information and social attitudes. Segmentation allows you to create relevant content for your different segments, ideally helping you to better connect with all of them.

Buyer personas are profiles of fictional customers – with real attributes. Buyer personas help you develop products and communications that are right for your different audiences, and can also guide your decision-making process. Buyer personas capture the key characteristics of your customer segments, along with meaningful insights about what they want or need from you. They provide a powerful reminder of consumer attitudes when developing a product or service, a marketing campaign or a new brand direction.

By understanding your buyers and potential customers, including their motivations, needs, and pain points, you can optimize everything from your marketing communications to your products to make sure the right people get the relevant content, at the right time, and via the right channel .

Attitudes and Usage surveys

Attitude & Usage research helps you to grow your brand by providing a detailed understanding of consumers. It helps you understand how consumers use certain products and why, what their needs are, what their preferences are, and what their pain points are. It helps you to find gaps in the market, anticipate future category needs, identify barriers to entry and build accurate go-to-market strategies and business plans.

Marketing strategy

Effective market research is a crucial tool for developing an effective marketing strategy – a company’s plan for how they will promote their products.

It helps marketers look like rock stars by helping them understand the target market to avoid mistakes, stay on message, and predict customer needs . It’s marketing’s job to leverage relevant data to reach the best possible solution  based on the research available. Then, they can implement the solution, modify the solution, and successfully deliver that solution to the market.

Product development

You can conduct market research into how a select group of consumers use and perceive your product – from how they use it through to what they like and dislike about it. Evaluating your strengths and weaknesses early on allows you to focus resources on ideas with the most potential and to gear your product or service design to a specific market.

Chobani’s yogurt pouches are a product optimized through great market research . Using product concept testing – a form of market research – Chobani identified that packaging could negatively impact consumer purchase decisions. The brand made a subtle change, ensuring the item satisfied the needs of consumers. This ability to constantly refine its products for customer needs and preferences has helped Chobani become Australia’s #1 yogurt brand and increase market share.

Pricing decisions

Market research provides businesses with insights to guide pricing decisions too. One of the most powerful tools available to market researchers is conjoint analysis, a form of market research study that uses choice modeling to help brands identify the perfect set of features and price for customers. Another useful tool is the Gabor-Granger method, which helps you identify the highest price consumers are willing to pay for a given product or service.

Brand tracking studies

A company’s brand is one of its most important assets. But unlike other metrics like product sales, it’s not a tangible measure you can simply pull from your system. Regular market research that tracks consumer perceptions of your brand allows you to monitor and optimize your brand strategy in real time, then respond to consumer feedback to help maintain or build your brand with your target customers.

Advertising and communications testing

Advertising campaigns can be expensive, and without pre-testing, they carry risk of falling flat with your target audience. By testing your campaigns, whether it’s the message or the creative, you can understand how consumers respond to your communications before you deploy them so you can make changes in response to consumer feedback before you go live.

Finder, which is one of the world’s fastest-growing online comparison websites, is an example of a brand using market research to inject some analytical rigor into the business. Fueled by great market research, the business lifted brand awareness by 23 percent, boosted NPS by 8 points, and scored record profits – all within 10 weeks.

Competitive analysis

Another key part of developing the right product and communications is understanding your main competitors and how consumers perceive them. You may have looked at their websites and tried out their product or service, but unless you know how consumers perceive them, you won’t have an accurate view of where you stack up in comparison. Understanding their position in the market allows you to identify the strengths you can exploit, as well as any weaknesses you can address to help you compete better.

Customer Story

See How Yamaha Does Product Research

Types of market research

Although there are many types market research, all methods can be sorted into one of two categories: primary and secondary.

Primary research

Primary research is market research data that you collect yourself. This is raw data collected through a range of different means – surveys , focus groups,  , observation and interviews being among the most popular.

Primary information is fresh, unused data, giving you a perspective that is current or perhaps extra confidence when confirming hypotheses you already had. It can also be very targeted to your exact needs. Primary information can be extremely valuable. Tools for collecting primary information are increasingly sophisticated and the market is growing rapidly.

Historically, conducting market research in-house has been a daunting concept for brands because they don’t quite know where to begin, or how to handle vast volumes of data. Now, the emergence of technology has meant that brands have access to simple, easy to use tools to help with exactly that problem. As a result, brands are more confident about their own projects and data with the added benefit of seeing the insights emerge in real-time.

Secondary research

Secondary research is the use of data that has already been collected, analyzed and published – typically it’s data you don’t own and that hasn’t been conducted with your business specifically in mind, although there are forms of internal secondary data like old reports or figures from past financial years that come from within your business. Secondary research can be used to support the use of primary research.

Secondary research can be beneficial to small businesses because it is sometimes easier to obtain, often through research companies. Although the rise of primary research tools are challenging this trend by allowing businesses to conduct their own market research more cheaply, secondary research is often a cheaper alternative for businesses who need to spend money carefully. Some forms of secondary research have been described as ‘lean market research’ because they are fast and pragmatic, building on what’s already there.

Because it’s not specific to your business, secondary research may be less relevant, and you’ll need to be careful to make sure it applies to your exact research question. It may also not be owned, which means your competitors and other parties also have access to it.

Primary or secondary research – which to choose?

Both primary and secondary research have their advantages, but they are often best used when paired together, giving you the confidence to act knowing that the hypothesis you have is robust.

Secondary research is sometimes preferred because there is a misunderstanding of the feasibility of primary research. Thanks to advances in technology, brands have far greater accessibility to primary research, but this isn’t always known.

If you’ve decided to gather your own primary information, there are many different data collection methods that you may consider. For example:

• Customer surveys
• Focus groups
• Observation

Think carefully about what you’re trying to accomplish before picking the data collection method(s) you’re going to use. Each one has its pros and cons. Asking someone a simple, multiple-choice survey question will generate a different type of data than you might obtain with an in-depth interview. Determine if your primary research is exploratory or specific, and if you’ll need qualitative research, quantitative research, or both.

Qualitative vs quantitative

Another way of categorizing different types of market research is according to whether they are qualitative or quantitative.

Qualitative research

Qualitative research is the collection of data that is non-numerical in nature. It summarizes and infers, rather than pin-points an exact truth. It is exploratory and can lead to the generation of a hypothesis.

Market research techniques that would gather qualitative data include:

• Interviews (face to face / telephone)
• Open-ended survey questions

Researchers use these types of market research technique because they can add more depth to the data. So for example, in focus groups or interviews, rather than being limited to ‘yes’ or ‘no’ for a certain question, you can start to understand why someone might feel a certain way.

Quantitative research

Quantitative research is the collection of data that is numerical in nature. It is much more black and white in comparison to qualitative data, although you need to make sure there is a representative sample if you want the results to be reflective of reality.

Quantitative researchers often start with a hypothesis and then collect data which can be used to determine whether empirical evidence to support that hypothesis exists.

Quantitative research methods include:

• Questionnaires
• Review scores

Exploratory and specific research

Exploratory research is the approach to take if you don’t know what you don’t know. It can give you broad insights about your customers, product, brand, and market. If you want to answer a specific question, then you’ll be conducting specific research.

• Exploratory . This research is general and open-ended, and typically involves lengthy interviews with an individual or small focus group.
• Specific . This research is often used to solve a problem identified in exploratory research. It involves more structured, formal interviews.

Exploratory primary research is generally conducted by collecting qualitative data. Specific research usually finds its insights through quantitative data.

Primary research can be qualitative or quantitative, large-scale or focused and specific. You’ll carry it out using methods like surveys – which can be used for both qualitative and quantitative studies – focus groups, observation of consumer behavior, interviews, or online tools.

Step 1: Identify your research topic

Research topics could include:

• Product features
• Product or service launch
• Understanding a new target audience (or updating an existing audience)
• Brand identity
• Marketing campaign concepts
• Customer experience

Step 2: Draft a research hypothesis

A hypothesis is the assumption you’re starting out with. Since you can disprove a negative much more easily than prove a positive, a hypothesis is a negative statement such as ‘price has no effect on brand perception’.

Step 3: Determine which research methods are most effective

Your choice of methods depends on budget, time constraints, and the type of question you’re trying to answer. You could combine surveys, interviews and focus groups to get a mix of qualitative and quantitative data.

Step 4: Determine how you will collect and analyze your data.

Primary research can generate a huge amount of data, and when the goal is to uncover actionable insight, it can be difficult to know where to begin or what to pay attention to.

The rise in brands taking their market research and data analysis in-house has coincided with the rise of technology simplifying the process. These tools pull through large volumes of data and outline significant information that will help you make the most important decisions.

Step 5: Conduct your research!

This is how you can run your research using Qualtrics CoreXM

• Pre-launch – Here you want to ensure that the survey/ other research methods conform to the project specifications (what you want to achieve/research)
• Soft launch – Collect a small fraction of the total data before you fully launch. This means you can check that everything is working as it should and you can correct any data quality issues.
• Full launch – You’ve done the hard work to get to this point. If you’re using a tool, you can sit back and relax, or if you get curious you can check on the data in your account.
• Review – review your data for any issues or low-quality responses. You may need to remove this in order not to impact the analysis of the data.

A helping hand

If you are missing the skills, capacity or inclination to manage your research internally, Qualtrics Research Services can help. From design, to writing the survey based on your needs, to help with survey programming, to handling the reporting, Research Services acts as an extension of the team and can help wherever necessary.

Secondary market research can be taken from a variety of places. Some data is completely free to access – other information could end up costing hundreds of thousands of dollars. There are three broad categories of secondary research sources:

• Public sources – these sources are accessible to anyone who asks for them. They include census data, market statistics, library catalogs, university libraries and more. Other organizations may also put out free data from time to time with the goal of advancing a cause, or catching people’s attention.
• Internal sources – sometimes the most valuable sources of data already exist somewhere within your organization. Internal sources can be preferable for secondary research on account of their price (free) and unique findings. Since internal sources are not accessible by competitors, using them can provide a distinct competitive advantage.
• Commercial sources – if you have money for it, the easiest way to acquire secondary market research is to simply buy it from private companies. Many organizations exist for the sole purpose of doing market research and can provide reliable, in-depth, industry-specific reports.

No matter where your research is coming from, it is important to ensure that the source is reputable and reliable so you can be confident in the conclusions you draw from it.

How do you know if a source is reliable?

Use established and well-known research publishers, such as the XM Institute , Forrester and McKinsey . Government websites also publish research and this is free of charge. By taking the information directly from the source (rather than a third party) you are minimizing the risk of the data being misinterpreted and the message or insights being acted on out of context.

How to apply secondary research

The purpose and application of secondary research will vary depending on your circumstances. Often, secondary research is used to support primary research and therefore give you greater confidence in your conclusions. However, there may be circumstances that prevent this – such as the timeframe and budget of the project.

Keep an open mind when collecting all the relevant research so that there isn’t any collection bias. Then begin analyzing the conclusions formed to see if any trends start to appear. This will help you to draw a consensus from the secondary research overall.

Market research success is defined by the impact it has on your business’s success. Make sure it’s not discarded or ignored by communicating your findings effectively. Here are some tips on how to do it.

• Less is more – Preface your market research report with executive summaries that highlight your key discoveries and their implications
• Lead with the basic information – Share the top 4-5 recommendations in bullet-point form, rather than requiring your readers to go through pages of analysis and data
• Model the impact – Provide examples and model the impact of any changes you put in place based on your findings
• Show, don’t tell – Add illustrative examples that relate directly to the research findings and emphasize specific points
• Speed is of the essence – Make data available in real-time so it can be rapidly incorporated into strategies and acted upon to maximize value
• Work with experts – Make sure you’ve access to a dedicated team of experts ready to help you design and launch successful projects

Trusted by 8,500 brands for everything from product testing to competitor analysis, Our Strategic Research software is the world’s most powerful and flexible research platform . With over 100 question types and advanced logic, you can build out your surveys and see real-time data you can share across the organization. Plus, you’ll be able to turn data into insights with iQ, our predictive intelligence engine that runs complicated analysis at the click of a button.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

Ready to learn more about Qualtrics?

How to Do Market Research

Noah Parsons

18 min. read

Updated February 21, 2024

One of the biggest and most expensive mistakes I’ve made in my business career could have been avoided by doing a little homework.

In the late 2000s, my team and I came up with what we thought was a great idea for a product . Tons of businesses would need it, and it was almost guaranteed to be a huge hit!

But, we neglected to do our market research. 

We ended up with a product searching for a market instead of figuring out who our ideal customer was and building a product specifically for them.

You can avoid making this same mistake. 

Let’s learn from my experience and go over the basics of how to conduct market research. 

• What is market research?

Market research is the process of gathering information about your potential customers. 

It helps you define your target market, craft customer personas , and understand the viability of your business, by answering questions like: 

• Who are your customers?
• What are their buying and shopping habits?
• How many of them are there? 

By exploring your ideal customers’ problems, desires, and current solutions, you can build your product, service, and overall business strategy to better serve them.

• Why is market research important?

When starting a business , conducting market research to get to know your customers is one of the most important things you can do. 

If you don’t understand your customer, you don’t know:

• How you can solve their problems . 
• What kind of marketing messages and advertising work. 
• If your product or service is actually something your customers will spend money on.

Beyond that, market research can help you:

• Reduce risk: Inform critical decisions with real-world data.
• Understand your competitors: Know how competitors and alternatives to your business represent themselves in pricing, quality, and placement.
• Identify market trends: Stay ahead by spotting emerging trends and shifts in the market.
• Enhance customer experience: Improve customer satisfaction by addressing their pain points.

Gathering data on your customers should become a regular practice for your business. 

The more in tune you are with your customers, the better you can serve them and the more likely you are to grow your business. You should never just let assumptions about your customers drive business decisions.

Developing primary and secondary data through market research is how you get an accurate reflection of your customers’ needs.

Further Reading: 6 things to consider before entering a market

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Things to consider before conducting market research

Market research can be incredibly time-consuming (and even a waste of time) when done without the right preparation.

Here are a few questions to answer to help ensure you make the most of your efforts.

What are your objectives?

A research objective is a stated purpose that explains why you’re doing market research. It should include a specific result you intend to achieve, using available resources within a certain time frame. 

Without an objective, you’ll pour over a sea of data without knowing what you’re looking for. And if you speak to customers without a goal, you’ll struggle to ask useful questions and dig deeper.

Don’t overthink it.

Your objective should be easy to understand and connected to your business needs. 

For example, if you’re just starting, your objective may be to verify before investing in production if your chosen customer base is interested and willing to purchase your product or service.

What research methods will you use?

You don’t need to have every question prepped or a list of people to interview at the start—but you should know what research methods you intend to use.

The research options you choose will impact the data you collect, and the time it will take to complete it. By doing this ahead of time, you’ll be better prepared to create a timeline of when to take specific actions and what milestones to hit to stay on track.

What tools and resources do you need?

You likely won’t know every resource you’ll need until you start doing research. However, that doesn’t mean you can’t be proactive. 

If you know the methods you’ll be using, research what tools you’ll need to:

• Conduct interviews
• Create surveys
• Observe customer behavior

If you use third-party data, identify reputable sources to provide the information you want.

• How to conduct market research

Every business will do market research differently. The sources, the methods of data collection, and how you’ll use that data are entirely up to you. 

However, the core steps you should take remain the same. Here’s my recommendation for how to structure your research efforts:

1. Start by identifying your target market

Imagine that someone walks into your business, reaches out online, or picks up the phone and calls you. 

It’s your perfect customer: someone who has the problem that you solve and is willing to spend money on your solution. 

Now imagine the details about this person. Who are they? Can you describe them?

Ideal customers and common traits

This “ideal customer” is your target market . Your business might have several target markets, but it will usually serve you best to keep your list of target customers to two or three.

Each of your target markets should share common traits . These might be demographic traits such as: 

• Income levels
• Locations 

They might be psychographic traits—groups of people that like the same things or have similar interests. Or, your target market might be a certain type of employee at another company, such as a Chief Technology Officer or head of marketing.

Most often, target markets are blends of demographic and psychographic groups. For example, you might develop a new type of shoe targeted at female triathletes. Or you might be opening a hair salon targeting urban, hipster men.

Further Reading: Why niche audiences are important and how to find yours

Market segmentation

Creating multiple target markets for your company is doing what’s called “ market segmentation .” 

This sounds complex, but all you’re doing is dividing your target markets into different groups you hope to sell to. Each market segment might have different characteristics and buy your product or service for different reasons.

You might create different marketing campaigns or customize your product or service for each segment.

Further Reading:

Target marketing explained

Your target market is your ideal customer who needs your solution. They share common traits like age, gender, income, interests, or job roles. To start, focus your efforts on one target customer.

Consider focusing on a younger audience

Younger consumers are often overlooked in favor of older customers who currently make purchasing decisions. However, if you can crack the interests of a younger audience, it may lead to long-term loyalty.

2. Find out if your market is big enough

Are there enough potential customers to sustain you and your competitors? If the answer is no, then you need to consider changing your product or service offering.

Use the attributes you defined in the target market step and determine how many people meet your demographic, psychographic, or location criteria. I’ve got some links to resources to help you figure this out at the end of this article.

For example: If your target market only has a few thousand potential customers, you must either sell to them frequently or at a fairly high price to create a sustainable, profitable business.

Further Reading: How to use TAM, SAM, SOM to determine market size

If you are targeting an existing market with established competitors, you do what’s called industry research . 

For example, perhaps you are building a new company in the market for sports drinks or the market for cell phones. In cases like this, understanding how much people buy of existing offerings will give you the best sense of your potential market size. 

In this case, you want to look for industry reports and read trade publications for your industry. These publications often summarize the market size.

Further Reading: Differences between industry and market research explained

3. Talk to your potential customers

Once you have identified your target market, or at least made a good guess at who your target market is, you need to take the most important step in this entire market research process. 

You need to get up from your desk, leave behind your computer, and go outside. That’s right, you need to go and talk to people in your potential target markets. 

Yes, you can do online surveys and other research, but that’s no substitute for actually talking to potential customers. 

You’ll gain more insight into your customers through first-hand accounts than any survey will ever tell you.

Do this one thing, and you’ll be miles ahead of your competition. Why? Because most people skip this step. It’s intimidating to talk to strangers. What if they don’t want to buy what you plan on making?

So, don’t be like most entrepreneurs (including me!) and skip this critical step. 

It can mean the difference between success and failure. Getting this step done early will help you refine your business model and make a clear impact on your future success.

Further Reading: How to Create a Market Penetration Strategy  

4. Identify and analyze your competitors

Part of understanding your customers is knowing what solutions they already use. 

These are your competitors, and they may directly compete with you or provide a reasonable substitution customers settle for. 

You’ll understand how to position your business to take advantage of potential opportunities and mitigate risks by analyzing who they are, what they do, and how customers respond.  

Document your known competitors

To keep things simple, start by listing your known competitors . Account for businesses that offer a similar product/service, and those that indirectly compete with their solution or industry expertise. 

Example:   You operate an outdoor goods retail store. Your mission is to provide hands-on direction for customers to find camping, hiking, and survival gear that they will love. You offer a wide selection of well-known brands, local options, and in-house creations.

Your direct competitors are the large brands themselves, less niche retail stores, and online sellers. You must also account for other businesses that provide expert-level information on outdoor activities. 

They likely don’t sell the products, but may provide guided tours, reviews, or other insights that overlap with your business. 

Analyze your competitors

Once you have your list, it’s time to get to know the competition. Check out their websites, social media, customer reviews, and news stories from the last year. 

Sign up for their email lists, visit their stores (if they have them), and track down any industry reports that give you an idea of their size, performance, and strategic direction.

You don’t have to do everything I just listed. But you must go deep enough to clearly understand your competitors and why potential customers may choose them over you. 

It may even be useful to use the SWOT analysis framework to provide additional structure for your research. 

Further Reading: 10 ways to determine what your competitors are doing

5. Document your findings

The final (and easiest) step is to document your findings. How formal your documentation is will depend on how you plan on using it.

If you only need to share your findings with business partners and others in your business, then you can probably communicate fairly informally. 

However, if you’re looking for investors for your business, you may need to write a more formal market analysis and do a market forecast.

Presenting your market research

The single piece of documentation that every business should create is a buyer persona . 

A persona is a description of a person that hits on all of the key aspects of your target market. And, just like you might have several target markets for your business, you might have several different buyer personas.

Creating a buyer persona converts your target marketing information from dry research into a living, breathing person. 

For LivePlan , we’ve created a persona named Garrett, who drives much of our product development. Garrett embodies the attributes of our ideal customer.

When we think about creating a new marketing campaign or developing a new feature for our products, we ask, “Would Garrett like this?” You can read about the process we used to create Garrett in this article.

How to create a detailed user or buyer persona

Visualizing your customers when reviewing a sea of data can be tricky. So, create a customer persona and turn that data into the living, breathing person you imagine your customer to be.

LivePlan customer persona example

Check out this real-world customer persona used by the business planning and management software LivePlan.

When should you conduct market research?

Market research is vital when starting a business. It will improve your product or service and help you avoid starting a business without customers.

However, market research shouldn’t be exclusive to new businesses. Conditions are bound to change, and you must stay up-to-date on your industry , competitors, and emerging trends. 

Here are a few other business events where market research can make a difference:

• Launching a new product/service or updating current features.
• Expanding into a new market.
• Consistent dips in financial performance. 
• Widespread market changes.
• New competitors enter the market.

Primary vs secondary market research explained

No matter how you decide to gather information, the methods can be boiled down to primary and secondary research. As a business owner, it’s worth understanding the basics of each type of research and how they work together.

What is primary research?

Primary research is the first-hand information collected (by you or someone you’ve hired) from customers within your market. Primary research cuts out the middleman and ensures that the results you are gathering are straight from the source. 

That’s why you should conduct primary research when validating your business idea. 

Furthermore, it can be broken down into two result categories — exploratory and specific.

Exploratory primary research

Exploratory primary research involves non-quantifiable customer feedback. This means you’re not trying to measure results but to record interest or an emotional response. You’ll accomplish this by asking open-ended questions in formats like focus groups or 1:1 interviews.

Asking for open-ended feedback ensures that the results are unfiltered and honest. You aren’t unintentionally leading or hindering their responses. 

Specific primary research

Specific research allows you to dig deeper into issues or opportunities you identified through your exploratory research. 

You may target a smaller segment of customers from the larger group you’ve spoken to, conduct additional interviews, or shift to more quantifiable research such as beta-testing or surveys.

What is secondary research?

Secondary research covers every other piece of data you have available. This includes resources such as:

• Public sources: Typically free and highly accessible information gathered through government-sponsored research projects. 
• Commercial sources: Research studies conducted by private organizations regarding the state of specific markets, industries, or innovations. 
• Internal sources: Data you have collected through everyday business operations. Everything from financial statements to Analytics reports can qualify.

Which is better: primary or secondary research?

Neither primary nor secondary research is better than the other. They simply have different use cases. So, aim for a healthy mix.

When starting, focus on conducting primary research to ensure you get the necessary information to validate your business. 

Compare those findings to secondary resources such as industry benchmarks , market reports, and internal data you’ve collected. 

You’ll likely leverage secondary research more consistently as you grow—but it’s wise to run primary research initiatives occasionally, especially when approaching a strategic decision. Only with both types of research will you fully understand the story of your place in the market. 

Further Reading: Types of market research explained and how to use them

Types of market research to try

1. face-to-face, remote, or phone interviews.

I mentioned this before, but the best thing you can do is get out and talk to your potential or current customers, virtually or in person. 

Be sure you have a refined set of closed and open-ended questions ready, and consider the interviewee’s tone, body language, and interest alongside their answers.

2. Focus groups

Similar to interviews, focus groups can provide direct feedback from your customer mix. Rather than receiving answers or reactions in a bubble, you get to see how customers may act when influenced by others in the market. You can simply ask questions, run product tests, or have them watch a demo.

3. Observational research

Observational research is about watching how potential customers engage with your product or service. You’re attempting to understand what roadblocks or frustrations they may be hitting, what functionality seems to resonate, what they want from your business, etc.

To conduct observational research, you can set up an official testing environment that you control. Or you can just go out and observe your potential customers and see how they shop, make purchases, and what factors encourage or deter them from purchasing.

4. Pricing research

You may include questions about pricing when conducting interviews or focus groups, but you can also specifically develop research around pricing. 

This can be anything from testing different pricing options on your website ( A/B testing ), offering discounts to exclusive segments, or running ad campaigns with different pricing positions. The goal is to understand what your customers are willing to pay and what they consider a fair price .

5. Brand awareness research

This type of research is about understanding if your target market knows about your brand and how much they happen to know. What do they associate with your brand? What competitors come to mind first?

It’s a great way to understand your current market penetration and who your competitors are. You can integrate this type of questioning within your other tests or conduct surveys to get this data.

6. Customer interest

As part of your initial validation process, you should try to understand current customer interest. At its most basic, you’re asking: Are customers willing to buy your product or service? 

You can simply ask questions and look for yes or no answers, but it may be wise to run a limited-time sale or pre-sale to actually line up initial revenue for your business. 

You can offer the chance to purchase during your interviews or focus groups, as well as run pre-orders through a simple landing page or by measuring engagement with a paid ad campaign.

7. Customer satisfaction

This research will help you understand current customer loyalty and what it will take to get customers to come back. Again, you can do this research within focus groups or interviews. 

Still, you can also test loyalty programs, limited-time promotions, customer service initiatives, and other ways to improve customer loyalty. 

Market research tools and resources

Finding market research data depends on the market you are targeting and the industry you are in. 

Here are a few of my go-to sources for market research:

• U.S. Census : If you’re opening a business in the U.S., the U.S. Census site is a goldmine of information. Check out the Census Business Builder to get population data and data on how much people spend in a given area on your type of business.
• Bureau of Labor Statistics : Another U.S.-centric resource, but a fantastic site for information on specific industries: hiring and expense trends as well as industry sizes. If your target market is other businesses, this is a good place to look for data.
• Consumer Expenditure Survey : If you want to know what people spend their money on, this is your source.
• SBDCNet Business Snapshots : You’ll find a great collection of industry profiles that describe how industries are growing and changing, who their customers are, and what typical startup costs are. You should also check out their list of market research resources, sorted by industry .
• ChatGPT : All data generated from AI models like ChatGPT must be verified. But it can still be an excellent market research assistant. With the right prompting, you can generate customer segments, understand their nuances, and prioritize them based on your needs.

Further Reading: 21 best market research resources for small businesses

Market research informs your startup decisions

Effective market research can help you avoid costly mistakes early on in the life of your business. 

However, it should remain a core practice that you regularly implement when approaching crucial business decisions, growth opportunities, or just to reaffirm your understanding of the market. 

Revisit this framework whenever you’re approaching a key strategic decision . Confirm that you still understand your customers, competitors, and where the market is headed.

Then use this information to inform your planning and adjust your strategy if necessary.

Clarify your ideas and understand how to start your business with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Before conducting market research
• When to conduct market research
• Primary vs secondary research
• Types of market research
• Tools and resources
• Market research informs your decisions

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Market Research: A Beginner’s Guide

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Knowing how to conduct market research enables marketers to create new products, features, and pricing that speak directly to the needs of their customers.

Sadly, most of us lack psychic powers. But we do have market research .

We mere mortals need a way to learn about what our audience wants, how we can earn their business, and how we can maintain or improve loyalty to our brand over time.

This is the domain of market research, a skill that can be intimidating to non-researchers, but one that needs to be part of every marketer’s toolkit.

There are just three phases to a market research project, and this guide will help you tackle all three with gusto. These phases are:

• Collect Data
• Analyze (and Act)

In this post, we break down each phase into multiple steps. Once you get these right, it will be almost as good as being psychic.

Phase 1: Planning for Market Research

To get the best results, start your market research project with a plan. A sk yourself these questions about your products and services:

Is there a need for this product in the market?

Make sure that you are in the right market for your business. If you live in Anchorage, it’s not likely that you would want to start a business selling outdoor swimming pools.

Do my products meet specific market needs?

Think about the general needs that you perceive in your target market, then ask yourself if and how you meet them. Think about what you are doing now and what you could do.

Culturally, healthy eating is popular, but there are multiple different types of diets. If you plan to open a restaurant, are you going to offer healthy options as well as options for those on restrictive diets?

Is my pricing fair and competitive?

Pricing is one of the largest factors in why consumers may leave you for the competition, so keep an eye on both your prices and that of your competitors.

While you want to maximize your profit per unit sold, to maintain regular business, you need to be aware of what your competitors are doing and stay competitive.

Decide What Data You’re Looking for in Your Market Research Study

By analyzing your answers to the above questions, you can come up with a good platform from which to start your research.

The goal is to have an idea of what you can change and make a plan of how to do so.

For example, a specific market need could be gluten-free dinner options. Currently, you have one, but wonder if you should expand your menu to include a wider variety.

Your plan is to survey people with Celiac’s disease and gluten intolerance to see what options they would be most interested in adding to your menu.

By establishing exactly what data you’re looking for, you’ll be able to keep your study on-target.

Form a Research Hypothesis 

Just like having a basic understanding of your market is beneficial to your research, so to is having a hypothesis to inform what you think the results will be.  But, be prepared to be surprised!

Before you begin the research phase, you should have dedicated some time to thinking about how you expect it to go. The true outcome may vary greatly but you will be a better position to analyze your data and make effective changes if you go into it with some plan of attack.

Phase 2: Collecting Market Research Data

Now, on to the meat of your market research project: going out and getting responses!

There are two ways that you will want to approach the data collection process:

Quantitative research is the mathematical approach and should be used heavily in your process. Quantitative question types like radio buttons, checkboxes, and Likert scales are easy to measure and compare.

While the data can be a bit general, quantitative research methods allow you to identify broad trends within the data that you can act on.

Google Analytics is another example of quantitative research that can support or inform your market research surveys. Here, you can look at where your leads are coming from, how long people are staying on your pages or maybe where they are leaving your page. This can give you an idea of what to fix to bring people through the sales funnel.

Qualitative research , on the other hand, asks for more detail. The most common examples are open text question types where respondents put their answers in their own words.

This type of research is usually used in conjunction with quantitative question types as this data is more difficult to analyze, but provides specific examples and deep insights.

For example, you can use Google Analytics as quantitative data showing how potential customers are reaching your page. To find out why  those referrals are more effective than others, use qualitative research.

Surveys, focus groups, user testing, and face-to-face interviews are prime examples of qualitative research and can provide you with answers that are actionable while opening a window  into behavior patterns.

The Two (Main) Types of Market Research

Once you have a plan and hypothesis, it’s time to determine the type of research you need. There are two broad types of market research that you will want to focus on.

Primary research involves conducting your own research about products and services that you plan to offer. Secondary research looks at published data and can be used to create benchmarks and understand the competition.

While there is no set order to gathering your data, I find that conducting secondary research first can help give you the background information that will allow you to create a more targeted primary research project that produces better data.

How to Conduct Secondary Market Research for Your Business

When conducting secondary research, keep your plan and project goals at the top of your mind. It’s easy to fall down a rabbit hole of data and become overwhelmed. Maintaining focus on your pre-established goals will keep you and your market research surveys on target.

Step one is to determine your questions.

Do you need to learn more about the market to help determine your target demographics? Are you hoping to learn more about the competition and how they operate? Do you understand consumer preferences and how they’ll play into your business model?

Next, you’ll need to figure out what kind of information you need to answer your questions. Definining what data you need will keep you on track during your research and help you sift through the mountains of data.

Ask yourself what would be most beneficial to you: statistical data such as annual reports and financial records, or location-specific data and consumer information.

  Once you know what questions you need answered have an idea of the information that will best answer them, you are ready to start the research.

We suggest the following resources for successful secondary research:

• Public sources such as libraries and government departments
• Banks and other financial institutions
• Educational institutions such as universities and technical institutes
• Online periodicals and industry studies (try searching in Google Scholar)

How to Conduct Primary Market Research

  Once you’ve completed your secondary research and have a solid understanding of your particular market, your target demographics, and the competition, you’ll want to get started on your primary research.

Your primary research will get more in-depth about the particulars of your business, products, and location. The questions you ask will be specific for your situation but often the questions include:

• Which factors do consumers consider when making a purchase?
• What do they like/dislike about our current products?
• Where could this product improve?
• What is a fair price for this product?

Collecting Responses for Primary Market Research Surveys

  There are a number of ways to get answers to these questions, however, when in the primary research stage, you want to make sure that you are collecting information from specific segments of people. Use qualifying questions to ensure that your sample meets your demographics are a great way to make sure that your data is practical and actionable. This can involve offering incentives to respondents.

Tapping into Focus Groups for Market Research

If you would like specific answers to how a product could be improved upon, a focus group is a great option.

Focus groups may require the largest incentive but are a great way to get direct feedback on a product. This involves bringing a small group of people together and having them sample your product. Afterwards you’ll ask them specific questions to gather feedback.

Using Surveys and Questionnaires for Market Research

For overarching questions, such as, “what factors do you consider when purchasing?” a survey or questionnaire is a great way to get the opinions of a larger group of people. These can be created online and require less of an incentive as the respondent can take them at their leisure.

If your business is more service oriented, you will still want to explore all of these options, but what may benefit you the most is direct interviews. These can be done face-to-face or over the phone and can focus primarily on getting feedback about the performance of the service.

Phase 3: Analyzing and Acting on Your Market Research Data

The most important aspect of market research is, of course, acting on it. All of the research and data in the world can’t help your business is you don’t put it into action!

In order to thrive, you must be agile and willing to address any faults that your research uncovers. While you may not be able to change everything immediately, you can make incremental improvements that will add up.

How to Accurately Analyze Market Research Survey Data

Throughout the steps taken during research, your quantitative studies should have pointed you in the direction of any areas of weakness. Now you’ll turn your eye on the qualitative research to learn how to fix the problem.

By studying Google Analytics, maybe you found the page where people are most often leaving your site. Having acknowledged the problem, you got direct feedback on where and why and are now ready to fix the issue.

Or while developing a menu, your team discussed the idea of introducing healthy options to please the more conscientious eaters. Using a survey, you polled your market and found that 40% of people said they are concerned about their health and would like to see a menu that reflects this growing trend.

Acting on Your Market Research Findings

Collecting all of this information without acting on it is time wasted, right? Take a look at the feedback you are given and come up with solutions.

If you’re not the sole proprietor, this could involve having your team get together to come up with ways to address any issues or weaknesses. During brainstorming sessions, write every single idea down. Slowly whittle them away until you are left with tangible solutions to established problems.

If you’ve discovered that there is a page where people seem to be falling off in masses. Your qualitative research should give you an idea of why they’re leaving that page and how to improve that experience.

For example, is there something distracting them and causing them to lose focus? Is the contact form a bit too invasive and scaring people away? Fortunately, in the online world, you can use split testing to try out multiple solutions at once to find a winner.

  For the restaurateur, data showed that a huge segment of your market is interested in eating healthy but that they are also economical when it comes to eating out. Through your secondary research, you found that the competition is making a killing by offering seasonal salads that are both healthy and cost effective. What do you do? Adapt accordingly.

The More You Conduct Market Research, The Easier It Gets

It’s easy to look at the market research process and think to yourself that it’s too much work. “How can I overwhelm myself with all of this research when my business is losing money?” you say with your head in your hands.

Sit down, drink a glass of water and remind yourself why you got into business in the first place. Now ask yourself if that business is worth the energy required to make it successful.

Hopefully the answer to that is yes.

And happily, it does get easier. Each time you conduct research, you’re becoming more and more familiar with the market. It won’t happen overnight but soon you’ll have a good enough understanding of your audience that you’ll be providing the studies that newer businesses are looking to during their secondary research.

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How to do market research for a startup (with examples)

Did you step out of the shower this morning with a business idea to beat them all? Did you read back through late-night notes, and they finally made sense?

If you’ve come up with an amazing idea for a product or service, congratulations! This could be the start of a great adventure, and every adventure needs to start somewhere.

To set a business set up for success, don’t create that website or launch that prototype just yet .

Take the time for proper market research . We know it might not seem as exciting as elevator pitches and guerilla marketing campaigns. Still, it’s just as important for your business strategy and will be a firm contributor to your startup’s success.

To discover if your big shower idea is viable, you need to conduct market research .

Before understanding which market research method is best for you, let’s get on the same page. 

What we’ll cover in this article:

What is market research.

• What good market research looks like, and what it can deliver
• Why market research for startups is so valuable 
• How to conduct market research for startups in a way that’ll give you actionable data
• Some examples of how market research changed the course for startups that went on to become successful businesses

Market research is about analysing the market you are in or are about to enter. It involves closely examining market trends, industry trends, market dynamics, your target audience, and other potential customers. Market research includes competitor analysis to see how similar businesses are selling and identify any indirect competitors you can learn from.

Market research findings will influence and guide your go-to-market strategies, and help you secure funding — they aren’t just for good-looking reports! Investors will want to see more than general market size figures. If you can show them proprietary data you’ve gathered from your target consumers (also known as zero-party data ), it will give them the deeper layer of insight they’re looking for.

Market research has been around for decades , and companies have tweaked and updated it over time, but the term has always been used rather loosely. It shouldn’t be conducted to simply confirm that your idea is good. 

When you conduct market research looking to affirm a hypothesis, you become susceptible to market research bias. You can end up walking away with specific data sets that affirm your theory, rather than actionable data that can dictate the direction your theory needs to take—which may be the opposite direction!

Why is market research important for entrepreneurs and startups?

It’s easy to be blinded by the potential of a big startup idea. Your product or service might seem great on paper—or even as a prototype—but without proper market research services , it could flop when you go to market.

Startup founders need to get as much detailed information on their potential market as soon as possible. Here are some reasons why:

Market research will help you test your ideas

There are several things you can and should find out about your product through research. The first question to answer: is there sufficient demand for your product?

It’s not true that if you make something and promote it hard enough, people will eventually start buying it. 

It could be that the product you have in mind is not for the target group you would expect or that the timing is off. For example, selling wired headphones now that most cell phones don’t even have a headphone jack would not be the perfect timing to secure demand. This works both ways; your product could be behind the times or ahead of them—as you’ll see later in our examples!

That doesn’t mean you can’t produce anything that hasn’t been done before – you simply have to do it differently and better. When Slack entered the market, there were communication tools for businesses already on the market. They just did it better. 

Aside from understanding what your core product and its features need to look like, you’ll also gather important information on pricing, payment plans, marketing strategies, product messaging, and more. There are tons of companies to help you with your research—here are the top market research companies in the US to get you started.

Conducting market research is important for attracting investors

If you want to impress potential investors, you’ll need more than a spicy prototype to whet their appetite. The main thing that investors care about is how likely they are to make money out of this product in the long run. 

For that, they’ll need to see research that backs up your claims and proves there’s a viable market for you to enter and meet demand. 

 This research makes the decision-making process to invest that much easier. 

Investors will need to conduct a due diligence check before they part with their cash. You’ll have a large chunk of the data they need embedded in your market research—making this investment process run that much smoother for every stakeholder. 

Discover how market research can help your brand: from reaching the right customers to testing creative assets

It makes startups less likely to fail 

Let’s look at why startups fail.

The top answers for this underline the importance of market research once again. At number 1 on the list of reasons why startups fail: ‘ no market need. ’ In 42% of cases , there’s simply not sufficient demand for a shower thought—no matter how innovative it is.

Number 3 on that same list is being beaten by the competition. Ignoring your competitors accounts for 20% of startup failure !

Of course, market research can’t predict the future entirely. However, when done properly, it’ll give your small business the tools needed to get a head start in the sink-or-swim world of startups.

Choose the right tools for market research

Attest is here to give you all the market insights you need, with tailored demographic filters and ready-to-go survey templates, you can measure everything from brand awareness to product demand in hours, not days or weeks.

How to do market research for a startup: 6 steps

There are plenty of tools, resources, and best practices to conduct solid market research, but it can be difficult to pick the right direction to head in. Worry not! Here are six steps to get the most out of your market research.

1. Find the right market research methods for your needs

Before diving into your market, target audience, and competitors, it’s good to freshen up on the types of market research methods there are: primary research and secondary research.

Primary market research

The internet only knows so much. You’ll have to get some data straight from the source: your target audience. That’s where primary data enters the picture. This is research you do yourself, gathering information directly from the people you want to use your product or service.

A great way to do this is by using online surveys or working with focus groups to get a comprehensive understanding of what your future buyers and loyal customers need.

Secondary research

If you use existing research and data, you’re doing secondary market research and finding secondary data. This can be great for exploring market dynamics and spotting trends. You can find more tools to help you conduct this research method in our blog: 12 great market research tools .

Secondary data has its place, but because it’s external research that hasn’t been conducted with your business in mind, you’ll need to be aware of citation bias.

What’s citation bias? Citation bias occurs when your data uses the results of other research. The results of which may have been looking to prove something slightly different to what you’re looking to prove. Plus, if the research is not conducted by you, then the data may already have fallen victim to one or more other types of survey bias you haven’t been able to account for.

2. Find out what you need to focus on

You might have a general sense of what you want to learn from your market research: whether or not you should launch your startup idea. However, you’ll need to specify some research goals to get actionable data.

After your first exploratory primary research or secondary research, you’ll be able to identify where you have knowledge gaps. What isn’t clear about the market? What assumptions about your potential customers need to be verified?

You can split up your market research goals into different categories—helping you better assign the right team to the right tasks.

For example, let your best marketers and sales reps help you in researching buyer behaviours. Let your finance team guide payment habits and payment methods for your market research. 

This market research template can help you better guide your market research.

3. Identify your ideal market

In any market research, you’ll have to look at three important factors:

• the target market as a whole
• your competitors
• your potential customers

We’ll start with the market as a whole because it’ll help you get more specific data along the way.

First, figuring out which market and industry niche you fall into is crucial. It may seem obvious, but if you put some thought into it, you might find you’d perform better in a different market.

Aim for a market where you fit in, where there’s a large enough product demand , and where you can make a difference.

Here’s how to find out what’s going on in a market:

Find your market, fast

Don’t leave the success of your startup to chance – our market research software is here to help you navigate the market and make the right decisions for your brand.

Talk to industry experts

Talk to experts who’ve been working in that target market for years and ask them about what they think the future will look like. These might just be speculations, but it’s better to hear them and address them than pretend they don’t exist.

You can also pay attention to what’s happening in online communities revolving around your product idea. For example, places like Facebook Groups, Reddit, Twitter, Twitch, ProductHunt, G2, Capterra, and other platforms can be a great eye opener about your potential future customers and market. 

Read the latest trend reports

Another great way to get a clear view of trends in your market is to keep track of relevant blogs and news. There are plenty of target market reports and public market data available to find out the latest trends and where the market is going, like G2, Deloitte, Gartner, McKinsey, and more—make the most of these datasets.

Use target market research tools

With Google Alerts and Trends, you always have comprehensive, up-to-date data on trends and can spot changes in popularity for certain brands and products by focusing on specific keywords. 

Find out what our favourite tools are for analysing your target market in our blog: eight smart market analysis tools .

4. Shake hands with your target audience

Get ready to talk to real people.

To understand your target market, you need to look at more than numbers. It’s great to see some people spending a lot on certain products, but you’ll need to learn why they do that. Get the powerful insights you need to create a strong positioning and ensure your marketing efforts hit the spot.

This is where primary research is most important. You can choose in-depth interviews, online surveys, focus groups, or a mix of those things, depending on what answers you’re looking for. 

Lost for words? We’ll give you some inspiration in this list of 20 essential questions you should ask your (future) customers .

Consumer profiling for startups

We recommend you go beyond the standard consumer profiling demographics and build buyer personas with layers. By adding behavioural and attitudinal data to the mix, you will create much more effective marketing campaigns and digital marketing strategies that land with the people most likely to use your product.

We’ve got a guide full of tips to get started with consumer profiling as a startup and a success story of one startup that discovered their most important potential customers weren’t who they thought they were .

5. Analyse your key competitors—direct and indirect

Next up: your competition. You don’t need to infiltrate their business to get to know them inside-out, but it sure helps to look at their strategy, messaging, tactics, and, most  importantly, what your target audience thinks of them.

Your target market probably knows who your competitors are better than anyone else. Find out what products they consider as alternatives to yours, and you may find out you have significantly more competition than you initially thought.

Take things a step further and look beyond your obvious direct competitors; focus on other companies that could be catching up with you in a few years or are in your niche but currently offering something else. Chances are you’re not the only one working on a new business idea each morning in the shower!

Rest assured, this doesn’t have to be guesswork—here are our 14 favourite competitor tracking tools to help you get started.

6. Be prepared to make big, but well-informed decisions

Once your market research is done, and all questions answered, it’s time to create a plan of action. Hopefully, you found out that your product or service is a lucrative idea and that there’s a real market for it—even if you need to tweak your idea a bit.

Market research will be the guide for any future business decision you take. How you approach product development, branding, and marketing, will all depend on the results of this research. 

3 Examples of market research for startups

The success of any startup heavily depends on whether they’re willing to listen to their target market or not.

Let’s look at real-life examples that paved the way for tons of startups and set an example in market research best practices to transform a business in its earliest stages of growth.

Example 1: the board game maker that won big with market research

Before coming across Attest, Big Potato Games was cobbling together insights from social media and Google Analytics—not ideal when you want a comprehensive picture of your market.

The team needed to establish exactly who their customers were, and learn the behaviours and attitudes of their potential customers to more effectively target the right people in the right places with the right messaging.

Using market research to explore consumers’ attitudes towards board games and what motivates them to play helped them define key customer personas. The research uncovered seven key customer types, all the way from casual, occasional players to hardcore gamers.

An example of what they uncovered through market research was that mums view board games as a way of getting the family together, while young adults saw it more as a way to socialise with friends.

They also found out the size and importance of each customer segment. While the hardcore gamers are a super important and dedicated segment, it’s still quite a small buyer group. It turned out that the mums group was a much bigger purchase decision-maker and demographic to go for.

Market research allowed them to better understand the segments where they sought to build awareness, who was using their product, and who was actually buying it.

Example 2: admit when you can’t beat the competition

Ever heard of Odeo? It probably doesn’t ring a bell. It was created by Evan Williams and Biz Stone in 2005 as a platform for podcasts. They placed their bets on podcasts. However, as we now know, their timing was off.

Instead of sitting around and waiting for podcasts to hit, they re-examined the market. They looked at user adoption rates, technology, and customer acquisition costs. At the time, Apple was their main competitor, and they knew they wouldn’t win. So, based on their market research, they pivoted.

They looked at other popular platforms where content was shared, such as Facebook. Their market research looked at what people didn’t like about those platforms. What tools were they missing? What annoyed people?

Not long after, Twitter was born. The Facebook News Feed was too cluttered for many people, so they cleaned things up. As we know today, it was a huge success.

Example 3: The dating site that turned into a video platform

Over the years, a lot of dating sites and apps have come and gone. Tune In Hook Up is one of those that has gone rather quickly. Its creators saw that the website, which was a video dating site, didn’t get enough traffic to make the right matches.

They had this technology that made posting videos online easier than ever, but not enough people were jumping on it.

They did market research and found it was hard to find specific videos online, and websites that did offer them didn’t work very well. Sharing videos with others was a pain for users.

Based on their research, they broke up with the online dating market and focused on the video part of their business that already existed. They changed the name, the platform, and their lives. You might have heard of it. They called it: YouTube.

Market research made simple

The right market insights can make or break your business, which is why market research is one of the most important things you can invest in. Don’t leave your market research up to chance – choose the best tools that set your startup on the path to success and match it with talent that knows what to go for. Now get back in the shower; you’ve got ideas to create!

Make market research easy with Attest

With our cutting-edge tech and on-demand research expertise, your startup can rest easy. Measure brand awareness and gain vital insights from our built-in audience of 110+ million people.

Market Research FAQs

To do market research for a startup, you should follow these six steps: 1. Pick the right market research methods 2. Identify what you need to know 3. Find your ideal market 4. Get to know your target audience 5. Analyse your key competitors – direct and indirect 6. Be prepared to make big, but well-informed decisions Once you complete them, you’ll have all the information you need to create a business strategy that will lead to your startup’s success.

The best form of market research you can do for a new business is primary market research. This is gathering information directly from the people you want to use your product or service by using online surveys or working with focus groups.

The main focus of the market research for small startup businesses is to validate their business idea. It doesn’t matter how good your idea or prototype looks; if there isn’t a market for it, no marketing budget will suffice.  By researching what the market thinks about your idea and what needs they have, you’ll know if your product will have demand or not. 

Customer Research Lead 

Nick joined Attest in 2021, with more than 10 years' experience in market research and consumer insights on both agency and brand sides. As part of the Customer Research Team team, Nick takes a hands-on role supporting customers uncover insights and opportunities for growth.

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The Complete Guide to Market Research for Startups

The importance of doing market research for startups is often underrated by those who need it most. The number one reason most startups fail is a lack of market understanding; it’s easy to see how so many new businesses don’t succeed in the early stages.

Success becomes an uphill battle when going to market without fully understanding who a target audience is and how to meet their needs.

Before we show you why and how to do market research for your startup, look at these stats.

The benefits of doing market research for a startup

You’ve seen the stats, and likely, you’re going to want to do everything possible to ensure you don’t end up being one of the many businesses that don’t make it through the early years. As you’ve started learning how to do market research for your startup, you’re on the right track to future-proofing your business – giving it (and you) the best chance of success.

Here are seven things startup market research allows you to do:

• Identify target market
• Understand customer’s needs
• Tailor marketing or a product launch
• Choose the best channels to market your business
• Understand the competitive landscape
• Formulate an effective pricing strategy
• Identify your Unique Selling Proposition (USP)

The information you need to succeed (in almost any market) is at your fingertips – ready and waiting to be discovered. With the right intel, you can refine your go-to-market strategy, remove the guesswork from your marketing, and plan activities based on what you know is working.

What’s more, with software like Similarweb Digital Research Intelligence , you can access instant insights that tell you where opportunities exist in your market.

How to do a market analysis for a startup

In this section, I’m going to show you six of the best ways to do market research for startups. Whether new to a market or a seasoned expert, these activities will give you the insights you need to formulate a successful plan.

If you’re still in the pre-planning stage, you can read more about how to do market research for a business plan here.

1. Size your market

Before entering a new market, it’s crucial to size up the opportunity. Market sizing allows you to see the potential share of your reachable market. The three metrics you need to work out are listed below, along with relevant formulas for each.

• Total Addressable Market (TAM)
• Serviceable Addressable Market (SAM)
• Serviceable Obtainable Market (SOM)

2. Research the competition

Startups can use market research to get a clear picture of the competitive landscape . With the right tools, you can analyze a market and evaluate industry leaders and emerging players in just a few hours. Any new business can use this information to shape its strategy and benchmark itself against competitors.

• Select between 2-4 competitors to analyze.
• Systematically collect data for each business that considers company, product, marketing, and customers, to build the ultimate competitive blueprint.
• Take advantage of our free market research templates to save time. Each is designed to help you better understand your market, customers, and competition. Use a template to record your findings to compare and benchmark easily.

To quickly get a handle on your nearest and dearest rivals, sign up for a free trial of Similarweb . Next, head to the industry overview tab of the Similarweb Digital Research Intelligence solution to start grabbing the data you need.

Industry Overview : The best place to begin any competitive research is here. View website traffic and engagement metrics for your industry to see industry-standard benchmarks. 

A quick click on Industry Leaders module (below) will immediately show you industry leaders and rising players. Here’s where things start to get interesting.

Use Industry Leaders to view your industry leaders and any rising stars that have been gaining traffic at pace. These rising stars are just as important to analyze as market leaders.

Further reading: This post covers seven types of Competitive Analysis Frameworks and includes a free template to help you record and compare findings.

3. Discover what marketing channels work

Whether you’re bootstrapping or have a healthy budget, managing your marketing spending is key. Market research helps you quickly see what channels work for others in your space and uncover competitors’ marketing strategies.

• Take or create a list of competitors.
• Evaluate their marketing channels, including direct, social, email, referrals, and ads.
• Determine if competitors are neglecting any high-value marketing channels.
• Document findings and analyze which channels offer the best ROI.

Use this intel to develop a marketing strategy tailored to today’s market. With Similarweb Digital Research Intelligence, you can do this element of startup market research in under an hour.

With a free trial of Similarweb, you can see granular insights about your rival’s most successful channels. This includes affiliates and referral partners, high-performing ads, upwards and downward turns, mobile app analysis , and more.

4. Identify best-performing pages and keywords

Discover which pages get the most traffic and conversions to find the keywords that drive traffic to competitors’ sites. This will help inform your keyword and content strategy. To create a list of relevant keywords (both long and short-tail), follow these pointers. The key to success is taking a broad view and not just going for the most obvious keywords everyone else is targeting.

• Analyze high-traffic keywords of your rivals, looking at both high and low keyword difficulty (KD).
• Avoid the apparent wins, and do a quick keyword gap analysis to reveal hidden gems.
• Evaluate search trends relevant to the industry you want to enter. Consider keyword seasonality too.
• Review rival sites and dig into their highest-performing pages. This will show you what keywords to use and provide a more informed view of what good content looks like in your market.

Pro Tip: When looking at top-performing pages, visit them and note the different calls to action your rivals use, as this will help you decide which to implement on your site.

With the pages element of Similarweb Digital Research Intelligence, you can analyze up to 10,000 pages per site. In an instant, you can unpack and track their highest-hitting pages as well as those growing or declining over time.

5. Analyze audience demographics

Knowing your target audience is critical for any startup market research.  Establish the following factors to build a picture of your potential audience.

• Use geographical data to see relevant gender and age distribution
• Review audience loyalty metrics to understand how people behave – e.g., do they shop around
• See what search terms they use to discover sites in your niche
• Do they view sites like yours on a mobile device or desktop?

As you can see, you can learn many things about your target audience before starting a business. With this data, you can refine your marketing activities like advertising, outreach, strategy, positioning, and more.

Further reading : Read our guide on how to identify your ideal niche audience

6. Monitor social media engagement and presence

Establishing a social media presence takes a lot of work, and you must evaluate how useful it is at the beginning before deciding how to allocate your resources.

• Review both industry leaders and new players in your industry
• List what channels they have a presence on.
• Look at the number of followers vs. the level of engagement.
• Record how many posts they make daily and weekly.

You can create a spreadsheet to track this or add this to your competitive framework. Don’t try to overdo things. Choose the best channels based on what you already see working for others.

Market research questions for startups

When doing any type of market research for a new business, you need to ask the right questions. There’s no point delving into company research and competitive analysis in a market without first considering what you’re trying to learn from the research.

Here’s a list of market research questions that you might want to consider:

• Do you know who your direct and indirect competitors are?
• Have you sized your market – and do you know your total addressable market (tam), serviceable available market (sam), and share of market (som)?
• What is your Unique Selling Proposition (USP)?
• How much are people willing to pay for your product or service?
• Will you go to market with a promotion, such as a free trial or discounted offering?
• How much do your competitors charge, and do they offer a like-for-like service?
• What trends are currently emerging or impacting your market?
• Do seasonal trends impact your business?
• How do your rivals onboard new customers? Will you do this in the same way or not?
• Do your competitors offer any loyalty or new-customer discounts?
• What are the most effective marketing channels in your industry?
• Are your rivals active on social media? If yes, which channels are the most successful?
• What type of customer support channels will you offer? Consider what your competition offers at present.
• What are your trading hours going to be? Consider the competition here too.
• What keywords are the most successful for your market?

Doing Startup research with Similarweb

Conducting thorough market research and analysis as a startup will help you direct your resources and sharpen your business plan to ensure you take advantage of market opportunities.

With Similarweb Digital Research Intelligence, you’ll access comprehensive industry data in real-time. This way, you’ll be able to track industry trends and the demographic makeup of your target audience to reach them better.

Because we provide real-time data, you get to see emerging market trends as they open. When you’re ready to launch your startup, you can use all that knowledge to your advantage.

Because we provide real-time data, you see emerging market trends as they happen. When you’re ready to launch your startup, you can use all that knowledge to your advantage and ensure your business is prime for the market you’re about to enter.

Don’t delay – start your market research strategy today. Try Similarweb’s Research Intelligence tool for free!

How do you do market research for a startup?

First, measure your market share, then identify best-performing pages and keywords, investigate marketing channels, analyze your audience demographics, compare metrics, and monitor social media.

What is the best type of market research for a startup?

When time and money are key considerations, the best type of research for any startup is secondary market research, AKA desk research . It’s low-cost, can be done with little-to-no market research experience, and the data is readily available online.

What are the 4 types of market research?

The four core types of market research are primary research , secondary research , quantitative research, and qualitative research .

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What Is Market Research?

• How It Works
• Primary vs. Secondary
• How to Conduct Research

The Bottom Line

• Marketing Essentials

How to Do Market Research, Types, and Example

Joules Garcia / Investopedia

Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

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How to Do Market Research for a Startup: Tips for Success

• Market research
• 10 min read

Jaclyn Robinson, Senior Manager of Content Marketing at Crunchbase

So, you have plans to create an industry-disrupting startup. Before you get started, ask yourself this: Do I know the market well enough to disrupt it?

No matter how informed you are about your industry, you’ll need to conduct market research for your startup if you want to succeed. This will help you better understand the industry you’re planning to compete in — and emerge with a well-thought-out business plan that investors take seriously. 

Here’s everything you need to know about how to do market research for a startup so you can back your idea with relevant insights before you hit the ground running.

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What is market research for a startup? 

Market research is a business technique that involves deeply understanding your core demographic, its dynamics, consumer attitudes and buying behavior. This type of research is a vital step in building a brand, satisfying client expectations, recognizing opportunities, increasing profit margins and beating the competition.

If you’re building a startup, market research will help you make smart business decisions and organize a successful launch. By understanding how to do market research, you can protect your startup even in a volatile marketplace.

The demand for market research has made it one of the world’s fastest-growing sectors; from $46 billion in global revenue in 2014 to almost $84 billion in 2023 .

While effective market research is important for every company — and should be done on an ongoing basis throughout many stages of company development — it is imperative when developing a new business idea.

Why is startup market research important?

Small-business market research can help you learn about your industry and market your startup to potential customers. It will also help you figure out how to best engage with customers, benchmark yourself against your competitors, make predictions about profitability, and guide your future moves. Market research may be the difference between making good decisions that help your new business grow and making bad decisions that cause it to fold. 

Here are a few more examples of how startup market research might aid in the development of your business strategy:

• Gives you an accurate picture of the market: Compare yourself to competitors and assess what they’re doing to attract and retain clients. Likewise, you can assess competitor gaps and determine how you can create a more successful, differentiated product.
• Provides insight into your target audience: Determine which customers are most likely to buy your product, what they’re interested in, and how you can best communicate with them.
• Uncovers how customers and prospects perceive your business idea: Learn whether your startup idea fulfills or falls short of specific customer demands. This will help you develop a product that addresses your audience’s needs and a brand that resonates with them.
• Assesses how a new business or product concept will perform in the market: Look at how similar products and services have performed in the market to help you assess the viability of your startup idea.
• Effectively markets your product: Startup market research can help you make informed decisions about product packaging and branding, advertising, and crafting a successful marketing message.

Types of market research for startups

Now that you know about the benefits of market research for a startup, let’s talk about the different types of market research you can conduct. 

There are two main types of market research: primary and secondary. You’ll want to use a mix of both to develop a holistic understanding of your target audience. 

• Primary market research involves gathering market data straight from the source by communicating directly with members of your target audience. The advantage of primary research is that you gain clear, up-to-date insights into your potential customers’ needs. Since you’re conducting the research yourself, you may also gain new insights your competitors don’t have. Examples of primary market research include interviews, surveys and focus groups. 
• Secondary market research involves looking at information compiled by third parties. The advantage of secondary research is that it consolidates huge swaths of data from a variety of sources and helps you understand important market trends. Examples of secondary data sources include public and private company databases, news sites, academic journals and industry publications. Crunchbase is known as an important tool for uncovering private company data and conducting targeted searches for the industries you’re interested in.

Methods of market research for startups

In addition to there being two different types of market research for your startup, there are also a couple different ways you can conduct it. These methods are known as quantitative and qualitative market research.

• Quantitative research means collecting and analyzing large numerical datasets. You might conduct this type of research by sending out polls, questionnaires or surveys to large numbers of people within your target market. The data you collect will give you insight into big-picture industry trends, consumer needs and challenges in the market.
• Qualitative research requires an in-depth exploration of customer mindsets. You might do this by conducting a focus group or interview to assess customer feelings and extract insights from the conversation. 

While quantitative data is about cold, hard facts, qualitative data is exploratory in nature. It’s often worth using a mix of both, but most companies prioritize quantitative research because it is scientific, measurable and easily replicated across different experiments.

How to do market research for a startup

At this point, you’ve learned that there are two main types of startup market research: primary and secondary. You’ve also learned that you can carry out this research in two different ways: either by conducting quantitative research and gathering data, or by conducting qualitative research and holding exploratory conversations. 

Now we’ll dive into how to do market research for a startup, step by step. Here’s a quick seven-step guide:

• Establish your overall goal
• Choose a research approach
• Acquire data on your target audience
• Formulate your research questions
• Choose the right tools for the job
• Analyze the data
• Act on the data

1. Establish your overall goal

First and foremost, take the time to clearly articulate the rationale behind the research you’re planning. Think through the most critical information you’re searching for and how you’ll apply your findings. What issue did you want to tackle via research? What will be done with the findings? Is it something you’ll do internally or externally?

These questions will help you formulate your overall research objective. This goal should serve as the North Star that guides the research process and keeps everyone aligned as you build and execute your market research plan. 

2. Choose a research approach

Based on the goal you’ve identified, determine how you’re going to conduct your primary and secondary research. With secondary research, answers to research questions are generally already accessible online — through news sources, published books, journals and databases — so you can get started on this right away. 

Primary market research, on the other hand, tends to be more time-consuming and expensive. For a startup, it may be in your best interest to perform primary research only after conducting secondary research. This way, you avoid wasting time and money from the get-go, and instead can develop well-planned research questions that bridge any knowledge gaps.

3. Acquire data on your target audience

Once you’ve determined your guiding research goal and your approach to gathering data, take a closer look at your target audience. Understanding your target audience can help you devise the best way to approach both secondary and primary research. 

Investigate your audience demographics and characteristics, the types of products they’re interacting with, where you can find information about them, and where you might be able to contact them. Read relevant market data, keep an eye on customer trends, and consider enlisting the help of an industry professional. Once you grasp the type of market research you’re going to conduct and the audience you’re targeting, it’s time to start crafting your research questions. 

4. Formulate your research questions 

Asking the right questions can make or break the value of your research. Well-thought-out questions can help inform your overall strategy, but the wrong questions could derail your research and reduce its overall value.  

Some examples of market research questions are:

• How old are you? 
• Where do you live?
• What is your job title?
• How big is your company?
• What is your use case for our product?
• Did you consider any of our competitors? Who and why?
• What do you wish our product could do?
• How much money do you usually spend on X products?
• What’s the maximum you’d pay for X products?
• How likely are you to recommend us to a friend?
• How would you rate your most recent experience with us?
• How long have you been our customer?

Keep in mind that these are just examples, and not all of them will apply to your startup. You should develop your questions based on a number of factors, including whether your company is B2B or B2C, whether your startup is brand new or has existing customers, and whether you’re aiming for quantitative or qualitative data. As you formulate your set of questions, make sure they touch back to your main market research goal.

5. Choose the right tools for the job

Data analysis is a time-consuming task, but it’s the cornerstone of conducting market research for a startup. Data collection, competitive analysis and the identification of customer preferences and trends are critical to your success, so it’s imperative that you have the right tools on hand. Ideally, these tools will not only provide a rich dataset you can use to gather information about your target audience, but they’ll also speed up your workflow during the market research process.

Here are a couple of examples of market research tools you can use:

Secondary research tool: Crunchbase offers a best-in-class dataset of companies and contacts that is updated constantly, helping you identify upcoming market trends and monitor your competitors . With Crunchbase, you can conduct granular, filtered searches based on your target market, set real-time alerts for changes in company activity, and find industry-specific landscape analysis with live information on company firmographics, funding rounds and acquisitions. Learn more about market research on Crunchbase .

Primary research tool: Qualtrics is a platform that helps you conduct research via surveys and a variety of other methods to answer critical market analysis questions for your startup.

6. Analyze the data

Once you’ve collected data using your research questions and tools, you’ll need to analyze it to distill relevant and applicable business insights. 

Often, data analysis is a manual process that includes compiling and sifting through the data you’ve gathered, annotating videos, taking notes, dissecting survey responses and more. Again, you’ll want to reference the overarching goal of your research, especially in this stage, to ensure you’re paying attention to the most applicable information that will best serve you. Start by noting common themes and trends, and then use those trends to efficiently sort through the data.

There are a variety of data collection and market analysis tools (like those listed above) that can help you evaluate the data by automating part of the process. You may also want to partner with an analyst who can gather insights from your data using statistical models and advanced market analysis techniques.

7. Act on the data

After you’ve drawn conclusions from your data, it’s a good idea to create a research brief or report that includes both a high-level findings summary and a deep dive into your methodology, data and key findings. This will help organize your results in a clear and succinct way, enabling other team members to reference and apply findings to inform the overall direction and strategy for your startup. You can also leverage this data when pitching your business idea to investors.

How much does it cost to do market research for a startup?

Startup market research costs vary depending on several aspects, including what you want to achieve, who will be engaged, the time it takes to collect data, and the approach or technology you use. Because there is no one-size-fits-all approach that suits every organization or project, determining an accurate pricing estimate for market analysis may be tricky. Some approaches are less complicated and less expensive than others, but they may not give you as much benefit.

With the help of an agency or consultant, a thoroughly customized market research project could cost between $20,000 and $50,000 . Expect to pay more for market research assignments conducted by a specialist in your industry. This high price is due to industry experience, professional project management and planning, and advanced data interpretation.

There are less expensive alternatives, but the analysis you receive will likely not match what a dedicated research firm can provide. Short, quantitative internet surveys can cost anywhere from $15,000 to $30,000 and are more likely to support an existing theory than to identify new, innovative approaches for your business.

Get ahead of the competition

Learning how to do market research for a startup is only the beginning of formulating a strong business plan that will impress investors and lead your startup to success. 

With Crunchbase, you can conduct affordable market research on an ongoing basis by empowering your team to dig deep into industry data and evaluate market trends. Check out our solutions or connect with our team directly .

• market research
• Originally published February 19, 2022, updated December 19, 2023

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How to Do Market Research for a Startup: 7 Steps with Examples

Kateryna Pysmenna

Tech Researcher

Head of Business Development

Get your project estimation!

Like most entrepreneurs, you believe in your startup’s success. But what if this belief is blind?

Picture this.

After spending 18 months and $70,000 on launching your new business, you recognize that revenue doesn’t meet your expectations and never will. The market is too small, the competition is too high, there are too few paying customers. Is there no way for startup owners to avoid financial losses and frustration?

In this article we will dive deep into how to do market research for startups to avoid failures.

Market research is not optional; it is imperative

Having a strong case that your startup idea is profitable is the difference between a serious business and a hobby. Market research for a new product is all about getting solid facts to make informed decisions prior to project development .

• Does your industry generate enough revenue to make it worth investing in?
• What is the market size, and what market share can you count on?
• How many competitors are there in your niche and how much money does it require to entice their customers?
• Who are the customers you should target and how much are they ready to pay for your product or service?
• What is the potential income your startup can generate in X months, and will it ever meet your financial expectations?

To get comprehensive answers to these questions, there’s no substitute for thorough market research for startup. Want proof in numbers? Let’s look at the top three reasons why startups fail according to CBInsights :

This data shows that in most cases, startups ultimately fail because their owners underestimate the importance of timely market research for a product. To prevent you from joining their ranks, we’ve prepared a step-by-step guide on how to do market research for a startup to get the most valuable insights in a short time and for a light cost.

Step by step: how to do market research for a new product

Before starting market research for a startup, you need to know four key definitions . First of all, the types of information sources you use define the two main thrusts of market research:

• Primary research is when you get information by directly interacting with representatives of your niche, target users, and competitors.
• Secondary research is when you get information from indirect public sources related to your niche (statistics, reports, surveys, articles, etc.).

When conducting market research, you’ll receive lots of mixed information that you need to put in order. According to the type of information you receive, you can divide primary and secondary research into two subcategories:

• Qualitative research identifies general concepts, visions, opinions, feelings, emotions, and preferences of your respondents.
• Quantitative research collects hard facts and involves analytics and statistics.

A wise combination of all four research types is the key to solid market research. To understand how market research works, follow our seven steps .

Step 1. Formulate your startup idea

To be able to conduct thorough market research, you need to specify what problems your startup solves, what needs it meets, and what business objectives it fulfills. The more clearly you define your business idea, the more productive your research will be.

Without being heavy on the details, you should describe:

• The problem you’re going to solve
• Your solution and its benefits
• Your unique value proposition
• Your company

Step 2. Explore your current business environment

With an idea for a startup defined, you need to understand what waters you’re entering. To analyze the current business environment, you can use both online and offline public sources, including:

• Government sources (e.g. the US Census Bureau , the Bureau of Labor & Statistics )
• Industry reports ( Statista , MarketResearch , IBISWorld )
• Local chambers of commerce and their business development departments
• Patent bureaus to stay familiar with innovations and identify trends

Figure out the total annual revenue of your industry . You’ll need this data to plan your desired market share.

To get a better understanding of how this works, look at the fitness mobile app market research we conducted for the FitrTraining app.

Step 3. Know your competitors

Once you’ve outlined your idea for a startup, you need to figure out who you’ll have to fight for market share. You should explore two main categories of competitors:

• Direct competitors are companies that offer similar solutions to your target audience and are similar to your company in terms of size and operations.
• Indirect competitors are companies that offer other solutions that differ from yours to your target audience and can provide you with deeper insight into your users’ preferences, stereotypes of behavior, and long-standing habits.

It’s worthwhile taking scale-ups — startups that have already raised funds in seed and subsequent rounds — as a model. To do startup market research, you can rely on tools like Y Combinator Startup Directory and Crunchbase .

Moreover, you can gain in-depth information about your competitors using commercial sources :

• Online platforms like Semrush , Crunchbase Pro , and App Radar
• Market research agencies like Pew Research Center , Gartner , Forrester , and Mintel

These market research resources are paid, but they can provide you with important data about your competitors:

• Acquisition channels and digital marketing strategies
• Powerful calls to action, reward systems, referral programs, etc.
• Incentives competitors use to turn visitors into buyers (free trials, bonuses, discounts, free shipping, etc.)
• Ways they increase customer engagement (push notifications, top-notch technologies, gamification, etc.)
• Core performance metrics including conversion rate , customer acquisition cost (CAC) , and customer lifetime value (LTV)

While conducting competitor analysis, you might require a tool to systematize information. For this, you can use a SWOT diagram . It’s a simple and practical evaluation tool to break down insights about your competitors into their strengths, weaknesses, opportunities, and threats.

Step 4. Define your TAM, SAM, and SOM

Before investing your time and money in a new business idea, you need to figure out how many customers you can expect. To do so, you must be aware of three market subsets:

• The total available market (TAM) spans all people in the world that can potentially be your customers. TAM identifies the largest possible amount of revenue you can bring in by selling your product or service across the globe. Use TAM to measure your startup’s potential for growth.
• The serviceable available market (SAM) refers to the portion of TAM you can reasonably access based on your geographical reach, regulatory requirements, or pricing/quality requirements. SAM reflects the real market you can embrace with your product/service.
• The serviceable obtainable market (SOM) identifies the portion of SAM you can actually service, considering that you have competitors and can’t make the entire market consume only your product or service.

You can figure out your TAM, SAM, and SOM using two approaches:

• Top-down research is when you move from the general market to your target audience. Typical top-down research analyzes how big macroeconomic factors (e.g. technology trends, federal funding, trade balances, unemployment rates, energy consumption, inflation rates, etc.) affect the market to enable you to predict what market share you can capture.
• Bottom-up research is when you begin with your local target market and move to worldwide demand. This reverse process pushes off your core business metrics (e.g. number of paying users, products sold, average check, etc.) to make assumptions about your overall market reach.

If you plan to create a pitch deck for investors, it’s sensible to include detailed data from both top-down and bottom-up methods individually first and then collectively.

For example , say you’re thinking of making a food delivery platform like Instacart . Conducting TAM, SAM, and SOM market research for your app idea through the top-down approach can look like this:

The platform-to-customer delivery segment is predicted to bring in $173 million in revenue in 2021 according to Statista . This will be your TAM.

You plan to start from your country to test your custom food delivery platform before operating worldwide. If your country is Saudi Arabia, the projected revenue that local food delivery platforms will generate in 2021 is $1,605 million . This will be your SAM.

Considering the number of available deliverers and stores eager to partner with you from the get-go, you can process 5% of all orders and capture $80,250 a year. This will be your SOM.

Step 5. Set up your market research criteria

Based on your business environment overview, competitor analysis, and top-down/bottom-up estimates, it’s time to determine your core parameters needed to proceed with market research for your new product.

The market share you intend to conquer. To calculate your target market share, you need to:

• Decide on a fiscal period (month, quarter, year, or multiple years)
• Calculate your company’s total sales over that fiscal period. If you’re starting your business from scratch, you can think over the numbers generated by your competitors and calculate your potential revenue using a simple formula: Company's total revenue = Number of units sold per fiscal period x Average market price
• Divide your company’s total sales by the industry’s total sales from the previous business environment analysis. The formula looks like this: Market share = Your company's total revenue / Total market revenue x 100%

Depending on the specifics of your business, you might need customer-centric estimates. In this case, you can apply the customer market share formula:

Customer market share = Your company's total customers / Total market customers x 100%

In the end, you will be able to determine by how much you want to increase your current market share or the percentage of the market you want to capture.

The time you’ll need to obtain the market share. To roughly estimate the time you’ll need to capture your market share, rely on your competitors’ average conversion rate. Having specified your SAM and SOM, you can calculate how many leads you can get in a fiscal period (for example, in a month) and then divide the amount of your SAM by the number of your paying customers:

Time to obtain market share (months) = Serviceable available market (SAM) / ( Serviceable obtainable market (SOM) per month x Conversion rate )

Your initial marketing budget. As for funding, more often than not, the budget you require to market your new tech startup doesn’t align with your available budget. At this stage, write down the budget you plan to allocate for marketing a new product or service and move to the next step.

Step 6. Calculate your required marketing budget

Let’s figure out the marketing budget you’ll need to promote your startup using the table below. It calculates data for a real estate mobile app . If you’re interested in how to do market research for an app idea, this calculation can help you align your required marketing budget with available budget by changing variables, for instance, desired market share or conversion rate.

If the required marketing budget is too high, you can change your initial criteria. For example, you can reduce the desired market share, cut operational expenses, or increase your average check size.

Also, keep in mind that we haven’t included the cost to develop your product. For example, the mobile app MVP development cost can start from $40,000 and go up depending on numerous factors such as the complexity of app features.

Finding the balance between your available marketing budget, the project development cost, and the average check is part of a more sophisticated revenue valuation methodology called unit economics . We plan to discuss this topic in subsequent posts.

For now, remember that correctly estimating the average check size is key to targeting the right customers who are able to pay. That’s why it’s better to determine your average check size before analyzing potential customers.

Step 7. Analyze your target users

This step is dedicated to identifying who will use your new product — that is, to creating your target customer persona .

You need to think about who can pay your average price in the area in which your business will operate. This will enable you to figure out your persona’s average income, and therefore your persona’s occupation. By using online portals like the one provided by the U.S. Bureau of Labor Statistics , you can clarify your target demographics and draw up a realistic customer persona.

If you work in the B2B segment, your average price and your customer persona can help you create an ideal customer profile (ICP) — a fictional company that would benefit the most from buying and using your product or service. Your ICP needs to describe the company’s industry, location, size, budget, revenue, funding or IPO status, and so forth.

After you have a clear picture of who your end customers are, it’s time to figure out the perception of your startup idea by asking people who correspond to your customer persona. There are different ways of asking about the perception of your idea, including:

• Focus groups
• Observations and field trials
• Social media listening
• Forums and business communities

Let’s highlight the most effective tools you can use to analyze your target audience while conducting problem and solution interviews:

Problem interview. Before offering something to your customers, you should discuss the problem you will solve and typical ways to solve it. It’s hard to compete with the effectiveness of in-person interviews or Zoom interviews, but tools like SurveyMonkey are increasing in popularity.

SurveyMonkey lets you create a customized survey and send it to individuals who meet the criteria of your ideal customers, starting from $1 per answer. Thus, you can narrow the circle of interviewed people, get valuable information, and as a result, save your time and money.

Solution interview. Once you come up with a solution for a problem, you need to figure out whether it satisfies your users. Offer respondents whom you’ve interviewed to test your pilot product or service and tell about how well it meets their expectations. If you’re doing market research for app development, it’s better to pitch your idea in the form of an interactive app prototype , focusing on making an intuitive UX design, not UI .

You can use Zoom to provide solution interviews. Besides using Zoom for testing your pilot app, you can refer to UserTesting . This online platform provides you with video records of how respondents interact with your app while moving from one screen to another. You may also like an app marketing strategy .

Every step of this startup market research guide is aimed at collecting the most important and comprehensive data you need to continue startup development. Knowing your business environment, main competitors, and target audience will help you:

• Create a value proposition map
• Compile a business plan
• Draw up a product requirements document
• Improve your product’s functionality
• Expand your target audience

Market research for a new business never stops and continues as long as your project is alive.

Market research for apps and websites is our strong point

Any complex task can be subdivided into easy-to-do steps, and market research for a startup is no exception. In this article, we’ve shared a simple approach to conducting market research for a business idea. But since every business has unique requirements, any one-size-fits-all market research guide can only be a starting point.

To make your make your market research for a new product effective, you might need an experienced product manager alongside a tightly knit development team . At Mind Studios , we emphasize a comprehensive discovery stage before starting to develop a mobile app or website. Benefit from our experience.

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• Site Building
• Quick Reads
• About Academy
• Perspectives
• Introduction to Market Research: What It Is and Why You Need It

• Introduction to Market Research: When and How to Start
• Conducting a Situation Analysis: The SWOT Analysis
• Using Your SWOT Analysis to Drive Your Market Research
• Conducting Competitor Research 
• Resource List for Secondary Market Research
• Conducting Primary Market Research
• Creating a Killer Market Research Survey
• Using In-Depth Interviews and Focus Groups for Your Market Research
• Best Practices for Moderating and Analyzing Interviews and Focus Groups
• Conducting Observational Research for Your Business

Have you ever read a mystery novel you really enjoyed? If so, you understand the thrill that comes with getting to know a cast of characters, finding clues, and using logic to unlock the story’s secrets.

In this introduction to market research, we’re treating this topic a bit like solving a mystery. You’re working to understand the mysteries of your target market and competitors (think of these as the characters in your story). You want to understand what motivates, encourages, and frustrates your consumers. In the case of your competitors, you want to anticipate their game plan to stay a step ahead in your market.

Market research is an ongoing challenge to learn more about your business, your audience, and your industry. When carried out successfully, it can help you see the big picture, as well as where you fit in that picture. Because it relies heavily on data and analysis, you can uncover the right clues to solve the mysteries of your market.

Even though we’ve been talking about fictional stories, it’s likely that you’ve already been conducting market research in the real world—intentionally or not—for as long as you’ve been in business. You already know your customers are both the cornerstone and foundation of your business, so we’re here to help you learn everything you can about them.

In this two-part introduction, we’ll cover the basics—the what , why , when , and how of market research—to get you started solving mysteries.

What is market research?

Put simply, market research is the process of gathering information about your target market and the current state of your industry. Some research strategies can be complex and layered, but your main purpose is always the same. Your goal? To learn all you can about your consumer, so you can meet them where they are.

To get an answer, start with a question

Quality market research brings you answers, so you should start your process by formulating your core question to direct your research. These fundamental questions that can get you started on asking specific questions about your business:

• Who are your potential customers? When you research your market, you want to know how many consumers are out there, and what their interests and needs are. Once you’ve identified interests and needs, you can learn how your consumers look for solutions to their needs, and market your product more effectively.
• What products do your competitors offer? It’s good to size up your competition. Research what your competitors offer and how that differs from your product. Find out how much your shared market is willing to pay for a solution like yours, and what influences their choice between similar products. Learn from where and how your successful competitors are advertising their products, and from where unsuccessful competitors went wrong.
• Why do your customers purchase your product? If you’re selling a service or product, you likely already know how it fulfills one or more of your consumer’s needs. Don’t stop there: keep your product relevant by asking how your customers use the product once they have it, and what more it could do for them.
• Why do some potential customers choose not to purchase your product? No hard feelings: when a potential customer chooses the competition, it’s a learning opportunity. Find out what motivates them to choose a competitor’s product, so you can win over the next prospects.

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Let your research paint a picture

Market research allows you to step back and view the big picture, locating your place in the industry. Done correctly, this process brings you data, and data allows you to make informed decisions. After all, facts will always paint a more accurate picture than a gut feeling.

Data will also paint a more accurate picture of your current situation than previous outcomes of past business decisions. For example, just because a certain feature was popular in your last product doesn’t mean it will be in this one. Instead, listen to what your customer surveys , focus groups , and social listening tell you will be a desirable feature.

Navigating your changing market

If you’ve been in business for even a little while, you already know competition gets tougher by the day. As recently as fifteen years ago, your competitors were likely a handful of small, local businesses and you probably knew your customers through face-to-face interactions. Today, thanks to global ecommerce, you’re competing in a vast field of both local and international companies. The web is likely inundated with products similar to yours—perhaps some with cheaper price points, or some with a larger internet presence and high-ranking, professionally designed websites .

This is why market research is no longer a luxury reserved for big corporations with deep pockets (if it ever was). If you run a business of any size, understanding your market is the key to your company’s survival.

Why research your market?

As we mentioned, you’re probably already conducting informal market research on a daily basis, whether intentionally or not. Every time you chat with one of your sales reps about customer complaints, compare your prices with your competitors’ prices, or talk with a prospect about product features, you’re learning more about your market.

But there are numerous reasons why it’s worth formalizing this process. Perfecting your market research process can help you find answers you didn’t even know you needed.

Segment your target market

Market research reveals the socioeconomic, sociocultural, geographical, and personal structures of your target market. This helps you focus on specific segments so you can adjust your marketing, advertising, and promotional strategies. When you know more about your different market segments, you can create effective campaigns and compelling marketing materials that resonate with your niche audience—you’ll know ahead of time which email subject line or ad image works best for which segments. Furthermore, knowing your audience is just as important for retaining customers as it is for bringing in new ones. After all, 34% of consumers have admitted to “breaking up” with a brand because of “poor, disruptive, or irrelevant marketing messages,” and nine out of ten consumers report “developing an unfavorable attitude” towards a company that sent them irrelevant advertising.

Identify new chances to meet needs

Market research can help you discover under-serviced or ignored segments whose needs aren’t being met at all (for instance, a special group whose pain points no business has considered). Ask yourself: is there a gap in your market you can fill by adding new features to your product?

Market research reveals current customer opinions, giving you insights that may drive future innovations and product improvements (which in turn drive more sales). What else do current customers want? What are you currently doing right? What could you do better?

Find where you fit

Through market research, you’ll learn about your competitors’ products, services, pricing, and marketing strategies, as well as their customers’ sentiments. How do they attract and retain customers? What do their customers say about them? What does their content marketing look like? Where are they flourishing? Where are they unsuccessful?

To understand your place in your industry, you should work to clarify your unique selling proposition (USP), value proposition, and brand position. The more thorough your knowledge of your competition, the better you’ll understand how your offering is unique. This is crucial when it comes to differentiation statements (like your USP) and strategies (like your product differentiation strategy).

Get to know your consumers like your own family

Clay Christensen, professor at Harvard Business School, has observed that 95% of new products fail because businesses neglect to “crawl into the skin of [their] customer[s]” and empathize with them. Thanks to market research, you don’t need to be a mind-reader. You can test new products and features on your target audience and gather feedback directly from them. This sort of research and response can mean the difference between success and failure when it’s time to go on the market.

Avoid unpleasant surprises

We already mentioned one risk—launching a dud product—proper market research can mitigate. Market research can also help avoid bad brand positioning and poor pricing strategies. Knowing your market helps you recognize and prepare for economic and industry shifts. When you know your consumer’s needs, you can test and run ad campaigns that resonate with your target audience. If your business is an ongoing story, market research helps you anticipate what happens next, and keeps you from being surprised by unpleasant plot twists.

Thorough market research offers a multitude of benefits, and this short list only gives you an idea of what you stand to gain. Research your key questions and pay close attention to what you find—this is how you meet your consumer’s needs.

In our next section, we’ll dig into when you should conduct market research, and how you can get started.

David Elkins

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Market Research (2024): 12 Techniques for Effective Market Research

Home » Market Research   | 🕑 

Gust de Backer

November 4, 2023.

Market research is important for any business….

Most companies fail because they develop something the market doesn’t want or because they don’t move with the market fast enough.

I’m going to show you:

• What market research is
• What components are involved in market research
• How to do market research

Let’s start quickly…

Table of Contents

What is market research?

Market research consists of surveys and analyses that identify your market, or competition, customers and positioning.

It is easy to outsource market research, but it is also easy to do yourself. In fact, market research gives you the most important insights you need to set up or grow your business.

Why is market research important?

The book The Lean Startup states that the number one reason start-ups fail is because they bring a product to market that no one is waiting for:

Market research allows you to understand what the market wants and where the market is moving. A problem-solution fit or product-market fit helps measure your progression of this.

Marketing myopia

The goal is not to sell your products but to provide the customer with his needs. Customers never need a product or service only need the solution.

The goal isn’t to sell things, it’s to satisfy customer needs. – Theodore Levitt

12 components of market research

In doing market research, I always distinguish between the qualitative and quantitative research:

1. Quantitative research

Quantitative research focuses on data that is expressed in numbers, tables, graphs and/or charts. It’s particularly used for gathering facts of issues and matters about which quite a bit is already known.

1.1 Desk research

The term actually gives it away a bit, desk research is the research you do at your desk.

Collecting information based on existing research (also called secondary research) is desk research.

The benefits of this are:

• It can save time.
• The costs are lower.
• A lot of data is available.

The disadvantages are:

• Information does not connect seamlessly to the objective.
• Existing data may be outdated.
• There may be subjective perception.

1.2 Market segmentation and size

Market segmentation is generally done on 5 different components:

• Demographic criteria : components such as age, life stage, gender, ethnicity, culture, etc.
• Geographic criteria : consider country, region, city, size of city, climate, etc.
• Socio-economic criteria : income, occupation, education, etc.
• Psychographic criteria : personal characteristics, lifestyle, etc.
• Behavioral criteria : loyalty, degree of use, buying frequency, digital intelligence, usage, etc.

Dividing the market into certain segments helps you to:

• Align business strategy with different types of buyers.
• Customer-centric marketing strategy.
• Proper positioning for each type of buyer.

To effectively and efficiently determine your go-to-market strategy and the size of your market, it is helpful to use the TAM SAM SOM model:

This model allows you to divide the market into 4 segments so that you can focus your resources on the most potential market, but still have a good picture of the total size of the market.

Also, the TAM SAM SOM model allows you to bridge the ‘Chasm’ between the Early Adopters and the Early Majority:

Indeed, the Early Adopters are content with a solution that is not quite perfect yet while the Early Majority wants a simple, easy and effective solution.

1.3 Search volume

Also a well-known way to determine how much demand there is from the market is a keyword survey:

By looking at search volumes and competition, it is possible to estimate how much demand there is for a particular product or service and how much competition there is to meet that demand. Using a tool like SEMrush or Ubersuggest , you can do this easily.

1.4 Trends and developments

What is easier to start a business than to respond to current trends and developments …

By setting up your business around a trend or development, it is possible to jump on a gap in the market where there is a lot of demand, but where there is still (relatively) little supply.

Think for example of the trend of online shopping, by setting up a webshop early for products that are standard and of which it is difficult and expensive to place them all in a store (books 😉 ) you can respond perfectly to a changing landscape.

The DESTEP analysis allows you to identify trends and developments, which will be covered later in this article.

1.5 Competition

Most markets have some form of competition. Even the blue ocean market often has competition, as Spotify entered a blue ocean market, but still competed with CDs.

With competition, you can look at several things:

• Average revenue
• Positioning
• Price/quality
• The product range
• The service and support
• Distinctive character
• Target group
• Strengths/Weaknesses
• Costs to switch

New Lanchester Strategy

A market can be divided using the New Lanchester Strategy :

• One company has more than 74% of the market share, you then speak of a monopoly . This type of market is extremely difficult to approach.
• The combined market share of the market leader and the second largest company is more than 74% and the market leader is 1.7 times larger than the number two. This is referred to as a duopoly . This market is also very difficult to approach.
• A company with 41% market share that is at least 1.7 times as big as the number two can be labelled as a market leader . In this type of market it often works well to introduce a new segment.
• If one company has no more than 26% market share, anything is still possible.
• If the largest market share of one company within the market is less than 26% then there is no real market leader, this market is relatively easy to approach.

1.6 Starters and stoppers

Look at how many people start and stop each year within your industry, this indicates how healthy your industry is. If many companies go bankrupt, it is a risk, but also an opportunity if you can create a more efficient business model .

You can find this information online at the Chamber of Commerce.

1.7 Surveys with closed questions

Closed-ended surveys are also part of quantitative research, but ideally are used only when validating a particular assumption or analyzing a benchmark or result.

2. Qualitative Research

Qualitative research focuses on words and meanings to understand concepts, thoughts or experiences. This type of research is particularly useful in gaining insight into topics about which there is still little knowledge.

2.1 In-depth interviews

An in-depth interview can be used for:

• Discovering a problem in the market
• Discover solutions to a problem
• Validate problem in the market
• Validate solution to the problem
• Mapping the Decision-Making Unit .

Some rules in conducting customer interviews:

A few more learnings I can share from experience:

• Introduce yourself as someone who is doing research, not someone who is trying to sell a product. It is important not to use the word ‘research’, but to start with ‘Can you help me?’ or ‘I spoke to … who referred me to you’.
• Compliments about the solution is a form of noise, you are not looking for compliments but for concrete and hard validation such as a signature or visible motivation towards the product or service.
• Any feedback you get about future situations is not useful , ‘I don’t have a problem now, but maybe in the future’, ‘If you add A, B and C then I do want to work with you’.
• Don’t generalize , you want to know specifically what the problem is, how big that problem is, what the consequences of that problem are and who is involved in the problem. The same applies to the solution.
• H earing someone say something once is not validation , you want to have as many conversations as possible to be as sure as possible of your findings.
• If you can’t find a specific niche with a specific problem then it is impossible to create a solution for it.

Possibly you could use the STAR / LSD method for this or immerse yourself in Customer Development .

Customer problem statement

Finally, you can then complete a customer problem statement:

“Our [target audience] is experiencing problems with [customer experience]. Based on [considerations], they are now solving this with [alternative solution]. The disadvantages of this are [complaints].”

2.2 Surveys with open questions

Surveys with open questions are also a form of market research. For example, consider a converters survey, or a survey that you put on the thank you page of your web shop or form to ask some open questions.

Hotjar even offers a Product-Market Fit survey to validate your Product-Market Fit .

Optionally, you could also send respondents a questionnaire with open questions, but then I would personally prefer an in-depth interview, because then you can ask more questions.

2.3 Target group research

Concrete insight into the different segments of your target audience based on:

• What they find important
• What kind of people they are
• How much they have to spend
• What the ages are

It’s also possible to do review mining of your competitors or yourself to get some voice of customer data.

2.4 Expert interview

Interviews do not have to be with (potential) customers only, but can also be with experts within a branch or industry. Ask for example about their experience, what they notice, what they see and if they can confirm or refute your assumptions.

2.5 Observations

Sometimes people don’t say what they do and don’t do what they say….

The solution to this is to observe them and see what the behavior is and perhaps whether the behavior changes with a particular solution.

Observe, take notes and perhaps ask if anyone can explain their behavior.

Market research example

Suppose you want to start a construction market (chain), you can start by dividing the market into different segments/personas. For example:

• Non-handy young adults
• Handyman father
• Independent worker

Questions you can answer with market research in doing so:

• What are characteristic traits of this persona?
• What is important to this persona?
• How does this persona make a purchase?
• What does the customer journey look like?
• What are important aspirations of this persona?
• How big is the market?
• What are demographics of this persona?
• Where does this persona live?
• What type of home does this persona have?
• What does this persona have to spend?
• How does this persona go about seeking information?
• What does this persona perform themselves and what does this persona outsource and why?
• What is the frequency that this persona interacts with you?
• Whose opinion does this persona consider important?
• What media can this persona be reached with?
• What does this persona consider important in making a choice?
• Why does this persona choose a particular brand or solution?
• How might this persona be influenced?
• What solutions or competitors does this persona consider?
• How much is the persona willing to spend on a solution?
• What problem does this persona have?
• What solutions does this persona use for their problems?

Well-known marketing models

There are also some well-known marketing models that you can use to conduct market research, such as:

• Potential entrants
• Strength of substitutes
• Supplier strength
• Buyer power
• Competitive power of players in the market among themselves
• Demographic factors
• Economic factors
• Socio-cultural factors
• Technological factors
• Ecological factors
• Political-legal factors
• Context Map : is very similar to the DESTEP Analysis, but slightly more comprehensive.
• Market Development
• Market penetration
• Diversification
• Product development
• Value Strategies of Treacy and Wiersema : a company should be good at 3 of the value strategies and excellent at one of the value strategies.
• SWOT Analysis : identify strengths, weaknesses, opportunities and threats.
• Question marks
• Total Addressable Market
• Serviceable Available Market
• Serviceable Obtainable Market

Red or Blue Ocean

There is a difference between a Red or Blue Ocean market:

Based on this, you can more easily choose how to approach the market:

• Existing market (Red Ocean)
• New market (Blue Ocean)
• Niche strategy
• Cost-leader

Start Investigating…

Now it’s your turn, Get Out Of The Building and start researching.

I’m curious, what do you think is the most efficient form of market research?

Let me know in a comment.

P.S. could you use some extra help? Send an e-mail to [email protected]

Frequently asked questions about Market Research

Market research consists of surveys and analysis that identify your market, or competition, customers and positioning. There are many different types of research, but desk research combined with customer interviews and questionnaires are often used.

Good market research consists of different customer segments/personas, in-depth understanding of the competition, estimation of the market size, and content understanding of different customer segments.

Exploratory: exploratory research into a problem statement. Descriptive: descriptive research into a problem statement. Explanatory: research into relationships between variables. The requirements of a market research study are a report of the findings, a good questionnaire and the representativeness of the study.

Market research aims to explore the market, to know what is going on, who is in the market, who are your customers, what your customers care about, etc.

I try to help business surpass their growth ceiling with my content.

Sounds interesting?

Let’s connect on LinkedIn!

Account-Based Marketing | Brand Identity | Business Strategy | Customer Development Process | Customer Journey | Decision-Making Unit | Market Research | Marketing and Sales | Marketing Strategy | TAM SAM SOM Model

Gust’s Must-Reads 👇🏼

• TAM SAM SOM
• Value Proposition
• Brainstorming
• Decision Making Unit
• Product-Market Fit
• North Star Metric
• Market Research
• Customer Development
• Growth Hacking
• Brand Identity
• Customer Journey
• Account-Based Marketing

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I have been checking out many of your stories and i can state pretty clever stuff. I will make sure to bookmark your site.

Great to hear! If you have any more questions, feel free to ask them.

Gust du Backer, this was a fascinating read! Market research is all about acquiring market insights and marketing aspects. It addresses all elements influencing both, such as consumer and sales analysis, among others. Whether we are analyzing data for the red or blue oceans, I feel that market research is crucial, and the key aim is to listen to customers’ opinions, rely on credible sources, and understand the stages of what you do to ensure the market strategy’s success.

Thank you, Philip!

Great piece article with complete step-by-step clear ideas about market research techniques. All businesses should undergo a market research analysis before entering into the real world. It helps in knowing their competitor better and gaining crystal clear ideas about their target audience.

Thank you, Dhananjay!

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• How to do market research for a start-up

Last updated

30 January 2024

Reviewed by

If you are involved in a start-up, you probably have a lot of big ideas about how to proceed. From the overall direction of the start-up to new products you want to pursue along the way, there are endless ways to test your creativity and expand the organization's horizons.

However, it's important to know how customers will react to these new products before you invest in expensive production costs.

Although market research is necessary for a start-up, it isn't always easy. There are considerations such as different types of market research, costs involved, and more.

Our guide will help you discover how market research can help your start-up and how to go about it. Let’s dive in.

• What is market research for a start-up?

Market research is the gathering of information about your target audience to determine the viability of a product or service. There are different methods of market research, including:

Focus groups

Customer interviews

Data analysis

Market research is especially important for start-ups, as it can persuade investors and stakeholders to invest in your business. When you understand how to conduct market research, you'll be empowered to protect your start-up, even in challenging economic conditions.

If your start-up is relatively new, consider carrying out market research every time you develop a new product or service. Even in an established start-up, using market research to ensure your product or service will be well received is the smartest way to make business decisions.

• Why is market research vital for entrepreneurs and start-ups?

Market research is essential for start-ups and entrepreneurs to make predictions about profitability. Research and data can help guide future business decisions, increasing revenue and developing a smarter sales and marketing strategy. Market research can also provide deep insights into the target market you're hoping to serve.

Market research helps you test ideas

One of the most obvious benefits of market research is that it can help you test new ideas. Just because you and your stakeholders are invested in a product and believe in it, that doesn't mean it will sell well or resonate with your target customers.

Market research can help you understand if the timing is right for your product or solution and help you anticipate demand for the product. With proper market research, you can also gather information on pricing, marketing strategy, and product messaging that could help you become more profitable.

Conducting market research helps attract investors

Investors can help start-ups go to the next level. However, to attract investors who believe in your business strategy and solutions, you'll need to show them hard evidence that you’ll be offering what customers want.

Market research shows potential investors there's a viable market for your product or services and makes their decision to invest easy. Keep a paper trail of any previous market research you've done, so you can show interested parties the work you put into your products.

Market research makes start-ups less likely to fail

More than two-thirds of start-ups never deliver a positive return to investors , eventually shutting their doors. While there are many reasons why start-ups fail, one of the top reasons is a lack of market need for the start-up's products or services.

Market research helps you anticipate the needs of your target market, so you can enter the business landscape with the knowledge you need to grow and thrive.

There's not just one foolproof way to succeed as a start-up. However, by investing time and resources in market research, you'll get a headstart that can help you beat the odds.

• Types of market research

There are two main types of market research: primary and secondary. If you've never done market research for a start-up before, consider which would best suit your organization's needs.

The most comprehensive approach involves using both kinds, so you can develop a more holistic understanding of your target audience and what your competitors are doing.

Primary research

Primary market research involves gathering market data straight from the source. You conduct primary research with clear objectives in mind, so you can gain insights your competitors might not have access to.

Examples of primary research include:

In-person surveys

Secondary research

Secondary market research is data-gathering from secondhand sources, such as:

Industry publications

Public and private company databases

Academic journals

While secondary research removes you from your target audience slightly, it allows you to gain a comprehensive understanding of industry trends.

• Methods of market research

To determine the type of data you'll collect during your market research, establish whether you plan to conduct quantitative or qualitative research. Both are important for gaining perspective into how your product or solution will resonate with your target audience.

Quantitative research

Quantitative research deals with numbers and statistics, gathering large numerical datasets that offer insight into common market challenges and industry trends. Quantitative research is most often expressed in numbers and graphs and can be used to establish certain facts about a topic.

Quantitative research can be done via surveys that include:

Closed-ended questions

Observations recorded as numbers

Qualitative research

Qualitative research is carried out with insights gathered in words designed to identify the reasons behind customers' buying habits. This type of research is used to clarify the "why" behind customer experiences.

Qualitative research is conducted through:

In-person interviews

Open-ended survey questions

Conducting market research requires careful planning and consideration. It can also take a great deal of time and internal resources.

Many start-ups opt to have a project manager oversee the process, but other team members will likely be required along the way. If you don't have the resources to designate one team member for market research, consider hiring a third-party research company to manage the market research process for you.

Either way, the same general process, as outlined below, will help you stay on task and gather useful insights. Keep in mind that one round of market research might not be comprehensive. It can take several research projects to give you an overall picture of how a solution or product is perceived, depending on what particular feature or aspect you want to highlight.

1. Define the goal

Before you start your research, decide what questions you hope to have answered by the end of the process. This will help you to:

Identify your purpose and goal

Stay focused

Determine the right research subjects

2. Decide what type of research to conduct

After you have defined your project goals, select the type of research that is most suitable to achieve them. Depending on your hypotheses, either primary or secondary research might be more appropriate.

Most start-ups use a hybrid approach and blend research methods and types.

3. Identify demographics and find appropriate research subjects

If you're planning on conducting primary research, identify and recruit subjects. This can include:

Past customers

Existing customers

Potential customers

You can recruit subjects via a combination of methods, including social media, word of mouth, or even hiring a third-party firm to recruit and study participants.

4. Conduct research

After you have defined your target demographic, located research subjects, and verified your research method, you can execute your plan.

If you're conducting in-house market research, involve multiple members of your team, especially to review and vet the questions in surveys and polls. Your questions should be neutral and unbiased, so participants feel encouraged to answer honestly.

5. Analyze the results

Once the data has been collected, you and your team can sort and analyze it to check for trends or patterns. In most scenarios, you'll be working with two types of data, qualitative and quantitative, so you will need to approach analysis differently for each.

This analysis process takes time, whether you're analyzing the data in house or working with an outside firm. Don't rush it, and take time to thoughtfully review all the responses.

6. Determine action items

After analyzing your data, draw up an actionable plan that includes the next steps for your start-up.

If your market research involved customer responses about a product, your action plan should include improvements or tweaks to the product, based on what research participants had to say. Whether the responses you receive are positive or negative, making an action plan is the best way to keep moving forward and meeting your customers' needs.

• How much does it cost to do market research for a start-up?

Market research requires considerable resources, making it time intensive and often costly. The actual cost of market research for a start-up varies greatly, depending on:

The size of the project

The size of your start-up

The number of team members you can devote to the research project

Your personal preferences

Many start-ups work with outside firms, which can be expensive. Don't hesitate to interview multiple external firms, if you don't already have one in mind. Some firms work exclusively with start-ups and are experienced in conducting comprehensive market research in a streamlined, efficient way.

There are other costs associated with market research. You might reward research participants with an incentive, such as a gift card, free product, or discount. While this isn't necessary, it can entice more participants to take part in your study. Be clear about what you're offering, and never try to trick people into participating by promising a larger prize than what you're offering.

There are cost-effective ways to conduct market research. You can use free trials of software products designed to assist with customer research , and many cities provide market research grants to qualifying small businesses.

Market research is an important part of the growth and development of your start-up. Don't skimp on performing quality market research, even if it does cost you time and money.

• Market research should be an ongoing commitment

Market research should never be a one-and-done endeavor. To continuously find new ways to serve your customers better and outrank your competitors, perform market research regularly. This will allow you to improve your products and solutions while growing in efficiency and discovering new and innovative methods of enhancing your viability as an organization.

What is a SWOT analysis for a start-up business?

A SWOT analysis for start-ups is a framework that allows stakeholders to evaluate their:

Opportunities

While businesses of any size can benefit from a SWOT analysis, it is especially valuable for start-ups, as it looks at the existing internal competencies in place, alongside any challenges and opportunities.

A SWOT analysis doesn't ensure a start-up's success, but it can provide a helpful, comprehensive look at how well a start-up compares with the competition and how well equipped it is to move ahead.

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Grow » marketing, what are marketing personas .

Marketing personas are fictional customer profiles that help you better target your marketing messaging and outreach.

Marketing personas are a tool to help marketing teams craft better, more targeted outreach to potential customers. A marketing persona is a fictional representation of a specific segment of your target audience. This composite sketch features demographic, psychographic, and behavioral data about your key audience to personify the user on the other side of your marketing campaign.

Marketing personas are useful for directing and honing your marketing messaging, improving customer engagement, and ultimately, driving sales and brand loyalty. Here’s how to build marketing personas for your business.

Start with research

The most helpful marketing personas go beyond basic demographic information to give you a clear picture of your key audiences. Use both quantitative and qualitative analysis to inform your profiles. Draw from primary and secondary data to carry out these analyses.

Quantitative analysis involves diving into your customer data to find patterns and trends from which you can create personas. Use quantitative data such as:

• Demographic information, including gender, age, location, income level, education, etc.
• Purchasing information, including average cart size, cart abandonment rates, frequency and recency of purchase, etc.
• Buying habits, such as which social media sites they use, online vs. in-person engagement, and mobile app engagement.

Qualitative analysis can include marketing surveys, focus groups, and interviews to learn more about your customers’ psychographics. Psychographics in marketing refer to a customer’s beliefs, values, and goals. Qualitative data points are critical: Two people may show similar purchase habits, but be following those habits for different reasons.

“Remember, even though users may use the same product, they might use it to solve different problems. For example, a consumer can purchase a new computer for personal work or use, giving them different motivations for buying the product,” wrote MailChimp .

Ultimately, gather as much data as possible to start building 360-degree marketing personas.

[Read more: How to Conduct Market Research to Better Understand Your Customers ]

A journey map is a visualization of the path your personas might take as they discover, buy, and use your product or service.

Santiago Castillo, Think with Google

Look for patterns to build personas

Look for similarities or patterns you can identify from your customer data. Customers with common characteristics give you the basis for creating fictional personas.

There are dozens of templates online that can help you start creating fictional characters to personify your data. HubSpot , Miro , and SEMRush all have tools to help you build personas for your marketing strategy. Or, you can do it by hand — just give each persona a narrative, name, and list of characteristics.

“As you flesh out your customer personas, be sure to describe both who each persona is now and who they want to be. This allows you to start thinking about how your products and services can help them get to that place of ambition,” wrote Hootsuite .

Create a journey map

A journey map takes a marketing persona to the next level by describing how a persona engages with your business. “A journey map is a visualization of the path your personas might take as they discover, buy, and use your product or service. Your maps should identify all the moments or touchpoints when and where your personas would interact with your brand,” wrote Think with Google .

Journey maps are essentially smaller sales funnels tailored to marketing personas, describing the key moments when your brand can foster loyalty or drive purchase intent. These journeys help you put your marketing personas to use, informing the assets and budget you’ll need.

[Read more: What Is a Market Segment and How Do You Find Yours? ]

Translate your personas into a marketing strategy

The marketing personas you develop will help you determine which marketing channels to leverage, the messaging that will resonate best, and how to allocate resources according to your most valuable persona groups.

“With up-to-date buyer personas, decisions about who to target and how to communicate with them become easier for your team,” wrote Shopify . “When you use personas you can expect increased engagement on your social media channels and a greater return on investment (ROI) for your online ads.”

Personas should be living and breathing (well, not literally) documents, so keep them updated regularly. It’s likely that as your business grows, your customer data will too. Make sure the marketing techniques still serve the people who make up your core audience by revisiting your personas annually.

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Prime London Sales Market Makes Hesitant Start to 2024

A developer once said that after a slowdown, you need no further bad news for two consecutive quarters for a recovery to take hold.

Perhaps an overly-simplistic rule but one that comes to mind when looking back at the last few months.

Inflation fell faster than expected in the final quarter of last year and by Christmas money markets were pricing in five interest rate cuts of 0.25% in 2024.

The positive mood didn’t last long into 2024 due to stubborn underlying inflation, as we explored here , and mortgage rates have begun to creep back up.

In the background is a swirl of bad news that includes an increasingly heated countdown to the general election and overseas military conflicts.

And then came this month’s Budget.

The key headline for prime London markets was the abolition of the non-dom tax regime from next April.

To date, those with non-dom status have not paid tax on their worldwide income for up to 15 years under a fairly complex set of rules, making the UK somewhat of a global outlier.

From next year, new arrivals will pay nothing for four years before paying the same as other UK residents, a simplification the government has said will raise £2.7 billion a year by 2028/29. There were 69,000 non doms in the tax year ending in 2022.

Current non doms may well feel the rules of the game have changed in the middle of the match but the property market in London’s most expensive postcodes could get a boost from next April when a two-year transition period begins during which they will only pay 12% on their worldwide income.

For a full reaction to the Budget including changes to multiple dwellings relief on stamp duty, please click here .

Meanwhile, the average annual price fall in prime central London (PCL) was -2.4% in February while the comparable figure in prime outer London (POL) was -1.6%.

It was an uncertain start to 2024 that can be seen on the chart below.

On the demand side, the number of new prospective buyers was 9% higher than the five-year average in February, according to Knight Frank data adjusted for leap years.

That was lower than the equivalent rise in January and reflects the slightly gloomier mood in the second month of the year in relation to the outlook for mortgage rates.

This change was also visible in the number of offers made, which is a good measure for buyer sentiment. While the number was up by 1% in January versus the five-year average, there was a 12% decline in February.

And while the number of instructions for sale was up 9% in February versus a 5% rise in January, that was the result of a the relatively higher number of market appraisals carried out in the first month of the year. Market appraisals were only up by 3% in February compared to a 13% jump in January.

For buyers and sellers, they should look for some hope in what the Bank of England says rather than what it does (it is unlikely to cut) when it meets later this month.

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More From Forbes

Top 10 ways to make money online in 2024, from research.

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AI makes it easier to start making money online, whether directly through offering AI services or ... [+] through using it to simplify your content creation and research efforts

There has never been an easier time to make money outside of a regular job, than in 2024. The opportunities and AI-powered tools that are available to freelancers and others seeking to make money online are endless—and you can do it, even with inflation and the rising costs of living.

Regardless of one's skill set, there is literally something to suit every professional. From the comfort of your laptop, you can do work that is highly flexible and can be performed on the go, or in between your regular job. And if you work remotely in your main job, you have even more time which you can dedicate to making money online.

However it's important to remember that there is no such thing as "get rich quick." Any scheme or website that promises you the ability to make money fast as an absolute guarantee, is most likely a scam. To make a considerable amount of money, you need to ensure you put your research and expertise to work, just like with any other job.

When looking for ways to make money online, be cautious and watch out for scammers. Never concede to sharing sensitive or personal financial information, unless of course you are using a legitimate freelance site such as Upwork, for example. And remember, if it sounds too good to be true, trust your gut—it most likely is.

With that caveat in mind, below is a list of 10 of the best side hustle opportunities that enable you to make money from home, according to research and analysis of sites including Upwork and Shopify.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024, 1. start affiliate marketing.

Affiliate marketing is an excellent way to create a passive income stream, and it works best when you have a solid content marketing strategy. To get started, write or record video content on something you're passionate about, and build a strong audience and following first.

The ideal number of followers and repeat content viewers you need will depend on the platform you're using, and the requirements of the brands you will be acting as an affiliate for. You can incorporate affiliate links across your website, and/or social media accounts.

But you'll need to ensure that the products you are promoting are ones that actually resonate with your audience. Otherwise, you are spamming them and delivering low value, and people will easily be able to read through it, which reduces your credibility because you're wasting their time.

2. Launch A Dropshipping Store

Dropshipping is an excellent way to make money in your free time while working from home, mostly due to its convenience in selling products without ever needing to store inventory. You can set up a store on a platform such as Shopify, for example, and you would merely be responsible for developing the business model so that you can attract and engage customers, and of course, make sales.

Your suppliers would ship the product directly to your customers, so this takes away the need for purchasing storage space or piling up your garage with items. This model is also highly flexible as you can quickly adapt to market changes with minimal loss.

Establish partnerships with brands so you can make money and represent them through affiliate ... [+] marketing, influencer marketing, or both

3. Make Money As A Social Media Influencer

The global influencer marketing market size has more than tripled since 2019, hitting a record estimate of $24 billion in 2024. This can be attributed to the rise of online and social media usage during and after the pandemic.

With more than half of the global population having social media accounts, it only makes sense for avid marketers to collaborate and establish partnerships with social media influencers as part of their brand and product awareness campaigns. This is where you would come in.

To begin with, you need is a strong passion or interest, and your personality. Create a unique personal brand on a platform such as YouTube, TikTok, or Instagram, and as your follower count grows, your social media presence and social capital will become more valuable to brands looking to partner with you. You can eventually join influencer platforms where brands are looking for partnerships, such as Aspire.io, or Open Influence.

4. Become An Online Tutor

The online tutoring market is projected to reach $21.8 billion by 2030, so it's clear to see that demand for online tutors is on the incline. As an online tutor, you can teach any in-demand subject using video-conferencing tools, and even join freelance teaching platforms to create a profile and advertize your services.

5. Edit And Proofread AI Content

Not too long ago, content writing, editing, and proofreading was touted as an excellent way to make money online. However, the state of things has changed considerably because of AI, and now there are AI tools which can generate content easily and within seconds, such as Jasper AI or ChatGPT, which means anyone relying on this as a side hustle is at risk of being replaced. However, even these tools do have their limitations and, used on their own, can be factually inaccurate, have grammatical errors, or appear to be unnatural and robotic.

As an AI content proof-reader or editor, you can fact-check content that has been generated by AI, for business clients, and soften the tone so it reflects their brand voice and is free from error.

Below is another five ideas you can explore to make money online:

• Write and self-publish e-books
• Launch a podcast and get sponsorships/sell advertizing space
• Become a virtual assistant
• Sell crafts and handmade items on Etsy
• Deliver consulting services

Selling handmade items and crafts on Etsy can rake up a considerable fortune

Ultimately, boosting your income online isn't at all difficult to achieve. Find a section of your market that is underserved, and make your mark. With your internet and laptop, you can develop new skills, share them with the world, and make more money in the process.

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The stock market has skyrocketed to start 2024. Will it continue?

The S&P 500 has climbed 10% this year.

The stock market has surged out of the gate in 2024.

The S &P 500 -- the index that most people's 401(k)'s track -- reached a record high on Wednesday, putting the index up 10% this year. The tech-heavy Nasdaq has followed close behind with 9% growth over that period, while the Dow Jones Industrial Average has jumped more than 5%.

Markets have benefited from a flurry of good news: stronger-than-expected economic growth , breakthroughs in artificial intelligence , cooling inflation and anticipated interest rate cuts at the Federal Reserve, experts told ABC News.

“All of those things are coming into alignment right now,” Marc Dizard, chief investment strategist at PNC Asset Management Group, told ABC News.

MORE: Trump's Truth Social stock is soaring as the company loses money. Here's why.

But the good times may not last, experts said, predicting a downturn in the coming months that could erase some of the gains.

“It wouldn’t surprise me if we have some sort of correction in the spring or summer,” Dizard added.

Despite straining under the weight of the highest interest rates in two decades, the U.S. economy has sustained solid growth.

U.S. job gains far exceeded expectations in February, U.S. Bureau of Labor Statistics data earlier this month showed.

Gross domestic product, adjusted for inflation, grew at a robust 3.3% annual rate over the final three months of last year, according to data from the U.S. Commerce Department.

The flex of economic muscle has helped lift the stock market skyward, extending the gains well beyond typical top performers like tech firms or large corporations, Bret Kenwell, an investing analyst at eToro, told ABC News.

“There’s strength across the board,” Kenwell said.

Still, that broad-based performance has been accompanied by a stellar run among the group of corporate giants that make up the so-called “Magnificent Seven”: Alphabet, Amazon, Apple, Meta, Microsoft, Tesla and Nvidia.

Those companies have surged in large part due to enthusiasm about AI, experts said. Microsoft, for instance, holds a major stake in ChatGPT-maker OpenAI; while Nvidia produces the majority of chips behind the AI boom.

Nvidia has climbed 83% so far this year, a rate more than eightfold faster than the S &P 500. Microsoft has jumped 11%.

“There is a lot of hope around AI,” John DiFucci, a tech analyst at asset management firm Guggenheim, told ABC News.

The Federal Reserve, another source of optimism driving markets higher, said at a meeting earlier this month that a rough patch for inflation has not altered its plans for three interest rate cuts this year.

Inflation has fallen significantly from a peak of 9.1% but it remains more than a percentage point higher than the Fed's target rate of 2%.

Interest rate cuts would lower borrowing costs for consumers and businesses, potentially triggering a burst of economic activity through greater household spending and company investment.

“Rate cuts are at the front of people’s minds,” Kenwell said. “Between the Fed’s rate cuts and the underlying fundamentals, it’s all playing a big role.

Despite benefiting from positive economic trends, the market will likely turn downward in the coming months as traders balk at the high prices and firms struggle to preserve the gains, experts said.

MORE: AI is driving a stock market rally. What if the technology falters?

If inflation runs hotter than expected, the Fed may keep interest rates higher for longer than anticipated. That outcome, they said, would put downward pressure on markets.

“It would be realistic to expect some sort of dip,” Kenwell said. “The magnitude really is the question.”

Dizard, of PNC, agreed. The market could decline as much as 5% or 10% in the coming months, he said.

“That being said, I’ll take a 10% gain in the first quarter of the year,” Dizard added. “I love that.”

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Stock Market News for Mar 26, 2024

Wall Street ended lower on Monday to start a holiday-shortened week as investors looked forward to key inflation data scheduled for release later this week. All three major indexes finished in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) slid 0.4% or 162.26 points to close at 39,313.64 points.

The S&P 500 fell 0.3% or 15.99 points, to end at 5,218.19 points. Tech and industrial stocks were the worst performers.

The Technology Select Sector SPDR (XLK) dropped 0.7%, while the Industrials Select Sector SPDR (XLI) declined 0.6%. The Communication Services Select Sector SPDR (XLC) lost 0.3%. Eight of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq declined 0.3% or 44.35 points to finish at 16,384.47 points.

The fear-gauge CBOE Volatility Index (VIX) was up 1% to 13.19.

Stocks Taking Breather Ahed of Inflation Data Release

U.S. stocks ended mostly lower on Friday but the week turned out to be this year’s best for all three major indexes after Federal Reserve Chairman Jerome Powell in his first post-FOMC meeting statement said that the central bank still plans three rate cuts by the end of this year.

Investors’ sentiment is bullish and indexes are on track to wrap up March and the first quarter on a high. The S&P 500 is on track to end the quarter up 9.4%, with the economy on solid ground and robust optimism around earnings growth.

On Monday, stocks took a breather ahead of the release of key inflation data that will give them a better idea about the timing of the first interest rate cut. However, Wall Street is on track for its fifth straight quarterly gains. Investors’ sentiment is currently above its historical average, according to the American Association of Individual Investors’ sentiment survey.

Separately, shares of Intel Corporation ( ( INTC Quick Quote INTC - Free Report ) ) fell 1.7% on reports that according to new guidelines in China, the company’s chips would be blocked in government servers and computers. Intel has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Investors also focused on The Boeing Company ( ( BA Quick Quote BA - Free Report ) ) after it announced that its CEO Dave Calhoun will resign from his position by the end of the year as the planemaker continues to grapple with multiple safety-related issues. Shares of Boeing end 1.4% higher.

Economic Data

In economic data released on Monday, declined in February as mortgage rates increased during the month. The Commerce Department reported that new single-family home sales declined 0.3% in February to a seasonally adjusted annual rate of 662,000 units, its lowest level in two-and-a-half years.

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Ecommerce SEO: How to Get More Organic Traffic to Your Online Store

More visitors, more sales. Use these key ecommerce SEO tactics to get your products and your business found online.

Lauren Wallace

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Imagine you’re in the market for a new washing machine. What’s one of the first things you’d do? If you’re like most global consumers , you’d start your search online. You would likely type a simple phrase (like “front-loading washer”) into a search bar — and your product hunt would begin. The search results that appear after you hit Enter are not random; they’re the outcome of successful ecommerce SEO strategies. Ecommerce SEO is an art and a science. It involves all the actions you take to improve the visibility of your digital storefront and your products in search engines. Here’s everything you need to know to get your brand and products found online.

What you’ll learn: What is ecommerce SEO? How SEO works and why it’s important The benefits of organic traffic for ecommerce Five elements of an effective ecommerce SEO strategy How to use AI to maximize your ecommerce SEO efforts

How do you gauge ecommerce success?

Track these 10 vital metrics to monitor performance.

What is ecommerce SEO?

SEO, also known as search engine optimization, is the practice of optimizing your digital storefront to improve its visibility and rankings in search engine results pages (SERPs). These optimizations include various strategies, from content creation to more technical tasks like site architecture and indexing. The ultimate goals of SEO are to increase organic traffic to your site so you can increase sales.

Ecommerce SEO involves specialized best practices unique to the ecommerce space, including making the most of assets like:

• The ecommerce tech stack
• Ratings and reviews solutions
• Schema markup implementation 
• Product data feed optimizations

We caught up with Edwin Romero , an independent SEO consultant with a decade of experience, to get his take. He has played a strategic role in helping small, mid-sized, and enterprise level companies boost their rankings and increase organic traffic. According to Romero, “Ecommerce SEO is vastly different from other arenas in a lot of ways. You have to consider that your target audience wants to make a purchase. You not only have to think about how users find your brand via organic search, you must also consider how to position your business so that users will more easily convert on your website. This is why there are specialized best practices , tactics, and strategies within the ecommerce SEO space.”

Ecommerce SEO is vastly different from other arenas in a lot of ways. You have to consider that your target audience wants to make a purchase. Edwin Romero

How SEO works and why it’s important

Organic traffic is like good word-of-mouth: Although it’s technically “free”, you still need to work for it. Unlike paid media traffic, where every click costs money, organic traffic is earned from the trust of search engines, which will place your pages higher on SERPs if they feel your content is relevant and trustworthy.

Search engines use complex algorithms to determine which pages and websites should be ranked higher in search results. Another challenge? These algorithms change over time, making SEO success a moving target. Ecommerce SEO involves continually optimizing your content, structure, and technical aspects to align with these algorithms. This includes conducting keyword research, optimizing product descriptions and meta tags, improving website speed and performance, building high-quality backlinks, and more.

Over time, organic traffic can provide you with a steady stream of visitors and offset your paid media costs. You can then use more of your paid media budget to focus on your remarketing efforts and customer retention strategy.

The benefits of organic traffic for ecommerce

Cost-effective growth: Almost half (49%) of marketers believe organic search is the most profitable channel they use. That’s because organic content is the gift that keeps on giving. Once you create and publish organic content — whether it’s a blog post, article, or an optimized product page — the asset keeps contributing to your ranking success even when you’re not actively working on it. This is in stark contrast to your paid media efforts, which stop bringing in traffic the moment you stop paying.

Increase brand awareness: With ecommerce SEO, you can reach new customers who may have never heard of your brand before. 

Reach an intentional audience: The very nature of an online search requires a certain level of intent. Unlike a user running into a paid ad somewhere online, a user that takes the time to type a specific phrase into a search bar is already looking for certain products when they come across your content.

Boost credibility and authority: If your brand consistently shows up at the top of search results for a range of keywords, users are more likely to perceive your business as credible and trustworthy.

Crush competition: Organic traffic can help you literally push out the competition. The higher your rankings are, the lower your competitors’. The first organic result on page 1 of Google has a standard click-through rate of nearly 40% . The second position? Just 19%. That’s why many businesses take a competitive approach to ecommerce SEO, targeting specific keywords and attempting to outrank similar companies in the same industry. 

The benefits of ecommerce SEO go beyond the digital realm. For example, 60% of shoppers say they use their mobile devices to research and compare prices or products while they’re in a store . With the right SEO strategy, you can even reach shoppers in your brick-and-mortar stores.     

Five elements of an effective ecommerce SEO strategy

Although ecommerce SEO has many moving parts, a good strategy will always include a few specific aspects: 

1. Start with keyword research

Keyword research is the foundation of a successful ecommerce SEO strategy. It all starts with understanding the search terms and phrases your target audience uses to find products similar to your own. Here’s where to focus as you navigate the keyword research process:

• Identify your target audience: Determine who your ideal customers are and what they’re searching for online. Create detailed buyer personas to better understand their needs, preferences, and behaviors. Take some advice from Romero: “It’s easy to go after keywords that have high monthly search volume (MSV). But at the core, ecommerce businesses should focus on the needs of the target audience. Properly catering to target audiences enables ecommerce brands to form the right experience to push conversion through the organic search channel. This can be anywhere from page title and meta description optimization to warranty and returns information.”
• Brainstorm potential keywords: Think of all the relevant terms and phrases related to your products or services. Use tools like Google Search Console, Google Trends, or keyword research tools to generate more ideas. As you brainstorm, consider your customers’ needs — and what they may search for — at every phase of their journey. For example, what pain points do your products solve? Can you think of any how-to content ideas that could offer assistance when using your products? These ideas can be turned into blog posts, FAQ pages, and more.
• Analyze search volume and competition: Use keyword research tools to determine the monthly search volume for each keyword and analyze the competition for those terms. This will help you prioritize which keywords to target and how to plan your approach. Pro tip: Focus on keywords with high search volume and low competition.
• Target long-tail keywords: Long-tail keywords are longer, more specific phrases that may be less competitive, but can still generate significant traffic. For example, if you’re a home appliance company you might target the long-tail keyword, “Energy-efficient front-loading washer and dryer set” rather than just the shorter key phrase, “Washing machine.” Consider creating blogs and other educational content to target longer-tail keywords. Although commercial intent may not be the main goal for users who are searching longer-tail phrases, exposure through blogging and how-tos can improve brand awareness over time. According to Angie Erickson , SEO Senior Analyst at Salesforce, it’s important to have a long-tail keyword strategy. “Although long-tail keywords might have lower search volume, ranking for them makes a big impact for ecommerce sites. These terms tend to have higher conversion rates than more general keywords that are higher in the marketing funnel. For example, someone searching for a long-tail term like ‘women’s black leather combat boots’ is probably closer to making a purchase than someone searching for a broader term like ‘boots’”.
• Use keyword variations: Consider using variations of your target keywords, such as synonyms, plurals, or related terms, to capture more search traffic.

After performing keyword research, you can use the data to inform your approach to product naming, product categorization, and product descriptions, and ecommerce content marketing , amongst other things.

Branded vs. non-branded keywords

Not all keywords are created equal — and it’s important that your ecommerce SEO strategy focuses on two different kinds: branded and non-branded keywords. Each type of keyword serves a specific purpose. Branded keywords are search terms that include the name of your business. These keywords indicate high intent and propensity to buy — and they direct searchers who are already familiar with your brand to your website. 

Non-branded keywords are generic search terms that do not include your brand or product name. These keywords are crucial for reaching new customers in the early stages of the buying process; they capture shoppers who are actively researching or exploring options within a product category. By targeting both branded and non-branded keywords in your SEO efforts, you can increase both brand recognition and customer acquisition.

2. Implement on-page SEO tactics

On-page SEO refers to the optimization strategies and techniques implemented directly on your website’s pages to improve ranking in SERPs. When it comes to on-page tactics, it’s hard to overstate the importance of optimizing your product detail and product listing pages .

According to Erickson, “Successful SEO is a cross-functional endeavor. A partnership between SEO and merchandising teams presents a huge opportunity to drive organic traffic. For instance, SEO teams can recommend product listing pages for site merchandisers to build based on keyword research. Similarly, merchandisers can surface new pages and work closely with SEO teams to get them optimized and cross-linked.”

Successful SEO is a cross-functional endeavor. A partnership between SEO and merchandising teams presents a huge opportunity to drive organic traffic. Angie Erickson

To give these pages ranking power, start by creating unique and informative page titles and meta descriptions for each product page. Page titles are the most important individual HTML ranking factor on a webpage. They should be concise yet compelling, accurately reflecting the content of the page and incorporating relevant keywords.

Meta descriptions should provide a brief overview of the product, enticing users to click through to your website and learn more. These short descriptions play a key role to ensure that a user clicks through to a website from a SERP. Avoid keyword stuffing in both titles and descriptions, as this can negatively affect your rankings and user experience. Remember, the purpose here is to provide accurate information. Be sure to make the meta titles and descriptions unique for each product page to avoid duplicate content issues.

Creating optimized URLs is another important aspect of on-page SEO. URLs should be descriptive and user-friendly, incorporating relevant keywords whenever possible. Opt for straightforward, static URLs (rather than using dynamic parameters or session IDs). For example, instead of using a URL like “product.php?id=123”, use something like “product/front-load-washers”. This will make your URLs more readable and crawlable, improving your search engine rankings and user experience.

Internal linking also plays a crucial role in on-page SEO. By strategically linking to other relevant pages within your website, you can make it easier for search engines to understand the structure and content of your site. Use descriptive and keyword-rich anchor text when linking between pages to improve your rankings for relevant search terms.

3. Focus on content marketing

Content marketing is the digital face of your brand; it shapes how your target audience perceives and interacts with your business. It’s also a great way to showcase your expertise, educate your customers, and establish yourself as a reliable source of information within your industry (all things that search engines use to determine organic rankings).

Search engines favor authoritative and regularly updated websites, making it essential to maintain a steady flow of fresh content. Although it can be tempting to simply focus on product pages and the content shoppers see right before they make a purchase, there are other parts of the buyer journey that require quality marketing content. By incorporating relevant keywords and phrases into content assets like blog posts, how-to guides, and FAQ pages, you can improve your visibility and reach, making it easier for customers to find your products and services when searching online.

Consider all the questions your shoppers might have as they first learn about your market, brand, and products. If you’re a home appliance retailer, a blog article that answers the question “What are the benefits of a front-load washing machine?” is a surefire way to attract new potential customers who are researching their first major appliance purchase. You can also post helpful blogs and videos that detail instructions for installation and maintenance. The same strategy can be applied to any industry, from hobbies like cooking and home renovations to niche business-to-business (B2B) topics like “How do I calculate my manufacturing costs?”

Make every word on your product pages count

Learn how to write ecommerce content that converts.

4. Pay attention to technical SEO 

Technical SEO focuses on (you guessed it!) the more technical aspects of your site, like site mapping, architecture, tagging, and more. Here are a few considerations to keep in mind as you implement your technical SEO strategy:

Site mapping involves planning the structure of all your website’s pages that you want search engines to index and rank. It’s like giving search engines a clear roadmap to navigate through your pages and understand all of your content. This includes not only product pages but also category pages, blog posts, and any other relevant content. A well-structured sitemap ensures that search engines can easily crawl your site to earn high organic rankings. 

Site architecture refers to the overall organization and design of a website. This is different from site mapping: Site architecture refers to the underlying framework of your website, including how pages are interconnected and how your content is organized and presented to users. Thoughtful site architecture enhances user experience by making it easy for visitors to find the information they need quickly and efficiently. Similar to site mapping, it also facilitates search engine crawling and indexing, making it easier for bots to understand the context and relevance of each page based on its placement within the site architecture.

Tagging plays a crucial role in categorizing and organizing content on your website. By using relevant keywords and descriptive tags, businesses can help search engines understand the content of each page and associate it with related searches. Title tags signal the main purpose and overall theme of a page, meta descriptions provide a brief summary of what the user will find on a given page, and header tags help prioritize the details of a page. Tagging improves your website’s discoverability and increases your chances of appearing in relevant search results. Properly tagging pages, images, and products allows search engines to index them accurately and provide more precise and relevant results to users.

Canonical tags are also an important element of ecommerce SEO. These tags help search engines understand and prioritize pages when the content is similar (for example, when you have multiple pages dedicated to different types of washing machines). Canonical tags prevent duplicate content issues and ensure that the desired page receives proper credit and ranking authority from search engines.

Robots.txt files tell search engines where they can and cannot go on a website. Because e-commerce websites are large and URLs can include parameters, search engines may inadvertently devote precious resources getting to pages that won’t perform well. A robots.txt file ensures search engines get to the right content quickly.

Schema Markups allow ecommerce websites to provide further context around specific pages and content through specialized coding. For example, ecommerce websites have additional schema markup that can be added to product detail pages that provide valuable insight into a product, including its name, price, and ratings and reviews.

5. Ensure fast load times and site speed 

Web pages that take between 1–2 seconds to load have the best ecommerce conversion rates. Site speed is good for business and it’s good for SEO. Search engine algorithms are known to heavily emphasize site speed, making it a critical ranking factor. 

Many factors play into pages load times, but there are a few key measures you can implement to improve site speed. 

• Optimize image sizes. Large, uncompressed images can significantly slow down page load times. Compressing images without compromising their visual quality can make a substantial difference. Additionally, implementing “lazy loading” for images can further improve perceived page speed by only loading images as users scroll down the page.
• Leverage browser caching. By storing frequently accessed resources (such as images, CSS, and JavaScript files) in a browser’s cache, page loads can be significantly accelerated. According to Romero, this is crucial: “Several ecommerce sites I’ve worked with are plagued by heavy CSS and JavaScript files, which slow down the rendering process and site experience. A way around this is to understand what resources are critical in presenting an optimal user experience and either consolidating, removing, or deferring unnecessary CSS or JS code.”
• Avoid redirects. Redirects add an additional step to the page loading process and they can increase page load times. Consider consolidating multiple redirects into a single one, or eliminating unnecessary redirects to help enhance page speed.
• Choose a reliable hosting provider. Much of your uptime and site speed depends on your hosting provider — the company that owns and operates the servers, data centers, and other infrastructure that make it possible to host your site online. Choosing a trusted, reliable hosting provider is vital when it comes to site speed, user experience, and ecommerce SEO.

How to use AI to maximize your ecommerce SEO efforts

Commerce and marketing teams are already leveraging AI-driven tools to enhance their SEO strategies, optimize website performance, and gain actionable insights. One of the key benefits of AI in SEO is its ability to analyze vast amounts of data and quickly identify patterns and trends. For example, an AI-driven platform can uncover behavioral and purchasing trends of customers who arrive at your site after clicking an organic result for specific keywords. 

AI tools can assess website traffic, user behavior, and keyword performance to provide valuable insights for improving SEO strategies and driving organic growth. AI can also significantly speed up content creation, from image generation to long-form written content (like blogs) to product descriptions. According to Romero, “AI can help ecommerce brands build out supplemental content in locations like the product landing page. This content can be programmatically built with keyword targets to help users understand product offerings and make a decision about where to transact.” This helps streamline your SEO efforts, reduce tedious tasks, and maximize the impact of their SEO strategies.

Ready to tackle ecommerce SEO? Start here

Remember, ecommerce SEO is a journey, not a destination. By staying consistent and implementing these best practices, you’ll put your business in a position to grow awareness, rank better, and sell more. 

Search engine algorithms change often — which means it’s crucial to stay on top of new updates and make sure your site reflects any important new standards for search. The best place to start? Invest in a connected ecommerce platform that allows you to make changes to your storefront easily and quickly.    

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Lauren Wallace is an editorial lead for Commerce Cloud. She’s written for B2C and B2B companies in many different industries — most recently cybersecurity and healthcare. When she’s not writing about commerce, you can typically find her outside running or biking around San Diego.

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