Lack of good market research is the #1 reason businesses fail. Looks like you need some low cost market research tips!
To help you conduct effective market research on a budget to grow your startup, we asked this question to successful startup founders and entrepreneurs for their best insights. From tapping close contacts for preliminary research to conducting detailed research about your competition, there are many tips to help new entrepreneurs conduct meaningful market research that is inexpensive but effective in growing their business.
TL:DR Here are 12 low cost market research tips for startups:
- Tap your close contacts for preliminary research
- Discuss and ask questions on social media
- Receive face-to-face information from customers and potential customers
- run product hunt
- Build trusted partners and advisors from among your advisors and early clients
- Take simple and concise online surveys
- Receive useful information via phone call
- focus on primary research
- Use accurate government and other sources of data
- do keyword research
- Combine qualitative and quantitative research
- Do detailed research about your competition
Tap your close contacts for preliminary research
Interview the people you believe are your target audience. Ask them what they want in a product or service. If you have a group that can assist you with market research on an individual level, you can gain valuable insight into the market for your product or service. You want to do this before you are too far down the road of designing and planning for your business. Use this information quickly to help guide what you build, and you’re sure you have a customer base.
Ann McFerran, glamatic
Discuss and ask questions on social media
Social media is one of the best platforms to reach your target audience for market research. It’s free, and that’s where most people spend their time. As a new entrepreneur, you can take advantage of this channel to do your research.
An example is joining Facebook groups that are relevant to your niche or communities where you can find your people. Make your presence there, engage in conversation and ask questions. You can also create survey posts that easily collect people’s feelings, so you can understand what their pain points are. The key to growing your business is knowing what your target customers really need, not what you think they need. That’s why it’s important to know your people.
Marina Wamonde, housecashine
Receive face-to-face information from customers and potential customers
Whatever research we all take for granted in our industries is inherently flawed because there’s so much data that won’t really apply to us. In addition, any data we find is generally accessible to everyone else (and yes this includes purchased research reports). Convincing a customer as well as a potential customer who turned you down for taking them 20-30 minutes to dig deeper into their experiences with and without your product. This is the most relevant data you will find and the beauty is that that experience is yours and yours alone. No one else has that data and that conversation is with no one but you. Market data based on a large group alone cannot provide context.
Benjamin Botner, Stable Establishment, Inc.
run product hunt
Launching product discovery is the best market research technique for new entrepreneurs. It can act as an essential outpost for many businesses. There are many startups launching every week. With such a platform, you can get your message across to a new audience. Product Hunt is the ideal solution if you want to globalize your business. In simple words, it is your “golden ticket” to success. You can get the attention of many journalists by following this method. It also improves your chances of responding and taking advantage of new opportunities.
Christina Casson, Texas Family Homebuyers
Build trusted partners and advisors from among your advisors and early clients
I do research that informs marketing. As a longtime researcher on technology adoption, over the years, I’ve had my “kitchen cabinet” of advisors. I take care of them. I check my research hypothesis with them. I check my survey questions with them. I check my initial findings with him. All this is also a gift to them – that you share your evolving insights. Build your trusted thinking partner/consultant from among your initial customers, your mentors, and prospects who have turned you down. Doesn’t cost much – maybe a beer or a cup of tea at a conference, the occasional “happy birthday” or other personal reach. Plus, for me, at least, I’ve made some great friends in my years of research. Marketing should also work as long as you truly nurture and give back and not just take.
Lexi Martin, vizier
Take simple and concise online surveys
Sending out an online survey to your target market and paying customers is a simple, low-cost way to conduct market research. Consider what data you want to know about your target market and pay customers to effectively formulate questions. Design separate surveys for your customers and potential customers. Make the survey short, up to 15 questions. Most of the questions should be multiple choice or y/n questions with only one or two open ended. If the survey is too long and complicated, the chances are high that the respondent will not complete it.
Using a form or survey app like Google Forms will automatically collect and tabulate your answers to interpret the data, saving you time. You will be surprised to see all the valuable data and insights you can get from a simple yet well designed survey.
Ruth Knowles, Fortis Medical Billing Professionals
Receive useful information via phone call
In my experience, the most powerful and cost-effective market research technique is the old-fashioned phone call. You can reach a large number of potential customers quickly, and you can get a lot of useful information in a short amount of time. Plus, phone surveys are relatively inexpensive to set up and manage. Of course, you have to make sure that your survey questions are well-crafted and that your interviewers are trained to conduct effective interviews. But if you take the time to do it properly, phone surveys can be an invaluable tool for gathering marketing intelligence.
Mark J Schuman, schumann legal
focus on primary research
Because I had to go through countless sources, most of which are quite similar and each holds only a small piece of the puzzle, I found that “market research” is one of those topics that can be intimidating when doing research. One of the first tasks you face as an entrepreneur is to create a business strategy, the essential components of which are often found by doing a thorough market analysis.
Focus on primary research by asking questions like Who are my customers and how can I contact them? What products or services do customers need or want? What impacts the customer’s purchasing behavior?, and what prices should I set for my products and services? Quantitative and qualitative research should then be done.
Finally, take a look at focus groups, which can be effective brainstorming tools for learning about product ideas, consumer preferences, and buying behavior among specific communities.
Chris Herdagan, On Demand Painters Midwest
Use accurate government and other sources of data
Data never lies, so when analyzing growth patterns, historical data, and future trends in the field you work in, make sure you have accurate information on which to base any future ideas. . The Office for National Statistics in the UK or US Data and Statistics is a great place to start because the data is prepared at a very high level. Hence, your decision is based on sound ground.
Alex Nichols, Exile Gear Ltd.
do keyword research
Doing keyword research is a great way to determine whether the industry you want to jump into is growing or dying. You can also get a feel for how competitive it is online. For any new business I’m looking for, I like to delve deeper into Google Trends and see where the trends are going for a group of related keywords. I also like to use tools like Ahrefs to see what the ranking difficulty is for those keywords. If the difficulty is high, the industry is likely to be over-saturated and you will have to work harder to stand out. That being said, I would prefer to go into a saturated industry that is growing than an unsaturated industry that is dying.
cody arsenault, cody arsenault
Combine qualitative and quantitative research
If you want to design and execute an effective research plan, you need both qualitative and quantitative research. Many businesses fail either because they do not conduct any research or because they do not take advantage of quantitative research.
When you start with qualitative research, for example, through in-depth interviews and focus groups, you understand exactly what kind of data you need to collect and what you want to measure. Not to mention, you reach an understanding of a problem or topic that is much deeper than what can be achieved through quantitative research alone.
Once you have enough qualitative information, through quantitative research you will get the data you really need to understand your potential customers or clients, and you will spend time collecting and analyzing those data. Won’t waste what you don’t need.
Sira Masetti, money property
Do detailed research about your competition
Most of the new entrepreneurs think that this step is not important, but after a few years in business, you will understand that you were underestimating your competitor which is why your business is not as good as it should have been. Researching your competition can give you an idea of how they are attracting customers as well as what are the things they are not doing but you can make your brand better than theirs. You can compare their online presence with traditional media promotions to see how active they are on social media.
Mark Blakey, autism parenting magazine