"Start with the end in mind." The late Stephen Covey was not necessarily referring to business when he wrote this thought in his popular book, 7 Habits of Highly Effective People. But, the sentiment still rings true, particularly when talking about launching a start-up. Developing good habits and outlining smart steps are crucial to achieving entrepreneurial success, and beginning your endeavor with solid market research habits will much better equip you to reach your end goals. So, we've briefly outlined seven market research habits to help you launch your start-up effectively and successfully.
1. Ask the right questions before conducting market research.
As a general rule, no matter what industry you are entering, there are some important questions you must ask before you begin conducting your market research. Asking questions that help you understand your biggest pain points, challenges, goals and opportunities will help you gain the most benefit from your research. If you start the market research process without the proper preparation, you'll potentially end up with sub par results and an ineffective road map for launching your company.
2. Set a realistic market research budget.
Cost is key, particularly for start-ups. In the beginning stages, you can't afford to set an inappropriate market research budget (both figuratively and literally!). In order to set the most effective budget, note the following factors:
- Consider your overall project budget to determine the best market research allocation:
- If your overall project budget is $250,000, do not expect to get the answers you need out of a single $5,000 report; on the other hand, you don't necessarily need to fork our $100K either.
- Research what information is available before making any final decisions:
- Syndicated research will be able to save you both time and money, as published information is often up to 1/10th the cost of a custom project.
- Syndicated research will be able to save you both time and money, as published information is often up to 1/10th the cost of a custom project.
- If you must invest in custom research, prepare your budget accordingly:
- Custom projects can cost an average of $30,000-$50,000 and require at least a two-month time line from the initial project layout.
- Understand what costs to expect and what information it gets you:
- Determine whether a top-level, full-market, or product detail market report suites your research needs and budget most effectively.
3. Consider your business from all angles.
If you want to cover all your bases, you need to analyze your business from multiple perspectives and conduct your market research accordingly. This will help you obtain your research objectives and discover any gaps in the process. According to Aaron Keller, marketing professor at the University of St. Thomas and managing principal of a brand development firm, in an interview with Entrepreneur.com, you must consider the following four perspectives:
1. Your Company: Analyze your core mission, product and service offerings and the benefits you provide your customers.
2. Your Customers: Analyze your target buyers, those that influence the buyers' decisions and the end-users.
3. Your Competitors: Analyze your competitors and the level to which you will be facing off against them in order to adjust your messaging accordingly.
4. Your Collaborators: Analyze what outside organizations may have an invested interest in the success of your company.
4. Understand your market, understand your competition.
In addition to researching your market, you truly need to hone in on your competition. Competitive intelligence can be the driving factor in your marketing strategy. By understanding your competition's strengths and weaknesses, you can better understand where your business fits within the market. Also, analyzing your competition's mistakes, failures, successes, and general company direction, can help you gain not only a better insight, but also a competitive advantage that will serve you well in your preliminary days.
5. Once you know your competition, market why you are better.
Now that you understand all the ins and outs of your competitors, you must tailor your marketing and messaging to your areas of strength. Is your product or service unique to the market? Or, if it's comparable to your competition, are you more cost effective? These are the kinds of questions you must research to determine your niche.
6. Use market research to determine your advertising channels.
You've used your market research to define your target audience; you've even further analyzed your audience to segment who your buyers, influencers and actual end-users are. Now, you need to use research to determine which marketing channel will most effectively reach your audience. By analyzing the most-used and preferred advertising avenues for your specific target, you will achieve much better results than simply choosing traditional or popular methods.
7. Avoid common market research mistakes.
Market research methods can vary from industry to industry, but there are still many common mistakes that can affect anyone entering a new market. So, before you begin and throughout the process, it's important to pay attention to these all-too familiar faux pas:
- Don't overemphasize quality over quantity.
- Don't neglect the competition.
- Don't remain oblivious to market research options.
- Don't get too close to the research.
- Don't inadequately analyze market research firms.
Want more information on using market research to become a truly effective start-up? Download our free white paper How To Use Market Research to Launch Your Business.
Thanks for reading!
Ashlan Bonnell
Managing Editor,
MarketResearch.com
