Lack of good market research is the #1 reason businesses fail. Sounds 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 successful startup founders and entrepreneurs this question for their best insights. From taping close contacts for preliminary research to doing detailed research about your competition, there are several tips to help new entrepreneurs carry out meaningful market research that is inexpensive yet effective in growing their business.
TL:DR Here are 12 low-cost market research tips for startups:
- Tap Your Close Contacts for Preliminary Research
- Hold Discussions and Pose Questions on Social Media
- Get One-on-One Insights from Customers and Potential Customers
- Run Product Hunts
- Create Trusted Partners and Advisors From Among Your Mentors and Early Customers
- Conduct Simple and Concise Online Surveys
- Get Useful Information Through Phone Calls
- Focus on Primary Research
- Utilize 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 people who you believe are your target audience. Ask them about what they want in a product or service. If you have a group, you can reach out to who can help you with market research on a personal 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 early on to help guide what you create, and you are sure to have a customer base.
Ann McFerran, Glamnetic
Hold Discussions and Pose Questions on Social Media
Social media is one of the best platforms to reach your target audience for market research. It’s free, and it’s where most people spend their time. As a new entrepreneur, you can leverage this channel to do your research.
One example is joining Facebook groups that are relevant to your niche or communities where you can find your people. Build your presence there, engage in conversations, and pose questions. You can even create survey posts that easily gather people’s sentiments, so you’ll 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. So it’s crucial to know your people.
Marina Vaamonde, HouseCashin
Get One-on-One Insights from Customers and Potential Customers
Too much of what we all consider to be research in our industries is inherently flawed as it contains way too much data that wouldn’t actually apply to us. Beyond that, whatever statistics we do find can and is generally accessible to everyone else as well (and yes that includes purchased research reports). Convincing a customer as well as a potential customer that turned you down to give you 20-30 minutes of their time to really dig deeper into their experiences with and without your product is gold. It’s the most relevant data you will get and the beauty is, that experience is yours and yours alone. Nobody else has that data and had that conversation but you. Market data based on a large group simply can’t offer context.
Benjamin Bottner, Steady Install, Inc.
Run Product Hunts
A launch of a product hunt is the best market research technique for new entrepreneurs. It can act as an essential checkpoint for many businesses. There are multiple startups launching every week. Such platforms allow you to deliver your message to newer audiences. Product Hunt is the ideal solution if you want to globalize your business. In simple words, it’s your “golden ticket” to success. You can devote attention to numerous journalists following this method. It also improves your chances of feedback and avails new opportunities.
Cristina Cason, Texas Family Homebuyers
Create Trusted Partners and Advisors From Among Your Mentors and Early Customers
I do the research that informs marketing. As a long-time researcher on technology adoption, for years, I’ve had what I call my “kitchen cabinet” of advisors. I nurture them. I check out my research hypotheses with them. I check out my survey questions with them. I check out my initial findings with them. All of that is also a gift to them – that you share your evolving insights. Create your trusted thinking partners/advisors from among your early customers, from your mentors, and prospects who have turned you down. Doesn’t cost much – perhaps a beer or a cup of tea at a conference, an occasional “happy birthday” or other personal reach out. Plus, for me, at least, I’ve made some great friends over my years in research. Should work for marketing too as long as you truly nurture and give back and don’t just take.
Lexy Martin, Visier
Conduct Simple and Concise Online Surveys
Sending 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 formulate the questions effectively. Design separate surveys for your clients and potential customers. Make the survey short, 15 questions max. Most questions should be multiple choice or Y/N questions, with just one or two being open-ended. If the survey is too long and complicated, the probability is high that the respondent won’t complete it.
Using a form or survey app like Google Forms will automatically collate and tabulate the answers for you to interpret the data, saving you time. You’ll be surprised to see all the valuable data and insight you’ll gain from a simple but well-designed survey.
Ruth Novales, Fortis Medical Billing Professionals
Get Useful Information Through Phone Calls
In my experience, the most powerful and cost-effective market research technique is good old fashioned phone calls. 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, it’s relatively inexpensive to set up and manage a phone survey. Of course, you’ll need 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 right, phone surveys can be an invaluable tool for gathering marketing intelligence.
Marc J. Shuman, Shuman Legal
Focus on Primary Research
Because I had to sift through countless sources, the majority of which are quite similar and each holding only a small piece of the puzzle, I discovered that “market research” is one of those topics that can be intimidating while researching it. One of the first tasks you will face as an entrepreneur is creating a business strategy, the essential components of which are often found by carrying out a thorough market analysis.
Focus on primary research by posing questions such as Who are my consumers and how can I contact them? Which products or services do customers need or want? What influences customer purchasing behavior?, and What prices should I set for my products and services? Quantitative and qualitative research should then be conducted.
Finally, take a look at focus groups, which may be effective brainstorming tools for learning about product ideas, consumer preferences, and buying behavior among specific communities.
Chris Heerdegen, OnDemand Painters Midwest
Utilize Accurate Government and Other Sources of Data
The data never lies, so when analyzing growth patterns, historical data and forecasting future trends in the niche you operate in, make sure that you have accurate information on which to base any future ideas. The Office for National Statistics in the UK or the US Data & Statistics is a great place to start as the data is produced to a very high level. Therefore, your decision-making is based on solid ground.
Alex Nicholas, Exile Gear Ltd
Do Keyword Research
Doing keyword research is a great way to determine if 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 look at getting into, I like to dive deep into Google trends and see where the trend for a group of related keywords is heading. I also like to use a tool like Ahrefs to see what the difficulty of ranking for those keywords is. If the difficulty is high, then the industry is likely more saturated and you’ll have to work harder at standing out. That being said, I would rather go into a saturated industry that’s growing than an unsaturated industry that’s 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 don’t do any research at all or because they don’t leverage quantitative research.
When you start with qualitative research, for instance, 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 you could obtain through quantitative research alone.
Once you have enough qualitative information, through quantitative research you will obtain the data you actually need to understand your potential clients or customers, and you won’t waste time collecting and analyzing data you don’t need.
Sira Masetti, Wealthendipity
Do Detailed Research About Your Competition
Most new entrepreneurs think that this step is not important but after a couple of years in the business, you’ll understand that you were underestimating your opponent because of which your business is not as good as it was supposed to be. Researching about your competition can give you an idea of how they’re attracting clients as well as what are the things that they aren’t doing but you can to make your brand better than theirs. You can compare the traditional media promotions as well as their online presence like how active they are on social media.
Mark Blakey, Autism Parenting Magazine