Starting a new business is frightening, confusing, and thrilling for an entrepreneur. Startups have increased, especially in the online services space. However, they require a holistic understanding of market trends and organizational dynamics, and market research techniques can help them acquire business insights. This post will explain how to do market research for a startup.
What Is Market Research in Startup Ecosystems?
Market research means collecting, formatting, analyzing, and contextualizing a business’s customer data and performance attributes for strategy development. Startups prefer market research consulting to streamline their operations.
The scope of market research solutions relies on the scale of the client businesses or startups. Therefore, business strategy consulting firms implement a value-based pricing approach to help several company categories in their market research.
However, startups benefit from an outsourcing model of market research services due to a lack of the resources needed to train and maintain in-house market researchers.
What Is a Startup?
A startup is a business in its initial stages that might evolve into a larger enterprise across its lifecycle. Founders are the entrepreneurs who either fund the startup through their money or external parties in its early stages.
Although startups have a remarkable failure rate, successful startups often grow exponentially. After all, startups can take bold business ideas and make them work without an established global organization’s bureaucratic or operational complexities. They require outcome-oriented business strategy consulting partners to succeed.
How to Conduct Effective Market Research for a Startup
|1| Define the Objective of Market Research
What primary question (business query) do you want to answer using marker research solutions? The startup must have clarity of objective when consulting the market research firms. If your team’s question lacks a detailed definition, your research partners will fail to determine the most appropriate tools and types of market research.
Additionally, a startup must focus on a hypothesis that uses the primary question and provides a scenario to investigate.
Example – How to Select Market Research Respondents
Consider this business query: Who are the ideal clients for the proposed business model?
Therefore, the startup can form a hypothesis with proper specifications. It can be a list of potential customer characteristics while you assume reasonable sales per customer.
An engineering firm can leverage business strategy consulting to develop the contract screening criteria. The legal services company can focus on a specific sector. Similarly, a wealth management business can build ideal client profiles based on the targeted net worth range.
Deciding the scope ensures you can conduct market research for a startup while using your resources efficiently. You can start outlining the requirements and tools of startup market research after identifying the hypotheses to test.
|2| Select the Type of Research Necessary for Verifying Hypothesis
Startups can collect publicly available data to check whether they will succeed financially by serving a client segment. They can also assess their business model by sharing a prototype product or soft launching their services to a small group of people.
Alternatively, you can build your proprietary data repository using some market research tools for startups. Finally, you must know what market research types might be best for you, and we’ve discussed them below.
Types of Market Research Solutions for Startups
The methods of market research vary across the following factors.
- Dataset source, its structure, and collection methodology,
- Ease of quantification and program calculations,
- Ownership of market research datasets,
- Business aspect (external/internal),
- Reliability of aggregated data.
Consider the following types of market research that help startups plan their business lifecycle, corporate growth strategies, value system, and target consumer segments. However, the final service packages can vary due to the difference between business strategy consulting firms.
|1| Primary Market Research
If you interview or survey your employees, customers, investors, suppliers, contractors, industry experts, and rival business spokespersons, you own the data which forms the primary market research.
It is your branded dataset, and other firms will refer to your work, studies, or visualizations in their secondary research reports. Corporations that want to become thought leaders or trusted brands in their operating industry conduct primary market research.
The most significant benefit of primary research into market dynamics is how your competitors must borrow and cite your work in their authority literature. Therefore, it acts as a tool for building mutual respect while pushing the research and development (R&D) efforts forward.
|2| Secondary Market Research Consulting
The internet and the press allow all public or private enterprise stakeholders to learn about everything that happens in an industry or geography without delays. Besides, consumers love sharing data hinting at their eCommerce wish lists, travel destinations, and purchasing habits on social media.
Secondary market research solutions leverage publicly accessible and externally supplied datasets to help your startup find industry trends.
Consider social listening or social media analytics. While follower counts are less valuable than organic user engagement, both help you estimate your online presence. After all, a startup requires public recognition to attract the most relevant stakeholders. i.e., customers and contributors.
Additionally, you learn about competitor strategies from review sites, eCommerce product statistics, and news resources. Startups can also track several research papers that help with product development and consumer psychology.
|3| Quantitative Market Research Solutions
Sales numbers, inventory refilling rates, quality management audits, and financial fundamentals of an organization generate numerical data types. Therefore, market research consulting firms consider the related investigations as quantitative.
Mathematical market research tools for startups and other business entities describe real-life events using statistical models. Moreover, sharing this data via graphical visualization is easy.
Several strategic leaders prefer numerical data to ensure maximum objectivity in performance documentation. Also, investors, suppliers, and consultants can reformat/process the numerical data using Excel or coding.
Some results of quantitative market research can help you design impactful marketing materials. E.g., you can create price vs. value charts showing how you provide the most customer-friendly offers by referring to the competitor’s historical data.
|4| Qualitative Market Surveys
Numbers require processing and statistically reliable modelling, which depend on the market research solutions that a startup can use with simple math. However, customer opinions and employee feedback are essential for faster business modifications.
Surveys and polls allow your clients to specify what they think about their needs and wants. Startups can use this descriptive or qualitative data to accelerate their decision-making.
Qualitative market research consulting handles texts or paragraphs. Therefore, simple calculations or traditional programming methods cannot process the related datasets. The data is unstructured, and natural language processing (NLP) technologies are necessary to process it.
Still, every startup must acquire qualitative data by consulting market research partners. Ultimately, user feedback often reveals new product feature ideas and potential causes of a high customer churn rate. i.e., more clients will quit your services because of the pain points in the few exit interviews submitted by other customers.
Market Research Tools for Startups
|1| Think with Google
It is a knowledge base created by none other than the search giant Google, which entails consumer trends and industry dynamics. Therefore, startups can prepare products and services that are more likely to generate more revenue. Business strategy consulting units leverage this learning and trend discovery resource to enhance their marketing advise.
When you want professional surveys with integrated support for analytics formatting, SurveyMonkey can help you. It works well when entrepreneurs want to conduct market research for a startup entity.
|3| Ask Your Target Market (AYTM)
AYTM’s sizeable online community proactively responds to branded market research surveys. Moreover, a startup can send survey forms to a natively developed community email list. So, you can use this facility in market research tools for your startups without worrying about how you build your email list.
Keywords affect the performance of the content marketing and paid promotions of the startups. SEMrush allows startups to optimize their content and ads to increase the probability of ranking on the search engine results page (SERP).
Precautions in Market Research Consulting
Primary market research solutions take time, effort, work hours, and systems thinking. It is like planting a mango tree; it takes time for your publications to receive corporate recognition, and this initiative is more challenging, especially if you run a startup.
Your brand is responsible for any error or a critical response regarding how your team collects, normalizes, and interprets the data in primary research.
So, your team must go back and address any objections made by the critics. Sometimes, academic scholars can publish counter-research to refute the conclusions of your studies. Therefore, startups require knowledgeable market research consulting partners to maintain quality standards in primary research.
Secondary research can hurt your strategic orientation if the external data sources are not authoritative. Additionally, you acquire more irrelevant data in secondary market research datasets. So, startups must spend more resources on data cleansing and formatting.
We hope you now know how to conduct market research for a startup using the different tools or types of market research solutions available today. Startups want business growth because they intend to acquire market-related trends and insights.
Surveys, feedback, reviews, and interviews enable startups to understand the voice of customers and optimize their services to serve their stakeholders. Also, the business performance data of a startup must leverage both quantitative and qualitative datasets.
However, you must not trust every data source because some sources are less authoritative than others. Therefore, startups require reliable statistical methods to assess business data’s validity, relevance, and impact.
A leader in market research consulting, SG Analytics empowers startups to acquire and analyze market dynamics using high-quality primary and secondary datasets. Contact us today if your startup requires scalable and actionable insights concerning consumers and competitors.