How to Conduct Market Research: A Step-By-Step Guide

Figuring out how to do market research for the first time can be intimidating and confusing. There are so many categories and different methods to choose from, and what seems like an endless list of organizational tasks and preparations.

However cumbersome as it might seem, research has an irreplaceable value for every company, be it a startup or a big corporation. It’s an instrument that should be used regularly to keep yourself informed and up-to-date with market changes and make smart choices.

Studying your customers closely provides meaningful insights into who they are as people, what makes them tick, what are their pain points, and how they behave as consumers.

Furthermore, the data you gather gives you a glimpse of the processes that control the marketplace. This knowledge empowers with a tactical advantage over situations that would otherwise appear random or meaningless.

In a nutshell, doing your homework gives you the tools to make informed data-driven business decisions, improve your products, give your customers what they need, and outperform the competition. Not bad, right?

If you approach your investigation systematically and with discipline, it won’t be long before you reap the results and improve your company’s success rate considerably.

Before you read this guide and start your efforts, we advise you to brush up on the basics first and go through our other articles on market research:

• Market Research 101: From Beginner to Advanced
• Conducting Market Research: 6 Methods to Explore
• 15 Essential Market Research Tips for Businesses

Digging deeper into the process will give you the necessary background and confidence to go forth without any concerns.

So, without further ado, let’s roll our sleeves and get started on how to conduct market research. Read on and take notes!

1. Define the Research Goal

The first step of the process is defining your goal. It is important to start with a clear idea of why you are doing the research and what you want to accomplish. If your motivation is vague, you risk straying from your objectives and becoming distracted by irrelevant information.

During your study, you can identify other important topics that will need your attention but are too loosely related to the problem at hand. You should, of course, note them and write them down, but it’s advisable to set them aside for further investigation in different research.

Mixing questions regarding too many problems in one survey can be confusing for the people and might influence the accuracy of their answers. It can also make the results of the research too inconsistent. And it’s difficult to draw conclusions based on a bunch of random facts.

By listing the reasons why you are doing the research and the problems you want to solve, you can set a clear goal that can be referenced at every stage of the research by everyone involved.

This way, you’ll focus your efforts and, in the end, will be able to make informed data-backed decisions.

For example, if you are choosing the pricing model for a new SaaS product, you should perform market research to make sure you’ll pick out the best one for your business. In this case, it should be something like “Find out the best pricing strategy for the product”. Some of the objectives can be:

• Identify the target audience.
• Find out what products they are currently using.
• Learn how much they are paying for them.
• Understand how much they are willing to pay.
• Research how they are using similar products.
• Discover what features they’d pay more for.
• Compare your product to the competition, etc.

Ultimately, your goal should be what you want to see accomplished in the future. That’s why it’s best to focus on your plans and targets, rather than on your current problems. Otherwise, you risk being stuck with unsolvable issues rather than with creative solutions.

2. Create Client Personas

When doing market research, you need a group of people who’ll answer your question and whose opinions are important to your business. To identify these people, you should first create profiles that fit your target audience.

Client personas, or buyer personas, are collective profiles representing your ideal customers’ common qualities. They can be based on your top buyers in an attempt to attract more people like them to your business, or if you are just starting, they can be the product of separate market research.

Every business should have market personas. If you have already created yours – way to go, you are one step ahead! If you have not yet done it, now is a good time.

When building the buyer persona’s profile, you should include the following basic information, and add other specific factors, if there are any:

• Demographic – Age, gender, location, etc.
• Personal Information – Family status, income, interests, etc.
• Work-related details – Company, position, decision-making level, etc.
• Pain Points – Work and personal life struggles, barriers to achieving goals, etc.

For further reference on how to build buyer persona profiles, you can read DevriX’s article:

An Advanced Guide to Creating and Using Buyer Personas to Convert Leads

3. Identify the Sample

A market research sample is a representative group of people who match your client persona profiles. Depending on the scope of the study, you might include in it people who fit one or multiple personas.

Ideally, if you want the results to be representative, you should focus on a single profile. However, if you feel that you will get more information from different types of customers, you can define separate samples for every participating persona and compare the results at the end.

Defining and identifying a representative sample is the foundation of accumulating accurate results. If your participants don’t match the profile you need, their answers will not be relevant to your goals.

Participants for samples can be identified in:

• Your customer database. Clients should be divided into groups matching your buyer persona profiles. If you haven’t already implemented the segmentation, doing it will help you sift through who to invite to participate in the research.
• Competitors’ clients. People who use products similar to yours and fit the profile, but are not currently your customers, are a great addition to your research. By learning about their opinions and preferences, you can attract them as clients in the future.
• Your lead database. Every lead you have in your email list or CRM tool can be a potential candidate for the survey sample. As with existing customers, leads should be segmented not only for the research but also for better marketing.
• Social media profiles. Your network of followers on different social media platforms can be a valuable resource in every survey. By announcing the desired profiles participants should fit and encouraging people to share with acquaintances, you can reach many more potential participants.

It’s very important that your sample is large enough and also representative of the population you are targeting. There will always be people who will decline your invitation to participate. Choosing a too small or ill-targeted group of people can make the results of the research biased.

Although there is not a universal minimal number of people to include in your study, it is generally accepted amongst scientists that less than 100 people is insufficient to make up a statistically relevant conclusion. Therefore, to ensure you’ll reach this number, you’ll have to distribute your questions to at least 150 people.

However, if you want to research only your existing customers and they are less than 100 in total, you can still carry out your study but you’ll have to accept a larger error margin.

4. Perform Your Chosen Research Methods

Once your sample is clear, you can move forward to conducting market research. There are different methods you can explore, depending on your goals, but we will be using a strategy combining a few of them for this article. This is usually the safest way to guarantee that your results will be comprehensible and on-point.

Prep Your Questions

The goals and objectives you set in the initial stages of your research, should be organized and formulated into questions you can ask your participants.

Although the phrasing and scope of these will probably change and be refined throughout the different stages of the research, you should consider testing them at the beginning on a small sample. This will allow you to eliminate rookie mistakes and save you some trouble further on in the research.

Do Secondary Research

Before you start studying your audience, you should consider doing secondary research to build a general idea of the market.

You can find paid and free data available in government databases, private research companies, educational institutions, and public libraries.

There is a chance that the information you go through has nothing to do with the goals of your particular research. But it can still help you identify market patterns at scale and configure your following moves.

Try Various Exploratory Methods

The next step is to dive into your specific target audience and see how things are. This can be done via different exploratory research methods.

1. Observation. At this stage, consider starting with observation. This will give you an idea of how your customers act in real-life situations in their natural environment.

2. Focus Group Meetings. You can continue by consolidating your initial impressions in focus group meetings. The moderator can ask the participants about the subjects that got their attention and the discussion that follows can give you additional insights.

3. Personal Interviews. Interviewing individual representatives of your sample will allow you to ask even more follow-up questions and have a chance to learn about your customers’ preferences, goals, and pain points.

Distribute Customer Surveys

You can leverage all the information you’ve gathered in the previous steps to design customer surveys. They will help you acquire the answers to your questions at scale and prove or disprove the hypothesis built in the exploratory stage.

The questions in the surveys should be as simple and easy to understand as possible. Avoid answers that lead the customer in the direction you’d like. This might influence their responses and compromise the results.

5. Analyze the Data and Organize It Into a Report

The data you obtain should be analyzed and organized at the end of every stage of your market research. These preliminary reports will serve you in the process of the study and will make building the final report easier.

Results from the research will be both qualitative and quantitative and should be properly visualized to make sense to everyone to whom they would be presented.

Cold statistics can be overwhelming, but presenting the data in an engaging format can make it more appealing and clear to understand.

Some forms of reporting are customer journey maps and affinity diagrams. Even users who are not technically advanced can take advantage of modern data visualization tools and make research data interesting to the audience of their presentation.

Bottom Line

Conducting market research is complicated. It takes a lot of preparation, and can seem intimidating at first. But once you become familiar with the basics, you will be able to do it yourself and reap its success.

By using this guide, you can study different aspects of your target market, and get to know your audience on a different level. Leveraging the data and insights you gather will give you a strategic advantage and empower you to make more informed data-based decisions for your business.