During my career as a UX Designer, I have collaborated with many talented people, from entrepreneurs to marketers, to developers, and beyond.
However, it still surprises me when I see people jumping into projects without knowing exactly who, why, or what they are building!
When you land on an idea, the excitement of getting it to market can be overwhelming and can cloud your judgement.
I have been guilty of this myself in the past.
However, if you are reading this article and want to understand your customers and the competitors at a deeper level, you are one step closer to making more informed decisions that have a better chance of succeeding.
The insights I have collected using simple and inexpensive research techniques have not only helped me deliver successful projects but have saved time and money.
“You never really understand a person until you consider things from their point of view.”
― Harper Lee
Without research, you are opening yourself up to unnecessary risk. Therefore, you owe it to yourself and your business to give your idea the best chance of success.
Here are a few points to keep in mind when approaching your market research plan:
Know your customer
Google and Amazon are giants for a reason; they understand their customers so well that most of their customers could not do without them. So how do they achieve this? Well, a huge part of their success comes down to research.
You don’t need a multi-million dollar budget to get great feedback. In fact, the reality is that most entrepreneurs and startups get feedback on very tight budgets.
I personally have collected invaluable feedback for many projects on a shoe-string budget, and I discuss this in more detail below.
The fact is, there are lots of quick and effective research methods you can experiment with, and all of them are slightly different from each other.
However, all of them share a common goal; to collect insights that help you make more informed decisions and deliver more value to your customers.
Know your competitors
It is also essential to understand your customers at a deep level and there are many methods to achieve this, whether it be free or paid.
A common strategy for many entrepreneurs starting out is to simply find ways to improve on what their competitors are doing.
However, this approach can also be risky, as you may be inheriting strategies that may not be working for that competitor behind the scenes.
In order to get a more holistic view of your competitors, you will need to know them inside out.
Also knowing who your direct and indirect competitors are, will help you differentiate your offering in a more strategic fashion.
In business language, this is achieved by doing a competitive analysis.
In the next section, I will highlight some of the free methods I use to analyze my competitors.
1. Competitive analysis
Who is paying for ads vs ranking organically?
One of the free and easiest ways to analyze your competition is by simply researching your competitors on Google.
Firstly, I always like to know who is spending money on Google Ads versus who is investing in SEO and ranking organically.
Websites that rank high organically, are usually more established brands that usually have been around for longer.
However, it is also good to know who is spending money on Google ads.
This will tell you who you’ll need to bid against when buying Google Ads in your market segment.
Obviously every market is different, however, no matter what business idea you intend to explore, getting insights like this will help you in the long run.
Either way, you’ll have to compete for rank on Google in some way, shape, or form.
Capture key insights about your competition
When researching an idea, I personally make a list of my competitors using Google Docs.
I start by reviewing their website and then describe their business model in my own words. Taking note of their pricing model, and the markets they are targeting is also a valuable exercise.
I also keep links to their website, as well as screenshots of any marketing material that explains what they do.
You don’t need to be too detailed at the start, as you can develop it over time.
Use these questions as a guide when documenting insights about your competitors:
- Who are your top 5 competitors?
- What products and services are they selling?
- What is their pricing structure?
- What markets are they targeting?
- What are their strengths & weaknesses?
Free market intelligence
SimilarWeb’s free Chrome extension is another great tool that can help you gain insight into your competition.
Similarweb is a paid market intelligence tool, however, they have a free extension for Chrome which shows helpful website stats like Avg monthly visits, Bounce rate, etc.
As I say, this is perfect if you are exploring your competition on a budget, however, there are great paid tools out there that give you a lot more detailed insights about your competitors.
If you would like to know more about these competitive analysis tools, check out my related article which reviews their features in more detail:
2. Online Surveys
Performing online surveys is a great way to gather insights from potential customers in your market in a short timeframe.
They both offer similar services and allow you to collect feedback by asking direct questions to your target audience. The cost of the survey is usually based on the number of responses you receive.
Keep in mind though, the more you need to target a specific type of audience (e.g age range, job type etc) the more expensive it can get.
For more information on these tools and how to use them, check out my related article How I created a memorable online brand for my business in 5 steps
I have also used Facebook groups to research countless business ideas. Being able to tap into real-time conversations within your potential market is a powerful thing!
Once you find a group that is even loosely related to the idea you are researching, have read through the comments and conversations. Ask some questions, and find out more.
You could even go a step further and create your own group and build an audience that can then be marketed to.
The opportunities are endless!
3. Face-to-Face interviews
Face to face interviews is by far one of the best ways to get feedback and understand your potential market.
Apart from the value of meeting potential customers face-to-face, you will get to uncover your customers’ pain points, and find out exactly what is on their mind.
The scientific term for this type of approach is Qualitative Research, which is essentially the study of human behaviour.
Being face-to-face gives you the advantage of interacting with your audience in real-time. You have the option to ask open-ended questions and probe on the fly, unlike online surveys and remote methods.
Create a prototype
Even in the very early stages of ideation, it is a good idea to create a rough prototype so you can observe your users as they interact with it. This could be in the form of a paper prototype, or if it’s a physical product you could observe them interacting with a tangible prototype.
Offer an incentive
While the cost of a face-to-face interview is going to be more than online surveys, I usually find the results are a lot more valuable.
The reality is that you don’t need a big budget to get great feedback. I have collected great feedback on a shoestring budget, by offering participants a $20-$50 gift card as an incentive for participating.
Small incentives like this go a long way and you’ll find your respondents are a lot more receptive.
Usually the more the participants the better, as you will have a larger pool of data to analyze.
However, this is not always practical as it will increase the cost and time needed to complete.
My rule is to get feedback from a minimum of 5 participants. Any less than that is too little, and you won’t get good insights.
Feedback from friends is nice, but not that useful!
Getting feedback from friends and family is nice, however, in my experience, the feedback you will get will be biased and not very useful.
Instead, it’s best to get feedback from people you don’t know who will give you an honest and unbiased opinion.
Finally, remember to be patient and be prepared for no-replies! Recruiting people for feedback can take a few weeks. However, the end result will be invaluable to the success of your project.
I have explored countless business ideas over the years many of which morphed into better ideas because of research and gathering feedback.
As I highlighted above, these days there is an abundance of ways you can gather insights and feedback from your competitors and your customers.
Use free and/or inexpensive online tools and forums like SurveyMonkey, Quora, Facebook groups, etc, to gather fast insights and make something that is informed by data.
You can do so much more with cold hard data that tells you exactly why and who you are building for.
Keep it simple and cost-effective when starting out.
Sometimes the thought of planning, coordinating, and executing a research plan can cause you to put research on hold and proceed with a vague notion!
However, from experience, this is not where you want to be as you’ll waste time and money.
Investing a bit of time in the early stages is essential to your success.
Trust me, you’ll never look back.