3 Low-Cost Market Research Tips for Startups
Startups are usually big on ideas and vision, but short on cash. And, with a small budget, anything outside of typical operating costs might be deemed unnecessary–it’s about a lean and mean approach to overhead. Unfortunately, for most small businesses and startups, that means skipping over one of the most crucial steps to a successful launch: Proper market research.
Market research asks questions like “What do people want?” and “what are they willing to pay?” Some startups view research as an extravagance, but the successful ones know that it’s something you can’t afford to do without. Low-cost methods like these can still help you avoid a marketing misstep in your startup’s infancy.
Utilize Free Primary Research
Primary research comes straight from the source: Your customers. Market research firms poll customers, hold focus groups, and gather personal data, but you can scan nontraditional sources to get similar results. Try these methods for gathering data about who your customers are and what they want:
- Online surveys. Free online survey sites (think SurveyMonkey) can be an excellent resource for asking questions and getting feedback. The quality of the data you’ll get hinges heavily on the questions that you ask, however, so make sure to be thoughtful. Instead of asking what a customer’s preference is, you could ask “What frustrates you most about [related topic]” or “Rank these product features in importance to you and your family.” When you ask thoughtful questions, you get the most out of your surveys.
- Social media and forums. If you really want honest answers, utilize social media. Not only will you get off-the-cuff responses, but you can utilize your friends list as a way to reach out to as many people as possible. It’s time to call in a favor: Ask your friends and family to share with their friends list to extend your reach. You can also skim research from online forums such as Reddit. It may not be the most formal method for research, but you’ll still gather valuable insight as to what customers really want.
Check Out Your Competition
One of the most important facets of market research for startups is sizing up your competition. You need to know more about your competition’s products and location to ensure that you’re offering something comparable in quality and price. The U.S. Small Business Administration has a free tool called Sizeup, which allows you to analyze your competition based on industry and location.
Ask for Lead Users
If you plan on marketing a product, adopting a lead user program helps you work out the bugs before you go public. Lead user programs typically involve you offering one of your products for free to someone who matches your ideal customer profile. That individual spends time with the product and offers honest feedback about what works and what doesn’t. For a few bucks in product, you receive insights that you can’t get anywhere else–real time, real users.
Don’t make the mistake of skipping market research because of a tight budget. Most of your startup funds might be spoken for, but market research can give you the information you need to better serve your customers and increase your chances for success.