Consumer Research: The Most Important Part of Understanding Your Market

Once you set out on your own entrepreneurial personal mission, it’s important to know how you can actually be of value to those that you’re looking to add value to.

The best way that you do this is through market research.

However, what that actually means can differ depending on who you ask. In this post, we’ll look at some mistakes people make in their research, and how to make sure you’re asking the right questions.

 

Anti-Disruption: One Secret to Not Going Broke

When I was in grad school, I had the opportunity to judge business plan competitions a couple of times. As part of those business plans, students were to do some “market research”. This basically meant they got to use essentially academic research methods to learn about the industry in which they were going to bring “disruption”. Many of these methods are discussed in this article in a Entrepreneur Magazine post.

Haha. Talk about fun. 😛

Until I got into The Foundation, 3 years after I got out, this was the way that I thought ALL entrepreneurial endeavours started.

However, what I learned, and what many people make mistakes in is that your business doesn’t have to be disruptive at all.

In fact, if all you’re wanting to do is make an income via your personal mission, then trying to go for the home run your first go-around might not make the best financial sense.

Instead of going to go dig for gold yourself and potentially going broke in the process, why not build a strong foundation by first supplying the tools to those gold diggers? Some might be striking it rich, but there are many MANY more of them who are failing.

Don’t run those odds on yourself – play it safe and be a tool maker. Just like jean and shovel makers were needed in the actual gold rush for those going after the gold (and the most consistently profitable), people who are providing simple services are still needed today too.

 

Do Not Underestimate the Importance of Primary Research

In the above linked Entrepreneur magazine, primary research is briefly mentioned. Most of the article discusses SECONDARY Research.

What’s sad is that most aspiring and existing entrepreneurs do the exact same thing. They don’t do any consumer research!!

It’s like surveys and talking with one’s customers (or potential clients) directly is the last thing most business owners want to do – even though those same customers are the ones that are directly impacting their bottom line.

Another thing about secondary research is that many times it’s old data. You hear more talk about trends and being “where the market is going, not where it’s at” then you should. Some people really don’t know what that last statement is really saying! Sure it’s a great place to start, but it’s not going to ever you the full picture of what’s actually going on.

 

Getting it from the Horse’s Mouth

There’s an idiom that goes “straight from the horse’s mouth”. If you haven’t heard this before, well, chances are you aren’t near a farm. But basically, it’s referring to the fact that farmers want to check the mouth of a horse before they buy them from someone.

In our case, it means “to get information from the person most directly involved or best informed” or the customer.

Now I know what you’re going to say, “But JC, people hate doing surveys! How am I to get them to answer my questions?”

Good question.

As you know, there’s a few methods which can be done online or in person:

• Interviews
• Focus groups
• Surveys
• Questionnaires

I’ve listed them in the order that you’ll get the best results. If you actually get the chance to interview someone, you’re going to have great data. If you send someone a survey or questionnaire, there’s going to a much lower chance of getting results back.

 

Questions to Ask

Now, based on whether you’re developing something new or something you’ve already made, you’ll have different questions on what you’ll be asking those individuals.

If you’re planning on releasing a new product or service to a customer, there are 6 base questions you need to know the answer to.

If you were going to put these in a questionnaire, they might go like this:

• What is the biggest challenge that they currently have in their work?
• What are their long term goals?
• How will achieving those long term goal feel?
• Have they already tried in achieving that long term goal? Any failures or frustrations did they experience in getting there?
• What are their goals right now?
• What are they willing to change to achieve those goals this next year?

These matter for various reasons – but the main reason is that you’re looking to ask questions that they often don’t think about as often as they’d like. Also, if you’re going to be helping them, you need an emotional anchor in what they’re trying to achieve. This anchor is their Why for doing whatever they’re doing.

People don’t buy facts – they buy feelings.

However, I will add that the more personable you can make the experience, the more information you can collect and the more emotion you can tie to their responses.

That’s why it’s best to learn how to properly conduct an interview. Not only will these base questions be answered, but you’ll be able to get more clarification. If you get the chance, ask these questions as followups:

• Can you describe your typical working day?
• In your typical working day, where do you feel like you’re wasting the most time?
• What factors do you consider when purchasing a certain product (or service)?
• What do you like or dislike about current products (or services) currently on the market?
• Any areas would you suggest for improvement?
• What would be the smallest version of this product (or service) that’d you pay for?
• What is the appropriate price for a product or service like this?

These are good questions because most often than not the answers don’t lie on the surface. (That’s why idea extraction has the name it does!)

Action Steps: Get Some Answers!

Depending on the type of work you’re looking to do, these questions will change. For example, if you’re looking to build a certain kind of software like The Foundation initially focused on, you’ll want to ask more software oriented questions. If it’s a service, lean that direction.

Sure, the more responses you have, the better. However, I would attempt to get 12 to 15 responses at first so you can start recognizing some patterns. The most used response – that needs to be included in your (minimum viable product). Anything after that validates what you’re already doing.

Let me know below how it works out for you or if you have any questions!