Best Practices for Conducting Market Research

By Leeyen Rogers

Ideas are the strength behind marketing teams—good ideas, misguided plans, proposals that succeed or fail. There are many instances, however, of businesses moving forward with new products and campaigns that miss the mark due to companies neglecting to conduct proper market research.

In 1985, Coke notoriously prematurely reacted to research that it conducted. Blind taste tests confirmed that consumers preferred Pepsi’s sweeter flavor, so Coke responded by replacing its flagship cola drink with an alternative that better matched the competitor’s taste, and rebranded it New Coke. The American public’s reaction was displeasure, the new formula was discontinued, and the original classic soda was brought back.

The problem was that the data wasn’t embraced holistically, and just a piece of the puzzle was used to make enormous changes (leading to tampering with the core product that brought Coca-Cola success). If all available information had been considered, Coke’s marketing executives would have known that Coke’s taste takes a second seat to a myriad of other factors that keep its consumers loyal and coming back: the penetrating message of “Coke is the Real Thing,” the nostalgia factor, and a classic all-American image.

In response to finally listening to customers and learning about their loyalty to the original product, the soft drink was renamed Coca-Cola Classic, signifying that it isn’t going anywhere.

Unlike Coca-Cola, many companies and startups do not have the budgets or brand loyalty to bounce right back (or even come out ahead as in Coke’s case—people were so happy to have the original soda back, sales shot up) and shrug off a major malfunction or failure. However, there are several best practices that should be considered before launching a new product, feature, or campaign.

Conducting market research: 5 best practices

Market research is often neglected, and many companies go forth and carry out plans without collecting and analyzing enough information to support their decisions. Market research should be conducted on a continuous basis and companies should always be listening to their users.

Market research surveys allow you to gain insights about your users quickly, affordably, and effectively. These insights can be used to do a variety of things within a company: measuring satisfaction, identifying trends, and developing new products and features.

1. Define your scope

You should define the breadth of your reach and know who your potential customers are based on what your product offering is. For example, Facebook's customers are businesses and consumers alike who want to connect with others; Apple's target market is people who can pay a premium for consumer electronics.

Once you have a tangible goal of who might be interested in your product, narrow your focus down to why they should purchase from you instead of your competitors. Do you offer the only product currently available that does X? Do you offer the lowest price? Do you provide exceptional support and service? Once you can nail down the key questions to ask, you can dive deep into the details—specific product features that would be useful, user experience, issues and problems, etc.

2. Ask the right questions

Before you can begin to ask your users or prospective users questions, you should have already conducted some preliminary market research, analyzing information that is already available. This includes government sources of industry data (e.g., the Bureau of Labor Statistics), as well as data from trade associations. Market data provided from the government is generally accurate, well-reviewed, and most importantly for early-stage startups, available for cheap or for free.

Through your research, you should be able to identify competitors and get a sense of who your target market is. Then, you are ready to proceed with your task of capturing quality, actionable data. If you’re trying to gain insights and information about what kinds of features would be most popular for your new product, you need to establish a foundation. Does your product solve a problem that people are experiencing? Does it fill a need? Does it offer something useful and desirable that competitors don’t provide? Is your unique selling proposition attractive enough for users to leave a familiar product for yours?

Once you have enough compelling data that there is a need for your product, then you can begin building it, while keeping an eye on the pace of the competition, new technologies, and market changes. If you already have a core product and want to conduct market research to determine what sorts of new features your users would like, or what changes would be beneficial to their experience, then you’ll want to go directly to the users and ask them questions. Contact them via surveys or through whatever channels of communication they use to contact you (i.e., social media, blogs, forums, email, etc.).

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• Make Positive Online Reviews Work for You

3. Design your survey to be simple

Make sure that your survey appropriately speaks to the survey taker. Simplicity is crucial; ask questions that are clear, concise, and will help you procure the specific knowledge you’d like to gain. Do not ask leading questions, or any question that subtly prompts the respondent to answer in a certain way. It’s better to allow for neutral and “N/A” answers than to get non-responses masquerading as real answers that will result in faulty and biased data.

A leading question: How fast was the car going when it smashed into the bus? This question implies that the car was at fault, and the word “smashed” implies a high speed.

A better question: How fast was each vehicle going when the accident happened? This question does not assign any blame or prejudgment, and is the preferable choice in a survey.

4. Select the appropriate structure for your questions

The way you structure your survey will affect how you analyze the results. Prior to creating your survey, consider the answer styles that will make the most sense for your questions:

• Categorical answers—These are unordered labels and are great for categorizing people into groups. You can create your survey such that all of the questions are based on an initial categorical answer that the survey taker selects.
• Ordinal answers—These responses are provided in a format where they are scored along a range (e.g., "strongly disagree" to "strongly agree"). Note: In many cases, there should be an option for “N/A” for when a question doesn’t apply to the respondent; if a respondent is forced to choose randomly, your results may be skewed.
• Interval answers—Interval answers are provided in ranges (e.g., “ages 25-30”). Intervals should be equal sizes (e.g., five-year blocks), or else they should be treated like categorical answers.
• Fill-in-the-blank form fields—pen-ended answers are great for optional responses, and also provide an opportunity for respondents to get anything they'd like off their chests. These answers require more time to look at manually, but can provide valuable qualitative data.

5. Follow up

Always thank your survey takers for their time in helping your company improve your product and brand. If you had offered an incentive to fill out a survey, such as a chance to win a gift card, then follow up by saying something along the lines of  “Thank you. You have now been entered to win a $100 gift card!”

You can drive these connections further by following up later with something relevant that was shared and to improve a user's experience with your brand. For example, if people had checked off that they wanted a certain new feature, and the feature is now live, let them know that the requested feature is now available. (“Thank you for offering your valuable feedback. We’ve listened, and have moved forward with X. We hope that you love it.”)

You can also tailor your follow-up based on demographic information provided by respondents. For example, if a survey taker listed “education” as their profession, then your follow-up can include useful and relevant content about additional ways your tool can help teachers and other education professionals.

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