The goal of good primary market research is to understand your customer in all dimensions: rationally, emotionally, economically, socially, culturally and more. It is not the customer’s job to design your new product. That is your job. The customer is the expert of their problem, and you are the expert in finding a solution to that problem.”
The entrepreneurship community has lagged behind in incorporating primary market research into startup formation, which is a significant missed opportunity. Customer-focused companies such as Procter and Gamble and leading product design firms such as IDEO have long practiced primary market research in their user-centered design processes.
A few key definitions
- Primary market research: When you directly interact with potential customers to gain knowledge specific to your potential new venture.
- Secondary research: Material you get from sources other than the potential customer. It is indirect.
- Qualitative vs. quantitative research: Qualitative research is exploratory research that helps you generally understand a topic. Quantitative research focuses on gathering specific data to prove or disprove the hypotheses created in the qualitative phase.
The five biggest obstacles to good primary market research
The fundamental concept of primary market research sounds easy, but doing it is not. Here are some of the pitfalls.
1. Lack of structured process: While there needs to be flexibility in how you obtain information, you have to have a process and know that it is a process!
2. Not properly executing the designed process: No process will work if it is not used.
3. Confirmation bias: When you only see the information that confirms your worldview, and you ignore or block out any other information.
4. Selection bias: The people you interview may not be a valid representation of your target customer.
5. Social acceptability bias: Family or friends are unlikely to give you accurate answers because they don’t want to offend you. You need brutally honest feedback from unbiased people.
There are other biases as well. Being data-driven is good, but the data can be made to mislead as well. A great way to minimize biases is to have multiple people in the room conducting the research, with at least one of them trained about the biases inherent in research.
Process and techniques
Here is a streamlined process guide.
1. Make a plan: Without a plan, you’ll waste the time of your potential customers and they will get frustrated. A general plan will look much like the following:
- Write out the goals and objectives of the research, and a detailed description of the research technique.
- Define recruitment criteria for interviewees.
- Develop supporting content (e.g. discussion guide, landing page, online survey, etc.).
- Recruit subjects.
- Run the research program.
- Digest results, next steps.
Of these items, the discussion guide is often the most overlooked for its value. You should constantly update it.
2. Start with secondary research . . . but not too much: Before you start, do some homework so you know the basics about the market.
3. Start qualitative before quantitative: You can’t put a quantitatively focused questionnaire together until you know what questions to ask. In your initial interviews, focus on open-ended discussion with customers. You’ll later synthesize their responses to form your quantitative surveys.
4. Source candidates to engage with, and use them to find more candidates: The best places to find candidates are at “watering holes,” which are those places where your target customer congregates physically or digitally. The sourcing process requires creativity, but here are some ideas to help you generate leads:
- Physical watering holes: While digital watering holes can be convenient, you need to get out of your office and interact directly with people.
- LinkedIn or Facebook groups: You can usually find a group that is tied to your target customer.
- Blogs or online discussions.
- Industry groups and membership lists.
- Ads: Advertise on Google or Facebook, targeted at specific demographics, for as little as $20 to get the names of interested people. If no one responds, that is important information too.
- Read publicly available information: When you do your secondary research, you will likely run across some names linked to your market. Write those names down and contact them.
- The last question: Your last question at the end of each interview should be “Who else do you know that I should speak to? Would you be willing to make an introduction?”
5. Initial contact: Now that you have your initial list of people to contact (a list that should continually grow), things get real. You have to persuade each contact to give you at least 15 minutes of their time. When contacting the candidate, reference someone he knows. Explain that you are doing research to try to help make his job or life better. Be completely in inquiry mode and not sales mode. Still, be steeled for lots of rejection. It is never easy, but it gets much easier the more you do it.
6. Act like a great journalist: Great journalists have excellent active listening techniques to get people to talk. They have a positive voice and physical stance when engaging. They are incredibly interested and empathetic. They shake their head and say “yes” a lot and are nonjudgmental. They listen intently.
7. If you can, have two people conduct the interview: Having two people conduct the interview allows one person to concentrate completely on engaging the interviewee while the others is taking detailed notes and observing the interviewee’s non-verbal signals.
8. Constantly make sure you are interviewing the right people: Put together a short recruitment questionnaire as part of your research plan that screens out people not in your target customer group.
9. You should be surprised: The point of qualitative primary market research is to develop new hypotheses, so if you are not surprised, you are not learning anything.
10. Moving to quantitative: Once you have developed significant hypotheses that can be tested, move to start to test them in a more data-driven manner.
11. Perceived as opposed to real value: There is a gap between real and perceived value. Both matter, as does the gap between them. Explore them in both your qualitative and quantitative research.
12. Don’t always believe what is said: Often people say things with the best of intent, but what they do matters more than what they say. A/B testing (showing different variants of something to different test groups) is very valuable here.
How do you know when primary market research is complete? It never is. Good entrepreneurs are constantly interacting with customers and seeing new opportunities and refining their offerings.