How to do market research in 4 steps: a lean approach to marketing research

In this post, you’ll learn how to conduct quick, effective market research without hiring an agency—something called lean market research.?It’s easier than you might think, and it can be done at any stage in a product’s lifecycle and these can be applied to any market in the world.

What is market research?

Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

Why is market research so valuable?

Without research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters…

• Obsessing over your users is the only way to win. If you don’t care deeply about, you’ll lose potential customers to someone who does.
• Analytics gives you the ’what,’ but research gives the ‘why.’?Big data,?user analytics, and dashboards can tell you?what?people do at scale, but only research can tell you what they’re thinking and?why?they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.
• Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning,?death by best practices, and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and,?focusing on their customer experience?you’re less likely to get pulled in the wrong direction.
• Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you will likely need to make changes once your untested plan gets put into practice.

Advantages of lean market research

Lean User Experience (UX) design?is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new features.

Lean market research can help you become more...

• Efficient: it gets you closer to your customers, faster.
• Cost-effective: no need to hire an expensive marketing firm to get things started.
• Competitive: quick, powerful insights can place your products on the cutting edge.

4 common market research methods

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked?2,000 Customer Experience (CX) professionals about their company’s approach to research, surveys proved to be the most commonly used market research technique.

What makes online surveys so popular??They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to?analyze open-ended questions?whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you.?Grab a template and share with your customers in just a few clicks.

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater?empathy for their experience, and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most dangerous

Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, and/or marketing message to gain deeper insights.

What makes focus groups so dangerous?

If you’re new to market research, I wouldn’t recommend starting with focus groups. Doing it right is expensive, and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation is no replacement for customer surveys and interviews.

How to conduct market research (in a lean way)

The following four steps will give you a solid understanding of who your users are and what they want from a company like yours.

1. Create simple user personas

A?user persona?is a semi-fictional character based on?psychographic?and demographic data from people who use websites and products similar to your own.

How to get the data:?use on-page or emailed surveys and interviews to understand your users.

How to do it right:?whatever survey/interview questions you ask, they should answer the following questions about the customer:

• Who are they?
• What is their main goal?
• What is their main barrier to achieving this goal?

Pitfalls to avoid:

• Don’t ask too many questions!
• ?Keep it to five or less (preferably three), otherwise, you’ll inundate them, and they’ll stop answering.
• Don’t worry too much about typical demographic questions
• ?like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it:?Smallpdf?ran an on-page survey for a week or two and received 1,000 replies, which revealed that many of their users were administrative assistants, students, and teachers. Then they created simple user personas like this one for admins:

• Who are they?
• Administrative Assistants.
• What is their main goal?
• Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.
• What is their main barrier to achieving it?
• Converting a scanned PDF doc to a Word file.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

• Overt observation involves?asking customers?if they’ll let you watch them
• use your product. (Smallpdf did this with administrative assistants.)
• Covert observation means studying users ‘in the wild’ without them knowing.
• This only works if you sell a type of product that people use regularly, but it offers the purest observational data because people often behave differently when they know they’re being watched. (Smallpdf did this with university students.)

Tips to do it right:

• Record an entry in your field notes, along with a timestamp, each time an event occurs.
• Make note of their workflow,?capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

Pitfalls to avoid:

• Don’t record video or audio, regardless of your method (overt or covert). If they know you’re recording, it’ll make them nervous. And if they don’t know? It’s just plain creepy.
• Don’t forget to explain?why?you’d like to observe them (for overt observation).
• ?They’re more likely to cooperate if you tell them you want to improve the product.?

How Smallpdf did it:?here’s how Smallpdf observed two different user personas.

Observing students:

• Kristina Wagner, an Interaction Designer from Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance.
• One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e., self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).
• Observing administrative assistants:

Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. Watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

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