How to Do Market Research: A Minimalist Guide and Template
Not sure if you should invest in market research?
Some business owners take market research into overdrive, spending tens or hundreds of thousands of dollars on complicated studies that may or may not produce valuable insights.
But some level of market research is fundamental for success, whether you’re a new business or an established brand with decades of experience.
Ask yourself:
- Would you go into battle without studying the lay of the land and your enemies?
- Would you buy a house without researching the neighborhood, crime rate, schools, and resale values?
- Would you invest in a business without understanding the competitors, audience, and industry trends?
The answers are obvious: no, no, and no.
You need basic background knowledge of your market to decide how to position yourself and where to invest your budget. If you don’t do market research (and don’t use a market research template), your venture is more a gamble than a strategic play.
How Much Market Research Should You Do?
The amount of market research you need to do depends on your experience in the industry and your investment.
If you’re an established brand, you likely know the market well. So if you’re launching a new product, your market research will be minimal; you simply need to examine substitute products, competitors, and the target customer.
But if you’re entering a market you’re unfamiliar with, you need to conduct a substantial amount of market research — enough that you thoroughly understand the industry and the characteristics of your competitors and audience.
Using a Market Research Template to Guide Your Efforts
A good market research template guides you to a strong understanding of your industry, competitors, and audience. It prompts you to explore the essential aspects of your target market, such as:
- Target customer demographics and psychographics
- Competitor landscape and positioning
- Industry size, growth rate, and trends
- Potential market share and sales projections
A good market research template provides structure for your research efforts and ensures you don’t overlook critical information. It’s a useful framework, whether you’re an established brand or just getting started.
How Do You Conduct Market Research?
Start with a SWOT (strengths, weaknesses, opportunities, and threats) analysis of your industry. Make sure your analysis is detailed and includes actionable insights. Otherwise, SWOT will stand for “Such a Waste of Time.”
Then, take the following questions as your market research template.
6 Market Research Template Questions
1. What pain point does your product solve, and is your customer aware of this pain point?
Most businesses either improve upon an existing solution or provide a truly new solution. In the second case, you need to know whether customers are aware of the problem you’re solving.
Do they consciously identify this pain point as a problem? If not, you’ll need to educate them before you can make a sale.
Take the Squatty Potty, for example. Most people didn’t know the ideal posture for eliminating body waste, but the company incorporated (humorous) education into their marketing. Once customers learned how much better their bathroom experience could be with the Squatty Potty, it became a tremendous success.
2. Who are your competitors?
If you don’t think you have direct competitors… you’re wrong. There are other solutions to the pain point you’re trying to solve.
Answer this question from your customers’ perspective. Who else could solve their problem? Who do they consider as alternatives?
3. What makes you unique?
How is your solution different from your competitors’ solutions? List three factors that set your solution apart.
4. Who is your target customer?
This goes beyond demographic information. You need to understand your target customers’ behavior and habits and how they’re influenced (through what channels and what other brands).
5. How well-known are you?
Are you a well-known brand? How much trust do you currently have with your audience? How much do you need to educate your target buyers?
6. How will you accomplish your goals?
What resources do you need? What team do you need to build? What channels should you focus on? What budget do you need?
How to Find Data for Your Market Research Template
Where should you go to answer the questions in the above market research template? Use three key channels:
- Associations and networking groups. For example, if you’re starting a business related to healthcare, visit the American Medical Association to learn about the latest developments within the healthcare industry.
- Government databases. Access these to learn about population density and trends, income levels, and even the weather. (For instance, if you’re trying to sell snowboards, Hawaii won’t make your shortlist of target states.)
- The web. Use these resources to start fleshing out your market research template:
- SEMrush.com
- Moz.com
- Facebook (specifically their targeting and insights within advertising)
- Ads.Google.com (for keyword research)
Your Market Research Template: Final Thoughts
A market research template provides a helpful structure to guide your efforts. By investigating your target customer, competition, market size, and unique positioning, you’ll be well-equipped to make sound business decisions.
So, before launching a new product or venturing into a new market, do your due diligence and invest time in thorough market research. Your success depends on it.
