M2X Network Badge

Tech Product Market Research: Who to Trust and What To Do

Market data research tells you where the overall market & select verticals are currently headed…but there’s more B2B marketers need to grasp.

Tech Product Market Research: Who to Trust and What To Do

Sikov/Adobe Stock

Alan Brawn

Today’s topic at hand is the concept of market research, and what it portends for all of us in B2B business.

The first category of research is market data research. This may include trends, products and/or services, and may or may not be vertical market specific. Typically, this is an overview of a short (3 to 5 year) period leading up to the current time, and then a forecast or trend line into the future, again 3 to 5 years.

The second category is research conducted by and/or for a specific company. This focuses on their company products and/or services and current and potential customer base. In the commercial and residential AV industry, both are (or should be) used extensively as the foundation for business decisions. If this sounds as if it has serious implications…then you get a gold star.

Before I delve deeper, at the top of my list of pet peeves is the legitimacy of (so-called) market data and trend research. What do I mean by my use of the term legitimate?

…it is labeled “market research” with a pretty graphic, and clearly somebody had to conduct that research, so many assume it must have some validity.

Most people take market data research at face value. They simply use a search engine to find a statistic, forecast, or chart/graph… and no matter where it comes from, it has (at first glance) the patina of truth.

After all, it is labeled “market research” with a pretty graphic, and clearly somebody had to conduct that research, so many assume it must have some validity.

This assumption is risky at best, especially if you are depending on the data as part of a business plan.

The fact is that market research spans the gamut from illegitimate (not done properly, or outright inaccurate) to legitimate, and everything in between. Our goal is to point out what legitimate market research entails, and the importance of discerning what should be used as a business tool…and what should be discarded for what it is, in many cases simply anecdotal estimates.

How big a sample is sufficient to report as a meaningful statistic or trend? Where is the quantitative data, how was it complied?

It boils down to who you can actually trust, what their focus is, and their methodology. Examples of those with exemplary track records of “doing it right” include companies like Forrester Research Services, Gartner Research, PEW, and the NPD Group to name a few.

As you do diligence in selecting a firm to work with, keep in mind that many focus on specific verticals such as IT, retail, or healthcare. Select a company with a track record in the area you want to explore. It will cost you money, but consider this an investment in your growth, with accurate information to back you up. Really knowing can be priceless!

The basic rationale for this type of market data research is to understand where the markets are headed, how fast the markets will grow and what is the market growth potential.

The basic rationale for this type of market data research is to understand where the markets are headed, how fast the markets will grow and what is the market growth potential.

There are also certain market assumptions that stand behind a published forecast. Done properly, this type of research helps you prioritize investments and identify growth opportunities within a specific market. This enables you to base your critical business decisions on proven methodologies and quantitative data.

What is market data research?

Market data research tells you where the overall market and select verticals have been and are currently headed…but that is only part of the research mix.

A B2B company needs to focus on where they fit in the equation for their products and/or services and customer base. In the commercial and residential AV industry, both are (or should be) used extensively as the foundation for business decisions.

Let’s take a look at what company specific market research is all about and why it is necessary. At its core, this type of company centric market research is the process of gathering information about, and understanding your business’s target audience, and customers to determine how viable and successful your product or service would be, and/or is, among these people.

Related: M2X: Tech Marketer Episode 6

Ultimately, it is all about understanding the buyer’s past, current, and potential.

With the buyers in mind, one marketing expert provides us a compelling rationale for conducting this type of research. He tells us that “market research allows you to meet your buyer where they are. As our world (both digital and analog) becomes louder and demands more and more of our attention, this proves invaluable. By understanding your buyer’s problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.”

He goes on to say that B2B market research also provides insight into a wide variety of things that impact your bottom line, including:

  • Who makes up your market and what are their challenges?
  • What companies are trending in your industry and in the eyes of your potential buyers?
  • What influences purchases among your target audience?
  • Where does your target audience and customers conduct their product or service research?
  • Where and how are your competitors targeting “your” audience?

There are two main types of market research that your business can conduct to collect actionable information on your products including primary research and secondary research.

According to the Hartford Group, primary research is research you conduct yourself (or hire someone to do for you.) It involves going directly to a source – usually customers and prospective customers in your target market to ask questions and gather information.

When you conduct primary research, you’re typically gathering two basic kinds of information:

  • Exploratory research is general and open-ended, and typically involves detailed interviews with an individual or a small group.
  • Specific research is more precise and is used to solve a problem identified in exploratory research. It involves more structured, formal interviews.

Primary research usually costs more and often takes longer to conduct than secondary research, but it gives conclusive results.

Secondary research is a type of research that has already been compiled, gathered, organized, and published by others. It includes reports and studies by government agencies, trade associations or other businesses in your industry.

For small businesses with limited budgets, most research is typically secondary, because it can be obtained faster and more affordably than primary research.

A lot of secondary research is available right on the Web, simply by entering keywords and phrases for the type of information you’re looking for. You can also obtain secondary research by reading articles in magazines, trade journals and industry publications, and by contacting industry associations or trade organizations.

(Note: When you locate the research you want, check its publication date to be sure the data is fresh and not outdated.) Caveat emptor and refer back to what I said about the quality (or not) of random online sources. All are NOT created equal.

One excellent source of secondary research data is government agencies; this data is usually available free of charge. On the other hand, data published by private companies may require permission, and sometimes a fee, for you to access it.

Primary and secondary aside, do not ignore internal sources of information. This is the market data your organization already has at your disposal. Things like sales trends, average revenue per sale, customer retention rates, and other historical data on your business and customer base can all help you draw conclusions on what your buyers might want right now.

Now that we’ve covered these overarching market research categories, let’s get more specific and look at the various types of market research you might choose to conduct.

The folks at HubSpot give us the following to consider:

Types of Market Research

  • Interviews
    • Interviews allow for face-to-face discussions (live and virtual) so you can have a natural flow or conversation and watch your interviewee’s body language while doing so
  • Focus Groups
    • Provide you with a handful of carefully selected people that you can have test out your product, watch a demo, provide feedback, and/or answer specific questions.
  • Product/Service Use Research
    • This offers insight into how and why your audience uses your product or service, and specific features of that item. This type of market research also gives you an idea of the product or service’s usability for your target audience.
  • Observation Based Research
    • This allows you to sit back and watch the ways in which your target audience goes about using your product or service, what works well in terms of the user experience, what roadblocks they hit, and which aspects of it could be easier for them to use and apply.
    • Buyer Persona Research
    • This gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, what they need from your business and brand, and more.
  • Market Segmentation Research
    • Market segmentation allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics — this way, you can determine effective ways to meet their needs, understand their pain points and expectations, learn about their goals, and more.
  • Pricing Research
    • Pricing research gives you an idea of what similar products or services in your market sell for, what your target audience expects to pay — and is willing to pay — for what you sell, and what’s a fair price for you to list your product or service at. All of this information will help you define your pricing strategy.
  • Competitive Analysis
    • Competitive analyses are invaluable because they give you a deep understanding of the competition in your market and industry. You can learn about what’s doing well in your industry, what your target audience is already going for in terms of products like yours, which of your competitors should you work to keep up with and surpass, and how you can clearly separate yourself from the competition.
  • Customer Satisfaction and Loyalty Research
    • Customer satisfaction and loyalty research give you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g. loyalty programs, rewards, remarkable customer service). This research will help you discover the most-effective ways to promote to your customers.
  • Brand Awareness Research
    • Brand awareness research tells you about what your target audience knows about and recognizes from your brand. It tells you about the associations your audience members make when they think about your business and what they believe you’re all about.
  • Campaign Research
    • Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. It requires experimentation and then a deep dive into what reached and resonated with your audience so you can keep those elements in mind for your future campaigns and hone-in on the aspects of what you do that matters most to those people.

Before moving forward, I suggest you review (in detail) the preceding list of types of market research. Look at each one and ask yourself if the information gleaned in each type is not only beneficial, but in many cases, existentially necessary to your company strategy and decision making.

There are three that I want to emphasize:

Product/Service Use Research

This is the how and why your audience uses your product or service. This relates directly to your value propositions. Remember that value propositions differ by vertical markets and customer types. One size or message does not fit all.

Buyer Persona Research

Ultimately it is all about knowing and understanding the buyer. It is not just knowing “of” them but really knowing them. Know what their challenges are, why they want your product or service, what they need from your business and brand, and more.

Competitive Analysis

Competitive analyses are invaluable because they give you a deep understanding of the competition and their place in your market and industry. This tell you where you are and how you can clearly separate yourself from the competition.

Understanding and focusing on “why” helps us create products and services that offer superior value and helps us communicate about them and market them more effectively. Understanding “why” is key to being customer centric. It’s the heart of the “story” in storytelling. It’s crucial to success in any business.

Below are just a few examples of some important “why” questions.

  • Why do consumers use the product or service and what is the value it provides for them?
  • Why do customers use your product or service rather than a competitors?
  • Why do non-customers not buy your product or service?
  • What product features or benefits drive the purchase decision, and why?
  • Why do some customers leave or switch to another product or brand?
  • When new products, new technologies, or new distribution channels change their behavior, why did they change? What drove the change?

The answers to “why” are always a moving target. The question and answers are as different as the people, segments, and uses of the products or services. The questions and answers change as the marketplace changes—as new competitors, new products, new features, new technologies, or new distribution channels become available.

If we don’t understand the “why,” then the who, what, where, when, and how won’t help us much. We need to always remember to keep our eye on the “why.”

If we don’t understand the “why,” then the who, what, where, when, and how won’t help us much. We need to always remember to keep our eye on the “why.”

While books and academic curriculums have been dedicated to the topic of market research, our goal has been to educate you on the basics and best practices with a healthy dose of skepticism (aka reality) as to what is legitimate and illegitimate research and how this can positively or negatively affect your business.

At its core, marketing research is about asking probative questions and taking these responses into consideration to grow your business. At this point you have surmised that legitimate market research is a lot of work and has a price tag and you would be right.

The fact is that the quality and depth of this research will detriment the success, stagnation, or even failure of an enterprise. As the famous cinema Detective Harry Callahan once said, “Do you feel lucky? Do ya?”

ARTICLE TAGS

Analytics