How to Conduct a Market Research for an Online Business?

You have a fantastic idea for your online business. You have designed a superb product or service that is sure to win tons of customers. You cannot wait to seize the business opportunity and start selling it online. You are eager to kick-start the venture and accelerate business growth.

But wait! Before you shift into action, you first need to check whether there is a market for your product or service. Without proper groundwork, you cannot fine-tune your product/service to match customer expectations.

This is where market research comes into play. Many business owners neglect the crucial step of market study. Why bother with market research when your product is perfect? Wrong!

Entrepreneurs believe that their product is perfect, just the way it is, and they are confident that they can sell it as it is, without any fine-tuning. Also, they do not want to hear negative feedback about their product. Other entrepreneurs skip market research because they think it’s expensive.

Regardless of the reason, skipping market research is a grave mistake. It’s like constructing a building without laying the foundation. It can cost you heavily in the long run.

Why Do Market Research For Your Online Business?

The companies that succeed in the long run are the ones that have done their initial homework.

The market research presents you with crucial insights into what the buyer is looking for. You get a clear picture of the buyer’s problems, pain points, and what they are looking for. Using this information, you can tailor your product/service to solve the buyer’s issues.

The market study presents you with a blueprint of what the customer is looking for. This helps you design the product/service to appeal to them naturally. Now that we’ve seen what market research is and its importance let’s turn our attention to the all-important question:

How to Do Market Research For Online Businesses?

In this guide, we shine the spotlight on the most efficient ways to conduct in-depth market research for your online business.

1. Online Keyword Research

Probably, the easiest way for market study. It’s fast, easy and free, and helps you get an idea of the overall business demand for your product/service.

How to do it?

1. Type the product category or model you’re planning to launch in Google. Track the number of people who are searching for the product. See if there is sufficient demand for the product in your location. Since you’re an online business, you aren’t limited by geography. Still, it pays to see if there is a demand for the product in your area of operation.
2. The next step is to use Google Keyword Planner. This is a free tool from Google that gives you critical insights on how specific keywords are searched and how often these searches happen. This gives you a clear picture of the current demand for your product/service in the market.
3. An added bonus of using this tool is identifying various related keywords for your product/service. This helps you generate ideas for the right words to use in your:

• § Product name
• § Website
• § Product description
• § Blogs
• § Social media posts, etc.

4. Leverage Google Trends. Google Trends is another incredible market research tool from Google. It helps you identify whether the demand for your product is rising or fading. For example, fidget spinners were the biggest entertainment toys a few years back. Today, they are no longer in demand. Using Google Trends, you can see where in the demand curve your product/service falls. You can analyse if your product is in the rising/falling fad.

2. Leverage the Power of Social Media

Social media is an excellent spot for performing a market study of an online business. After all, most online conversions today happen via social media platforms like Instagram, Facebook, and even Pinterest. Social media is a treasure trove of market information. It helps you uncover tons of data about your target market and audience, all of which can help you shape your marketing efforts later, once you launch the product.

Here’s how to use social media platforms for market research:

• Use hashtags to identify product/brand mentions. See what customers are talking about existing products in your niche. Identify the troubles they face with existing products, positive feedback and incorporate this data into your product design.
• Use Instagram search to identify the trends in your niche.
• See what influencers are speaking about similar products/services. Identify the posts that do well—the ones that engage your target audience.
• Pick up the language and style of your target audience. You can follow a similar manner to capture your target audience’s attention later when you’re promoting your products.

3. Send Out Surveys

Surveys are a great way to find the pulse of the audience. A detailed product survey can help you gather information on what your users want and what they don’t like.

Here are a few ways to use surveys for market research:

• If you’re an existing brand, you can send product surveys to your customers before launching a new product. This will help you get a clear picture of what to include and what not to include in your upcoming product design.
• If you’re a new business, finding the right audience to fill in surveys can be tricky. You can post survey links on your social media pages inviting people to send in their feedback. Offer your audience a special gift—say 10% off on their first order—as an incentive to get them to fill up the survey.

Make sure that you include the right questions on the survey. Make it easy for the audience to give their feedback. Instead of asking them to fill in lengthy answers, ratings, multiple choice answers are a better option to get feedback quickly. Services like SurveyMonkey make it easy to create a professional survey within a few minutes.

4. Beta Testing

Beta testing is getting a group of volunteers to test your product before sending it out to the market. Ideally, the group of people you select for beta testing should include:

• Customers who have previously purchased a product from you
• Customers who viewed your brand but didn’t make a purchase
• Customers who bought from a competitor

It’s easy to find the first two categories from your internal database. For the third one, you can use social media to identify customers who have commented on your competitor’s posts. Send the product, prototype, usage video to your selected testers group and get them to share their feedback.

5. Finally, Size Your Competition

The final step of market research for an online business is to know your competitors. Start analysing the strengths and weaknesses of direct competitor brands to get the lay of the land. Here are a few questions to help you out:

• Is there any specific brand that is dominating the market? What are they doing right? What are they missing out on?
• Is the market saturated with too many brands?
• Are customers overwhelmed with choices? Or do they feel fatigued by the same choices?
• Can you spot the disadvantages of your competitors that you can turn to your advantage?

Do not get discouraged if you see there are multiple competitors in your niche. Think of it as a business opportunity to innovate and stand out from the rest.

Final Thoughts

Most potential entrepreneurs are so enamoured with their product/service that they fail to leverage the data gathered by Google and other online tools. Market research is an eye-opening experience. Even if you thought you know your audience well, it could help you identify areas you missed.

Make sure that you do in-depth market research using the tools listed above. This gives you a vivid picture of the business opportunity for your idea, helping you decide whether you should push ahead with the launch or go back to the drawing board to fine-tune it.

All the best for your entrepreneurship venture!

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3) Where Do the Best Business Ideas Come From?
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5) OkCredit: Simple, Paperless & Secure solution for businesses

FAQs

Q. Which is the best methodology/tool for market research for an online business?

Ans. When conducting a market study for your small business, there are several tools and methodologies that you can adopt. It’s always a smart idea to embrace multiple methods instead of a single one. This ensures that you cover all bases and get an accurate picture of your target market.

Q. What is the SWOT analysis methodology for market research?

Ans. SWOT-analysis helps you determine the Internal Strengths and Weaknesses of your Brand and identify the External Opportunities and Threats in the market. It helps you identify areas where you’re excelling as well as highlight areas that need further work. It’s one of the most popular and easy ways for brand research and business growth.

Q. What questions to include in my market survey?

Ans. Ideally, a well-prepared survey should contain a mix of different question types—rankings, multiple-choice as well as open-ended responses. Ask short quantitative questions to save time and efficiently collate data. Make sure that your surveys include questions on all these categories:

• Business questions
• Brand questions
• Competitor questions
• Demographic questions
• Industry questions
• Product questions

Q. What are the significant types of market research?

Ans. Market research can be classified into four major categories: interviews, surveys, beta testing, and customer observation.

Q. What is the difference between primary and secondary market research?

Ans. Primary market research involves gathering feedback directly from your target customers. On the other hand, secondary research consists of collecting data from market studies, reports, and other sources published by others.