The basics of how to do market research
In this article you are going to learn how to do basic market research for your online business idea.
I’ll be covering:
- Customer demographics
- Customer psychographics
- Google trends
- Keyword research
- Analyse your competition
- Follow your competition
- Join Facebook groups
- Browse forums
- Facebook audience insights
Once you’ve come up with a business/product idea, it’s time to validate your ideas through market research. Otherwise your venture could be a stab in the dark.
Also, don’t assume you know what your customers really want. As they say, if you assume, you make an ‘ass’ out of ‘u’ and ‘me’.
I know what it’s like though… Starting a new online business is exciting!
This excitement provides an enormous amount of motivation. So you get to work straight away creating a new website, adding new products, setting up social media profiles, etc.
It’s so easy though to get caught up doing all of these tasks. They are important. But without enough market research, there is very little guiding your efforts. Your business ends up like a boat without a rudder, getting taken wherever the wind blows.
Market research is essential before starting your business. It will guide your business decisions, help you find your niche, allow you to actually ‘market’ your product, and ultimately increase your chance of business success. It might even save you from a bad idea!
Below I’m going to share a few methods that have worked well for me.
1. Understand your customer demographics
Firstly, what are customer demographics?
The definition of demographics according to Oxford Languages is:
“Statistical data relating to the population and particular groups within it.”Oxford Languages
In other words, customer demographics is about understanding their location, gender, age, income, education, marital status, etc.
Here are some basic questions that will help you understand your customer demographics. Use these to guide your market research efforts.
Customer demographics examples
- How old is your ideal customer?
- Are they male or female?
- Where are they located?
- What is their occupation?
- What is their education level?
- Are they married?
2. Understand your customer psychographics
What are customer psychographics?
The definition of psychographics according to Oxford Languages is:
“the study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.”Oxford Languages
In other words, psychographics is about understanding your customer’s values, beliefs and goals. What motivates them? i.e. what are their hopes, dreams and desires; their biggest problems, pains and fears? Understanding your customer psychographics allows you to actually ‘market’ your product to the people who need/want it the most.
Here are some basic questions that will help you understand your customer psychographics. Again, use these to guide your market research efforts. The idea is to figure out who they are and how you can help them.
Customer psychographics examples:
- What are your ideal customer’s biggest problems and frustrations?
- What are their fears?
- What are their biggest wants and desires?
- What kind of person is your ideal customer?
- How do they view the world?
- What are their values?
- What are their beliefs?
3. Google trends
Using Google trends for market research is a great way to get started. Just enter your idea, niche or topic to see how it has trended over time. You’ll also gain insights into who is interested, related topics and related searches.
Google trends is your birds eye view.
4. Keyword research
Another great place to begin your market research is through keyword research. Keyword research helps you figure out what people are typing into Google. Similar to Google Trends but more in-depth.
You’ll find that people often share their biggest problems with Google. Not only can keyword research help validate your product idea, it can also provide insight into your ideal customer and what motivates them. How many times have you done a search looking for something or needing help solving a problem?
Use keyword research tools to figure out what people are searching for and what questions they are asking relating to your product idea.
Business Example = vegan clothing brand
Let’s say your business idea is a vegan clothing brand. Is this a good idea? Also, you don’t have much budget, so if it is a good idea, you’ll probably need to start with just one type of clothing like T-shirts. But is this the best type to start with?
Well, keyword research can help us determine if there is any demand for vegan clothing. And if so, which type of clothing to start with.
A great place to start here is by entering your niche or product idea into Google search and checking the auto suggestions. The suggestions are based on similar queries from other people.
Google auto suggestions can give you an idea about what people are searching for. Once you can see what they are searching for, we can use SEO tools to check how many times each of the suggestions is searched.
According to Ubersuggest, ‘vegan clothing’ is searched ~320 times per month in Australia. This shows demand.
What about ‘vegan tshirts’? According to Ubersuggest this is searched 260 times per month in Oz. More specific demand.
I also found that ‘vegan shoes’ was searched 1600 times per month in Australia! So even though we were initially thinking about doing vegan t-shirts to start, perhaps it would be better to start with vegan shoes?
As you can see, keyword research can provide really good insights into your product ideas. It can even give you new ideas. I believe that making data driven decisions will increase your chance of success.
Keyword research tools like Ubersuggest also provides insights into the questions people are asking.
Of the top 5 questions asked relating to ‘Vegan’, 2 of them are clothing/shoes related!
Best free keyword research tools
5. Analyse your competition
Having direct competition for your product idea can be good. Competition means demand for a certain product or range of products, which validates your idea.
Let’s take our previous vegan clothing brand as an example. A quick Google search for ‘vegan clothing Australia’ will show you our biggest competitors.
#1 on the list is Velvety – https://velvety.com.au/
Simply browsing this website will give you a range of product and marketing ideas. If your competitor is running Facebook ads, Google ads or something else, you’ll likely start seeing their ads too. Not because your phone is spying on you.. But because a re-marketing pixel was triggered, which added you to their list for future marketing.
You can even use one of the aforementioned SEO tools (e.g. AHREF’s website explorer tool) to analyse their entire website and see which of their product pages get the most visits. This might indicate their best performing products, therefore demand for a specific type of product. This kind of information can drive your own business decisions.
I would also see if they are running ads. If so, analyse them and see which ones are working. Go to the Facebook Ads library, type in the competitor name and you’ll see all of their ads. Pretty cool aye!
Wondering what eCommerce platform your competitor uses? Go to builtwith.com and enter you competitor’s website URL to discover their eCommerce platform.
In addition to this, you’ll discover all software they use; even their shipping provider integrations!
The above tactics alone are enough to reverse engineer your competitors entire marketing funnel. No point trying to re-invent the wheel.
Need help deciding on an eCommerce platform for your needs? Discover which eCommerce platform is best.
6. Follow your competition
Your biggest competitors are the probably the biggest because they know what they are doing. So it pays to follow them. By following them across all social media platforms, you’ll get insights into the latest trends, product ideas, customer questions, queries and concerns.
Potential places to follow your competition include:
- Other social profiles
- If they have a newsletter, subscribe to it.
7. Join Facebook groups in your niche
One of the best ways to learn about your target audience and ideal customer is to find and join relevant Facebook groups in your industry/niche. These groups are a goldmine of customer insights. In these groups you’ll often find people sharing their biggest problems and wants.
For example, if you were in the vegan clothing niche, do a search in Facebook for ‘vegan clothing’. You might not find this exact niche, but you will certainly find vegan related groups. Finding vegan related groups but not an exact group for your niche is probably best.
This way you can learn about your target audience, narrow down your ideal customer and then create your own group. 😉
Some of the biggest and best vegan Facebook groups you could join:
In this case, I couldn’t find any groups that were specifically created for vegan clothing. So if I were creating a vegan clothing brand and my target audience were hanging out in other Facebook groups, I would create my own Facebook group for vegan clothing to fill this gap in the market.
8. Browse forums
Browsing forums for threads relating to your niche is another great way to gain insights on your potential customers. You’ll find there are quite a lot of people asking questions and seeking answers.
Market research using Reddit
Reddit is also a great place to start. If I was thinking about the vegan clothing niche, I would start by joining the below threads:
Market research using Quora
I would also try Quora and just type in ‘vegan clothing’.
9. Use Facebook Audience Insights
Facebook has a very useful tool called Audience Insights. This tool can be used for market research if your target audience uses Facebook.
Note that this tool is normally used to get audience insights about your Facebook business page and also fine tuning your FB ad campaigns. But it can also be used to get insights into everyone that uses Facebook.
Facebook Audience Insights will help you understand your target audiences’:
Check out my guide to using Facebook Audience Insights for market research.
Final thoughts about how to do market research
Use your excitement and motivation to go deeper and deeper into understanding your target audience and ideal customer.
Remember, without enough market research, there is very little guiding your efforts. Your business ends up like a boat without a rudder, getting taken wherever the wind blows.
Market research is essential before starting your business. It will guide your business decisions, allow you to actually ‘market’ your product, and ultimately increase your chance of business success.
I hope this basic guide helps!
What market research methods have you found to be helpful? Comment below.