What is Market Research?
Market research consists of systematically gathering data about people or companies – a market – and then analyzing it to better understand what that group of people needs. The results of market research, which are usually summarized in a report, are then used to help business owners make more informed decisions about the company’s strategies, operations, and potential customer base.

Understanding industry shifts, changing consumer needs and preferences, and legislative trends, among other things, can shape where a business chooses to focus its efforts and resources. That’s the value of market research.

Meaning, if your research told you that scientists had recently created a new kind of fabric that helped the wearer lose weight just by putting it on, for example, your retail clothing store might want to adjust its buying plan to test designs using this new fabric. Or if you uncovered that shoppers in your area rely heavily on coupons in making a purchase decision, you might decide to test sending your mailing list a promotional coupon.

Market research can help businesses run more efficiently and market more effectively.

Types of Market Research
While there are a number of market research tools you can use, there are really only two types of market research data:

Primary. Primary data is first-hand information you gather yourself, or with the help of a market research firm. You control it.
Secondary. Secondary data is pre-existing public information, such as the data shared in magazines and newspapers, government or industry reports. You can analyze the data in new ways, but the information is available to a large number of people.
Using primary or secondary data, there are two types of research studies:

Exploratory. Exploratory market research gathers lots of open-ended data from many people to better understand a problem or opportunity. The goal is to gather perceptions and opinions regarding an issue, so your company can decide how to address it. But first you have to understand how your market sees the issue.
Specific. Once you understand the larger market issues, or opportunities, you can use specific questions to gather information that could lead to a new product or service. Market research firms often use specific questions to gather feedback on a new advertising campaign, or to refine a planned new product.
Primary Market Research Tools
While primary research is more time-consuming and expensive, sometimes it’s the only way to get the information you need. The most common primary research tools are:

Surveys. Asking customers a series of questions to better understand how they feel about a product’s features, or about the experience they had during their hotel stay, for example, are two possible uses of a survey. Surveys consist of a list of questions that can be shared with an individual by phone, in person, on a card or paper, or online using a survey software.
Focus groups. Bringing together groups of people with a common characteristic, such as age, hobby, or buying habits, to better understanding their likes and dislikes is a focus group. Focus groups typically consist of 8-12 people with a moderator who poses questions for the group to discuss. They are a useful way of getting feedback on a new product, new features, or new ad campaign.
Observation. When the researcher gathers information simply by watching how a subject interacts with a product, the technique is observation. This is often used in comparing preferences for several types of products.
In-depth interviews. Another market research technique is the one-on-one interview with an individual, during which probing questions are posed to better understand that person’s product preferences.
Sources of Secondary Data
When conducting market research to better understand industry trends and broader shifts, secondary research is often a good place to start. Some of the most useful sources include:

Industry associations and trade groups – most associations publish annual outlooks
Trade journals specific to your industry
Government reports – such as the Census or annual federal procurement results
Industry analysts – these individuals monitor the performance of public companies in your space
University faculty members – see what research reports they may have published
Websites – while Wikipedia isn’t a reliable source, there may be others that lead you to reputable sources and reports
Competitor websites and materials – to convince potential customers to buy from them, they may share useful statistics and reports
The purpose of market research is to provide information that will assist you in making better decisions, to help your company be more successful.

How Millennials and Gen-Z are transforming Qualitative Research
In today’s time, millennials and Gen Z can be seen as the leaders of the digital age. Their product choices and shopping preferences have an enormous impact on the brands. As they have become more potential customers for brands now, it is important to understand their behaviors, lifestyle, shopping patterns and habits for market researchers. Companies need to evolve their market research strategies to analyze and understand these new generations.

Unlike Baby Boomers, Millennials and Gen Z grew up with the latest technology. These new generations don’t know a world without internet, smartphones, and laptops. Be it entertainment or shopping, they like to use their smartphones for all types of activities all day long. They make their buying decisions after reading reviews or watching videos of the product.

For millennials and Gen Z, market research needs to utilize innovative methodologies such as mobile market research, social media research and other advanced qualitative research techniques to gain a better understanding of the attitude and behaviors of both Gen Z and Millennials.

What Should I Include in a Go-To-Market Strategy?

One of the most common errors I see startups make is they fail to get the fundamentals right (or they never revisit them).

At this stage, you should have:

Interviewed potential customers to understand the problems they have and the solutions they need.

Validated your business, ideally by pre-selling your product.

Received feedback from customers. This includes understanding the messaging and their willingness to pay for your product.

Mapped your pricing strategy.

Created a customer persona for who you believe has the highest pain and highest willingness to pay for your solution.

Detailed information on who your competitors are and where your growth opportunities are.

A position strategy to become the leader and dominate your market.

Here is what you should include in your go-to-market strategy:

A listed of all possible acquisition channels, and what success looks like in each.

A score of each channel based on the impact, confidence, and ease of success. After scoring each channel, you will prioritize them from highest to lowest.

An idea of what it takes to get success in each channel.

How much money and time you will invest in each channel.

Who will do what tasks, and the deadlines for the project.

Here’s how to create a go-to-market strategy, step-by-step.

What Are the Steps to Develop a Go-To Market Strategy?

An efficient go-to-market strategy should answer the following questions:

1. Who is the customer persona you are attempting to reach first?

There’s a temptation to take every customer you can get when starting out.

But not every type customer receives the same value for your solution. And some customers will hijack your product and do more harm than good.

Justin.tv was built for people to livestream their lives. Within a year, it was used to stream copyrighted content. Needless to say, these were not the right customers.

Start by focusing on the one customer type you believe will receive the most value from your solution.

The exception is if you are a two (or more) sided marketplace. In which case, you should choose only one customer persona for each side of the market.

It’s likely the hypothesis of who your best customer persona actually is will change as you grow. That’s a natural part of the process for early-stage startups.

Podia began by targeting coaches. Once Spencer Fry reached 100 customers, he learned his best customers were content creators, not coaches.

Justin.tv later discovered their best customers were video game players.

Yes, you may “lose out” by missing your target customer in the beginning. But focusing on one customer will help you from changing your positioning, marketing strategy, and product roadmap with each new persona you come across.

2. What customers acquisition channels are best for my startup?

After picking who you will target, you will want to decide what acquisition channel will most likely produce the highest ROI.

The best channel will depend on:

What channels your customers use, which is why you picked your customer persona.

Your team’s skills.

The amount of money you want to invest.

To start, you should consider each channel. What would success look like?

Once you have each channel mapped out, you will want to prioritize which channel you believe to be the most effective.

To prioritize your channels, score each channel from 1 to 5 in these three areas:

Impact: How many customers will you get if this test is successful?

Confidence: How confident are you this test will be successful?

Ease: How much time and money do you need for this test to be successful? Do note that a “5” means it takes less money and time.

This prioritization is known as the “ICE” framework.

Once you’ve given a score, add up the numbers and rank your channels. In the event of a tie, prioritize the test with the highest Ease score. It’s better to attempt more tests because you don’t know if a test will be a success and by how much until complete.

While there are several growth channels available, the majority of channels fall into one of these 12 categories:

1. Virality and network effects.

Virality isn’t just when your cat video hits the front page of Reddit or Youtube. It’s about optimizing the time it takes a customer to invite or refer more friends to your product. This is called a viral loop.

Viral loops are most common in network effect products like Facebook and LinkedIn, which increases in value with each new user. Unfortunately, it’s also hard to create viral loops and network effects.

2. Search engine optimization (SEO).

SEO is the process of improving the ranking of your content for keyword phrases your customers search for using search engines.

The three largest search engines people focus on are Google, Youtube, and Amazon. Although there are similar principles when using each platform, there are different distinctions for finding success.

People love SEO because once you have a successful fly-wheel, it often requires very little time or money to keep getting ongoing results. Something you write 5 years ago can still give you new customers, while after you spend money on ads, that’s all you get. SEO also allows you to educate your audience to become better customers.

That said, it is challenging and often time-consuming to get the SEO fly-wheel spinning. If you do SEO right, you should see organic traffic in 2-4 weeks. But it often takes 6-12 months before you get enough traffic that converts.

It’s also worth noting that SEO requires content marketing to work. But content marketing does not necessarily use SEO.

3. Paid advertisements.

Paid advertising is one of the largest traction channels with companies paying millions of dollars every year.

Paid advertising includes search ads, social media ads, banner/display ads, and native ads. If you branch into offline channels, this includes billboards, (satellite) radio ads, TV ads, print ads, and mailers.

While advertising is easy to pay-to-play, it often costs a lot of money to do it successfully. How much money?

For simple math, let’s say a click costs you $2. If 2% of those who click your ad become a customer, it will cost you $100 per customer ($2 X .02 = $100). And this does not account for the money you’ll invest getting better customer data either. That alone can cost $3,000-$15,000, depending on how accurate your customer persona is.

4. Sales.

Sometimes you need to hand-hold a potential customer to make money, which is often done through sales. The sales process includes generating leads, qualifying them, and turning them into customers.

As a go-to-market strategy, sales is one of the fastest paths to getting new customers. And it’s not uncommon for startups to use sales in addition to another acquisition channel.

Sales often requires you to sell high-ticket products so your profit margin works out. Usually the average value of the product should be no less than $3,000 a year. Here’s the math:

Let’s say you pay a salesman or woman $80,000-$100,000 a year after bonuses. With a 3:1 lifetime value (LTV) to cost of acquiring a customer (CAC), that means you need $240,000 to $300,000 in sales a year. At 100 sales a year, that’s about $3,000 in annual contract value (ACV). Or $299/month for a monthly subscription when you account for churn.

You may find it best to start by doing sales first, then switch to another acquisition channel once you hire someone else.

5. Business development and partnerships.

Business development is focused on exchanging value through partnerships. This includes influencer marketing, affiliate marketing, and integrating your product with other products that promote you to their customers.

Business development is like sales, but focused on a partnership rather than selling directly to your customer.

6. Press.

From traditional press releases, to PR stunts and working with blogs, press can help you get potential customers, improve your social status, and increase awareness.

What gets a reporter’s attention? Here are four of the most common opportunities for startups:

Milestones like raising money, launching a new product, or breaking a usage barrier.

Giving original data or a special industry report.

A PR stunt.

A big partnership.

This means you need to provide their readers with:

Social currency for looking smart, cool, or in-the-know.

A trigger to think of your idea often.

A high arousal emotion.

Something publically visible.

Something with practical value.

A compelling story.

The more you can combine together, the more attractive your story. For example, if you do a PR stunt which helps you get your first 10,000 customers, this becomes a new attractive story. Add some original data where those 10,000 customers came from and you have a more powerful story to share.

If you want new customers through press, you will usually do better with relevant niche publications than large publications.

To scale press, most pair it with SEO and occasionally with ads. You can also keep creating more press-worthy stories.

7. Engineering as marketing.

Do you have a team of engineers? You can leverage their skills by building tools and resources that reach your customers.

Some common tools include calculators, WordPress plugins, and educational microsites. You can then collect leads through these tools and get people to buy your product. Sometimes a side project becomes successful enough to be a main product.

Engineering as marketing is often a major competitive advantage because you’re giving something free that your competitors might charge for. That said, this approach requires you to market the new tool too.

8. Social media.

There’s never been a product that serves everyone. But social media giants like Facebook, YouTube, and Instagram are as close as you can to reaching everyone. Even smaller sites like Reddit can help you reach thousands (if not millions) of customers with a single post.

Many social media sites have a low organic reach until you’ve built a larger brand. This is why most startups focus on paid ads and community marketing. But don’t overlook the connections you already have on those sites.

Keep in mind that while it would be great to “go viral,” the odds are stacked against you. You have a much better shot of creating constant wins, or using platforms that scale through SEO.

9. Community marketing.

Community building involves investing in direct connections with your customers and potential customers. Developing deeper customer relationships can result in increased activation, retention, and referrals.

But if you don’t have customers, you can become a prominent member of another community. Forums, Facebook groups, and Reddit communities (called subreddits) are some of the fastest ways to build relationships in your industry.

Building your own community is difficult, but the rewards can be massive. Reddit, Wikipedia, and Stack Exchange is largely built on the community they’ve created. This is also one of the few ways to scale community marketing.

10. Email marketing.

Email marketing is often declared to have the highest ROI. Not only can you use it to find new customers, you can also use it to engage (activation), retain, upsell (revenue), and generate referrals.

Because messages from your company are right beside updates from friends and family, email often feels very personal. When done wrong, email will also make people feel angry, damage your brand, and decrease future email deliverability rates.

Keep in mind it’s also difficult to get a large enough email list to acquire customers. By itself, email marketing cannot grow unless you have some mechanism for others to share and join your newsletter.

But it is possible to start just by emailing a few interested friends. Newsletters like The Hustle, Startup Digest, and Product Hunt all began as emails sent to friends, which now have thousands of customers.

Email marketing is also easier to automate. Many email marketing tools like MailChimp, ConvertKit, and Active Campaign allow you to build automation email sequences.

Typically email marketing is paired with SEO or content marketing to build a list.

11. Trade shows and offline events.

Almost every industry has numerous trade shows and events. And since everything is in-person, you have a rare opportunity to meet journalists, industry influencers and bloggers, customers, vendors, competitors, and partners in one place.

Simply setting up a booth will get you some results. But to get the maximum leverage, you need to be proactive. Set up meetings in advance, host networking dinners, and determine your strategy to get people to come to your booth.

Becoming an event speaker is also an excellent opportunity to generate new customers. Not only will this increase your brand, select people are paid to speak. And if you want to go all-in on this channel, you can host your own event.

Trade shows mix well with sales as you can generate leads, qualify, demo your product, and close customers all in one trip.

12. Content marketing.

When was the last time you read an article online? How about the last time you heard a podcast? Or perhaps watched a video?

Content marketing is everywhere. From articles like the one you’re reading to infographics, videos, and podcasts, content marketing spans a wide range of the acquisition channels.

When done right, content can help you educate the market, build an email list of exciting prospects, land publicity, build relationships, and much more. It’s also one of the best ways to increase your brand. Popular venture capitalists like Mark Suster, Paul Graham, and James Currier are so well-known because of their blogs.

Unfortunately, content marketing often requires knowledge of another channel to become successful. As such, it’s often slower than other acquisition channels.

SEO and social media tend to be the two most common ways of getting traffic to your content. Email marketing is also common to get people to become repeat visitors to your content. But you can also create a paid content funnel using ads, an article, and premium content to get an email address.