What You Should Know About Secondary Market Research

I know that the phrase “market research” can make you feel overwhelmed. But understanding what it is and why you need it can help relieve the tension. While market research can be daunting, it can provide a lot of benefits, too. It takes the guesswork out of marketing and gives you data that you can use to take your marketing strategy to the next level. So, why conduct market research in general? The answers are the following:

To identify your potential customers

See who is going to use your product or service. Understand the demographics of your potential customers, their interests, values, and needs.

To understand your existing customers or buyers

See why your customers choose you over your competitors. What makes your product or service stand out. Who or what influences what they buy.

To understand the competition in the market

Get to know your competitors. Understand their value proposition and see how they attract new customers/users.

Why is secondary market research important for product and startup guys?

Secondary market research is all about getting data from people who have already done something with customers or talked to your competitors or potential competitors. Sometimes, product and startup guys think that this kind of data is not relevant or is too expensive to acquire. But:

1. Relevance depends on how you can use the secondary research.
2. It is definitely not expensive to search for academic work on Google Scholar.

So, basically, the secondary market research is what you should be starting from. And to sound even more compelling to your potential investors, you might also want to include some of the most relevant data into your business plan. If the business plan looks like a very old-fashioned document to you, then as a startup, you can include a few important numbers and statistics into your pitch deck. I am damn sure your investors will love how you connect the market research data with your product vision and suggest a solution to the existing customer problem.

The two main methods of secondary market research

As the subheading suggests, there are two main methods you can use to conduct a successful secondary market research. The two of these methods are quantitative and qualitative research. They actually define the type of information you are gathering. Let’s take a look at them one by one below.

Quantitative Method

It’s simple, quantitative research gathers numerical data such as data from:

• Surveys
• Potential sales reports
• Online or phone questionnaires
• Financial trends

This data should help you understand how big the market is, what’s its valuation, whether there are any predictions about the potential growth of the market etc.

Quantitative research data can also help you get insights into the demographics of customers, such as their age, gender, and location.

Quantitative research provides you with a lot of statistics. But don’t be carried away by the numbers. Consider all of the information you have. Rely more on the average numbers, for example, the average price not the highest one the potential customer would agree to pay.

Qualitative Method

Unlike quantitative, qualitative research gathers views and attitudes. It includes the following:

• Focus groups with customers and potential customers.
• Structures and non-structured conversations with customers.
• Observation and reviews of competitors.

Qualitative research data provides insights regarding the feelings and the attitude of your customers or potential customers about the product or service you are offering. It also helps measure the level of satisfaction with your business on the part of your existing customers. In other words, qualitative research provides helps you gather people’s feelings regarding your product/service and improve the latter accordingly.

Final word

Your secondary market research data or roughly any kind of market research data is paramount. Why? Because not only you but also potential investors, business executives are going to need it. These are not the risky type! They want data to back up bright ideas. So, it’s natural to be asked to provide numbers, statistics, and customer attitude research to these people and ventures. The more convincing your data is, the higher your chances of getting an investment will be!

During my early stages of product management, I used to not pay a lot of attention to secondary market research. As a complete newbie, I was naive enough to give more weight to my own intuition and gut feeling. But the thing is that intuition can be a good base for good assumptions. But it is never enough to come up with a winning product. The data-driven approach has proven to be the best for me so far.

So, what’s your opinion on this? I am looking forward to reading a few really insightful comments from my peer product guys.

This story is published in Noteworthy, where 10,000+ readers come every day to learn about the people & ideas shaping the products we love.

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