MaRS Library How to conduct market research on target customers: Techniques for startups
Researching a market? Our free online course Introduction to Market Sizing offers a practical 30-minute primer on market research and calculating market size.
If you have not researched what your target customers want, you will be unable to craft an effective marketing message, which means potential customers will look elsewhere for solutions to their problems.
Understand your startup’s target customers: Know how to conduct market research and apply what you learn
To understand your target customers, your startup must obtain particular data on your market and then apply this knowledge toward developing a customer base.
1. Know how to conduct market research that is relevant for startups
The particular type of market research that is relevant for startups is not the typical market research that involves focus groups and surveys. (That type of market research will serve your business well in later stages of company development when you need to identify how you fare against the competition.)
In the early stages, startups need to employ two methodologies to learn about their target customers and their needs. These include:
The market feedback your startup receives via these routes will inform your choices and decisions about target markets, specific functionalities of your product, and how you talk about your product with your target customers (i.e., marketing channels and messages).
The insights and information you should try to glean from these activities include:
- Where target customers would search for information when trying to solve their problem, and whom they would ask for advice
- The kinds of search phrases target customers would use if searching online
- Where they would buy this kind of product
- What the most important criteria in the buying decision would be
- Whether customers are aware of any offerings in your space—and if they are, whether they have used them and what they think of them
2. Apply what your startup learns
Knowing how to conduct market research is not enough. Use the insights you gain to adapt your startup’s assumptions about your strategy, target customer, product, and marketing communications. Develop a buyer persona for each target market. This will help your team focus their marketing and sales efforts.
Conduct small-scale tests (without spending too much time or money) to determine which of your marketing strategies work and which do not. Analyze the responses your various campaigns receive from both your new and your existing customers.
If the data shows what you’re doing is not effective, don’t be afraid to change your marketing strategy. It’s good to have information, but it’s more important to act on it.
Startups and understanding target customers: Further resources
- Sales and customer behaviour: Mapping buyer response modes
- Marketing communications for new technology and products
- Marketing communications (workbook)
- The purpose of marketing analytics: Optimize your startup marketing
Understanding target customers and stages of startup development
The Startup Genome model defines five stages of venture development:
This article relates to startups in the discovery and validation stages.
Blank, S. & Dorf, B. (2012, June 19). How a Lean Startup Can Keep Customers. Entrepreneur. Retrieved from http://www.entrepreneur.com/article/223826
Blank, S. & Dorf, B. (2012, June 13). Startup Owner’s Manual: How to ‘Get’ Customers. Entrepreneur. Retrieved from http://www.entrepreneur.com/article/223770
Stansell, K. (n.d.) Two Weeks to Startup: Day 7. Develop a Marketing Plan. Entrepreneur. Retrieved from http://www.entrepreneur.com/article/218148
- Value proposition and Blank’s customer discovery method—Phase 2: Test your hypotheses.
- Focus groups for your product: Grasp customer needs and insights.
- Gross margin (definition).
- Startups and sales promotions: What to know in your efforts to boost sales.
- PR for Startups: Bringing your story to life.