A Complete Guide to Market Research: 4 Best Practices | Hotjar's blog (2023)

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David Darmanin, one of Hotjar's founders, founded two startups before Hotjar took off - but both companies collapsed and burned. Each time, he and his team spent months creating an amazing new product and user experience, but failed because they didn't know exactly what the market demanded.

What is market research?

Market research (or marketing research) is a set of techniques used to gather information and better understand a company's target market. Businesses use this information to build better products, improve user experience, and create a marketing strategy that attracts quality leads and improves conversion rates.

Why is market research so valuable?

Without research, it's impossible to understand your users. Sure, you might have a rough idea of ​​who they are and what they need, but you'll have to dig deep if you're going to earn their loyalty.

Here's why research matters...

• Obsessing over your users is the only way to win🇧🇷 If you don't take great care of yourself, you will lose potential customers to someone who does.

• Analysis provides the "what", but research provides the "why".big data,user rating, and bodies can reportdiePeople do it on a large scale, but only research can tell what they think andAndThey do what they do. For example, analytics might say that customers leave when they land on your pricing page, but only research can explain why.

• The research goes beyond assumptions, prejudices and so-called best practices.

  Have you ever seen your peers support a terrible decision? Bad ideas are often the result of guesswork, emotional thinking,Death by Best Practices, and unifying the opinion of the highest paid person (HiPPO). By listening to its users andFocus on customer experienceYou're less likely to be pulled in the wrong direction.

• Research prevents you from planning in a vacuum.

  Your team may be great, but you and your colleagues just can't experience your product the way your customers can. Customers may use your product in ways that surprise them, and features that seem obvious to you may confuse them. Overplanning and refusing to test your assumptions is a waste of time, money, and effort as you will likely need to make changes once your untested plan is implemented.

Benefits of Lean Market Research

Lean User Experience (UX)-DesignIt's a continuous improvement model based on fast and efficient research to understand customer needs and test new features.

Lean market research can help you more...

• Efficient: Brings you closer to your customers faster.

• cost-benefit: You don't need to hire an expensive marketing company to get started.

• Competitive: Fast, meaningful insights can propel your products to the top.

4 common market research methods

There are many different ways to conduct market research and collect customer data, but you don't have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

The method you use may vary depending on the nature of your business: Ecommerce store owners have different goals than SaaS companies, so it's usually advisable to consider these methods based on your specific goals and what you need to know , to combine.

1. Polls: the most used

Surveys are a form of qualitative research in which respondents are asked a short series of open-ended or closed-ended questions that can be submitted as an on-screen questionnaire or via email. if we ask2,000 customer experience (CX) professionals on their company's research approachSurveys have proven to be the most widely used market research method.

What makes online surveys so popular?They're easy and cheap to do, and you can collect a lot of data quickly. In addition, the data is very easy to analyze even if it is necessaryanalyze open questionswhose answers initially seem difficult to classify.

We have created several survey templates waiting for you.Grab a template and share it with your clients in just a few clicks.

2. Interviews: the most insightful

Interviews are one-on-one meetings with members of your target market. Nothing beats an in-person interview to dive deep (and read nonverbal cues), but when meeting in person isn't an option, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview brings great benefits when it comes to understanding your target customers.

What Makes Interviews So Insightful?

By speaking directly to an ideal customer, you get moreempathy for your experience, and you can follow insightful topics that can generate many eye-opening moments. moments.

3. Focus groups: the most dangerous

Focus groups bring together a carefully selected group of people who fit a company's target market. A trained moderator leads a conversation about the product, user experience and/or marketing message to gain deeper insights.

What makes focus groups so dangerous?

If you're new to market research, I wouldn't recommend starting with focus groups. Getting it right is expensive, and cutting corners can make your research fall victim to all sorts of mistakes. Dominance bias (when a strong participant influences the group) and moderator style bias (when different moderator personalities produce different outcomes in the same study) are two of the many ways that focus group data can be skewed.

4th hint: the strongest

During a customer observation session, someone at the company takes notes while observing how an ideal user interacts with your product (or a competitor's similar product).

What makes observation so intelligent and powerful?

Fly-on-the-wall observation is a great alternative to focus groups. Not only is it cheaper, but you'll see people interacting with your product in a natural setting without affecting each other. The only downside is that you can't get inside their heads, so observing doesn't replace customer surveys and interviews.

How to do market research (lean)

The following four steps will give you a solid understanding of who your users are and what they expect from a company like yours.

1. Create simple user personas

ONEuser personalityis a semi-fictional character based onpsychographicand demographic information about people who use websites and products similar to yours.

How to get the data:Use on-page or email surveys and interviews to understand your users.

How to do it right:Whatever survey/interview questions you ask, you should answer the following customer questions:

• Who are you?

• What is your main goal?

• What is the main obstacle to achieving this goal?

Pitfalls to avoid:

• Don't ask too many questions!

  Keep it to five or less (preferably three) or you will overwhelm them and they will become unresponsive.

• Don't worry too much about typical demographics

  such as age or history. Instead, focus on the role these people play (in relation to your product) and their goals.

How Smallpdf did it:small pdfpolled the site for a week or two and got 1,000 responses showing that many of the users were administrative assistants, students and teachers. Then they created simple user personas like this for admins:

• Who are you?

  administrative assistants.

• What is your main goal?

  Creating Word documents from a scanned paper document or a PDF where the source file has been lost.

• What is the main obstacle to achieving it?

  Convert a scanned PDF document to a Word file.

2. Conduct observational research

Observational research involves taking notes while someone else is using your product (or a similar product).

open observation vs. covert

• Includes open observationask customersif they let you watch

  Use your product. (Smallpdf did this with administrative assistants.)

• Covert observation means studying users "in the wild" without them knowing.

  This only works if you're selling some type of product that people use regularly, but it provides the purest observational data because people often behave differently when they know they're being observed. (Smallpdf did this with college students.)

Tips for the right approach:

• Make a note of an entry in your field notes along with a timestamp, each time an event occurs.

Sample field notes from Smallpdf

• Write down your workflowCapturing the "what", "why" and "for whom" of each action.

to avoid pitfalls:

• Do not record video or audio, regardless of its method (open or hidden). When they know you're recording, they get nervous. What if they don't know? It's just scary.

• don't forget to explainAndYou want to watch them (for open observation).

  You're more likely to cooperate if you say you want to improve the product.

How Smallpdf did it:See how Smallpdf looked at two different user personalities.

• Observe students:

  Kristina Wagner, interaction designer at Smallpdf, went to coffee shops and libraries at two local universities and waited until she saw students conducting PDF-related activities. So she watched and took notes from afar.

  One thing she noticed was the difference between the way students reported their activities and how they behaved (ie, self-report bias). She found that students spent hours talking, listening to music, or just staring at a blank screen instead of working. When she found students working, she recorded the task they did and the software they used (if she recognized them).

• Observation of administrative assistants:

Kristina emailed administrators stating that she would like to observe them at work and asked those who agreed to try compiling the work in PDF format for the observation day. As she observed administrators at work, she learned that they often needed to scan documents into PDF format and then convert those PDFs into Word documents. By observing the challenges administrators face, Smallpdf knew which products needed improvement.

3. Conduct one-on-one interviews

Interviews are one-on-one meetings with members of your target market. They allow you to dig deeper and explore your concerns, which can lead to all sorts of revelations.

Tips for the right approach:

• Act like a journalist, not like a salesman

  🇧🇷 Instead of trying to talk about your business, ask people about their lives, their needs, their frustrations and how a product like yours can help.

• Listen more, speak less.

  be curious

• Ask why?" to help you delve deeper.

  Go into detail and learn more about their past behavior.

• record the conversation

  So you don't have to take notes and can concentrate on the conversation. There are many services that transcribe recorded conversations for a good price.

to avoid pitfalls:

Don't ask important or loaded questions.

• a main questionreveals bias on their part and pushes them in a certain direction (e.g., "You took advantage of thatunbelievablenew features we just released?).

• a loaded questionan assumption creeps in which, if wrong, would make an honest answer impossible. For example, we can't ask, "What did you find most helpful in this article?" without asking if you found the article useful at all.

• Be careful when asking for opinions about the future (or predictions of future behavior).Studies suggest sothat humans are not very good at predicting their future behavior. This is due to several cognitive biasesmistaken bias of exceptionalism(we're good at guessing what others will do, but somehow we think we're different), to optimism (which makes us see things through rose-colored glasses), to 'illusion of control' (which makes us forget that matter of chance in future events).

How Smallpdf did it:Kristina explored her user-teacher persona by speaking to college professors at a local graduate school. She learned that the school was almost paperless and rarely used PDFs, so she passed it on to administration to save time.

A little disappointing? Clear. But this story highlights an important lesson! Sometimes you follow a lead and miss it, requiring you to make adjustments on the fly. Lean market research is all about getting solid, actionable insights quickly so you can tweak things and see what's working.

4. Analyze the data (without drowning in it)

The following techniques will help you understand the data without getting lost in it. Remember, lean market research is all about finding quick, actionable insights.

flow model

Example of a flow template designed by Smallpdf

A flow model is a diagram that traces the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better understand their needs.

You'll find administrators at the heart of Smallpdf's flow model, which depicts the flow of PDF-related documents throughout the school. This flow model shows the challenges administrators face when working to keep their own internal and external customers happy.

affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users what their job is, you'll find that some common themes emerge, even though individual answers vary. Depending on your needs, you can group them by professions or, more generally, by industries.

We have written a guide on how to do thishow to analyze open-ended questions, and it helps you sort large amounts of data to categorize them. You can also do this manually by clipping and grouping the interview notes (which Kristina does).

Customer-Journey-Karte

A customer journey map is a diagram showing how a typical prospect becomes a paying customer. It describes their first interaction with your brand and each step of the sales cycle from awareness to repeat purchase (and hopefully advocacy).

aboveCustomer-Journey-Karte, created by our team at Hotjar, shows many ways a customer can interact with our tool. Your card is based on your own data and business model.

📚 Continue reading → If you're new to customer journey maps, we've written this step-by-step guide on how to do itCreate your first customer journey mapin 2 1/2 days with free templates you can download and use right away.

5 common market research questions

The following questions will help you to get to know your users better during the survey. These are of course general questions, so don't be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question and what you want to know depends on your business model (e.g., business-to-business marketing is often more self-professional than business-to-consumer marketing).

That's a good question to start with, and it helps you understand what's relevant about your users' demographics (age, race, gender, occupation, education, etc.). The meatier, more specific questions come later.

2. How is your day?

This question will help you understand everyday life and the challenges they face. This will help you develop empathy for them and you may come across something relevant to their buying habits.

3. Have you already purchased [type of product/service]?

This is a "yes or no" question. A "yes" takes you to the next question.

4. What problem did you want to solve or what goal did you want to achieve?

This question sums up what they are trying to achieve and why they might be willing to pay for their solution.

5. Take me back to the day you decided you needed to solve this type of problem or achieve this goal.

That's the golden question, and it comes from Adele Revella, CEO ofPerson Institution of the buyer🇧🇷 It helps you get into the minds of your users and find out what they were thinking the day they decided to spend money to solve a problem.

By taking your time with this question and digging deeper where it makes sense, you can answer all the pertinent information you need to understand their perspective.

What are you trying to cover with this question? Here is a checklist...

✔ Where did you look for a solution?

✔ How long did it take to make the decision and buy?

✔ Who did you consult to make the decision?

✔ What alternative(s) did you consider?

✔ What convinced you to buy it?

✔ What almost stopped you from buying it?

Important: Remember to ask "Why!" 🇧🇷“Why” is the magic word that drives them to delve deeper into their experiences and provide meaningful insights instead of short answers.

Bonus Question: Is there anything else you would like to tell me?

Not only is this question a great way to wrap up, but it might also give them a chance to tell you something you really need to know.

That's why Sarah Doody, author ofNotebook-UX, add it to the end of your written surveys.

Market Research Example: How Smallpdf Converted Your Market Research Study Into Business Results (In 6 Steps)

Smallpdf used lean market research to dig beneath the surface, understand its customers and create a better product and user experience. Here's a summary of the steps they took.

Step 1: Smallpdf used in-page polls to collect data

They asked guiding questions to determine who their users were and what problems they were trying to solve with Smallpdf. The team stopped when they received 1,000 responses.

Step 2: They created simple user personas based on the survey data

Smallpdf found that many of its users were administrative assistants, students, and teachers, so it devised a plan to study these users.

Step 3: They conducted observational surveys with students and administrators

Kristina Wager and Smallpdf, fez...

• student secret observation: watch them at work in university libraries and canteens.

• Open observation of administrative assistants: She contacts them first to ask if she can watch them work and then spend time watching them complete PDF tasks.

In both cases, she wrote down the "what", "why" and "to whom" of each action, which later fed into her flow model.

monitoring: Kristina also spent time interviewing professors at a local graduate school, which would have become her move had she been successful. Unfortunately, the university ran out of paper.

Step 4: Smallpdf has analyzed your data

Kristina used the following research tools to understand the data and explore next steps.

• flow model: Smallpdf has mapped a flow model to understand the challenges admins face when working to keep their own internal and external customers happy.

• affinity diagram: They grouped data points into broad categories on a visual chart to see how specific trends were common in their data.

• Customer-Journey-Karte: You designed a typical customer journey to better understand how users interact with the product.

Step 5: They implemented changes

Based on what Smallpdf learned about the challenges a key segment (administrators) face when trying to convert PDF to Word files, they have improved their PDF to Word conversion tool.

I won't go into detail here because it involves a lot of jargon, but they've made the whole process easier and smoother for users. Also, they made it so that when you drag a PDF file into the Word to PDF converter instead of the PDF to Word converter, the system recognizes it, so users don't have to repeat the task when they do this error. 🇧🇷 In other words, a simple market segmentation for admins revealed a business need that needed to be addressed, and now customers are generally happier.

Step 6: Smallpdf tested the results

According to the Lean UX model, product and UX changes are not held back unless they produce results.

Smallpdf changes generated:

• A 75% reduction in error rate for PDF to Word converter

• A 1% increase in NPS

• Greater confidence in the team's marketing efforts

Have you done your own lean market research? Comment below and let us know how it went - what you learned, what changes you made, and how your users reacted.

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