“Product/market fit myth: Myth #1: Product market fit is always a discrete event and a big bang; Myth #2: It’s very clear when you have a suitable product/market; Myth #3: Once you reach product/market fit, you can’t lose it; and Myth #4: Once you have the right product/market, you don’t have to worry about competition.”
– Ben Horowitz
Companies find product/market fit (PMF) when a product creates value that directly meets unmet customer needs. You know it when you see it: demand quickly outstrips supply, and a $0 word-of-mouth marketing campaign quickly becomes the only necessary acquisition channel. This is the holy grail for entrepreneurs and a key obstacle that stands between a capable management team and explosive growth. Of course, finding a PMF is not easy, and it is not a one-time occurrence. Once discovered, this is a process of constant adaptation based on extensive market knowledge and a keen eye on competition.
Most companies conduct market research, albeit informally; For example, by making customer satisfaction calls or checking the prices that competitors charge for similar products and services. Formalizing the market research process is critical to staying focused on target customers (i.e., keeping the company’s ideal buyer type up to date), uncovering unmet customer needs, keeping abreast of market conditions, and staying ahead of competitors.
Finding top market research analysts for full or part-time positions is not an easy task. The ability to assess market research skills comes with a wealth of experience in the field. This guide aims to help you acquire those talents effectively.
Why hire a market research expert?
Below are some of the most common reasons to hire a market analyst.
Understand the place of your business in the market and the relationship with your competitors.
Even short-term engagements with market research experts can provide valuable insights if you want to better understand your customer base, your competitors, and the market segmentation of the space in which you operate.
The following is an exercise to find key market research questions that will provide the best information about your business in the shortest possible time.
Q: A company hires you for a two-week evaluation of your business with respect to your competitors in the market. What kind of questions can you answer in this time frame that will have the greatest impact on business outcomes?
During short engagements, and depending on the available resources, market research analysts should focus on the following questions:
- Who are your customers and what is the best way to reach them? A qualified market researcher can build customer profiles, evaluate potential business locations or distribution channels, and propose marketing strategies.
- What products and services do buyers need or want?
- What factors influence your customers’ purchasing decisions? Among factors such as price, comfort, brand, among others, which factor weighs the most? What factors are not very important?
- What prices should you set for your products and services, based on competitive prices?
- Who are your business competitors? How do they operate and what are their strengths and weaknesses?
If you think your expert needs to do some key research, be sure to consider the time it takes to reach customers. Key research can include surveys, focus groups, customer interviews, and trials or field experiments. Secondary research, in which experts leverage existing sources to gain market insights, is much more general and more predictable from a time point of view. Secondary research sources include economic forecasting, census data, and even Twitter.
Research new markets to inform your go-to-market strategy.
Market research consultants can provide tremendous value when a company is exploring new markets and products. Small costs can now save millions of future research and development, marketing, and sales costs if a new product is approved when the product/market does not yet exist. To test a candidate’s ability to research the market for a new product, give them questions such as the following:
Q: A company is exploring the development of a new product line to complement its traditional product line. You are tasked with conducting research that will ultimately be used to inform product development and go-to-market strategies. How will you structure your research efforts to provide the most important information needed to make this decision?
An expert market researcher will begin by identifying the core competencies of this retail business, discovering existing unfair advantages, and exploring new markets based on that information. The research framework might look like this:
Understand the current market of the company.
- What is the market in which the company currently operates?
- What happens in the market? What are the industry trends?
- Here, experts can leverage data sources such as Pitchbook, CB Insights, or annual reports.
- Who are the other players?
- Here, experts can take advantage of competitors’ personal knowledge of the experience or, again, use secondary data sources.
- Platforms like LinkedIn and Twitter can provide useful qualitative information about competitors. Trends such as follower growth or posting frequency can explain the state of your current sales trend.
Identify the competitive advantages of the company.
- What is the expertise of this company? What products do they have that work well?
- What unique resources and advantages does the company have?
Create market maps to enhance key market opportunities.
- What does a market map look like (a visual representation of all industry verticals, with competitors divided by competitive strength)?
- Are there any gaps or opportunities for expansion within the market?
- How can a company’s competitive advantage fill this gap?
Once an opportunity is identified, test the hypothesis of the opportunity: is there a demand for the product?
- At this stage, market research analysts can turn to primary research. They will directly ask selected customers for their opinions on new products and services.
- An expert market researcher will be careful to avoid confirmation bias at this stage. Outside freelancers are very helpful here, as they are not incentivized to push survey participants in one direction.
Understand how your customers think.
When conducting primary research, companies need to be aware of their customers’ time. As important as this information is to help companies make informed decisions, maintaining healthy customer relationships should also be a priority for retention goals and as an overall best practice. Before reaching out to customers, an expert market research analyst will know exactly what questions need to be asked and will know what is the best approach to doing so.
Q: After a company has lost market share to its competitors for two quarters, you want to investigate how the recent bad press has affected its brand image. What approach can you take to determine the impact?
This type of information can be collected through key research techniques, including customer interviews and customer surveys. In this case, polls may be one of the best techniques for assessing changes in public opinion. There are a number of approaches to conducting a survey, each with specific pros and cons:
By direct mail (that is, delivery to the workplace or delivery by returned survey in person or by mail)
- Pros: Cost-effective; Highly scalable
- Cons: Questionable effectiveness; Required follow-up reminders
By phone
- Pros: Cost Effective
- Cons: It may be difficult to reach participants, little appetite in public for phone interruptions; Not so scalable
On the web or by email
- Pros: Allows participants to complete surveys on their own time with little effort, cost-effective; Highly scalable
- Disadvantages: Low response rate
In person (for example, a face-to-face or focus group interview)
- Pros: You can enter follow-up questions or change the focus of the survey on the spot. In the context of the “mystery shopper”, this can allow for a more honest and honest judgment.
- Cons: May be difficult to recruit participants, expensive
Skills to consider
Soft skill
As important as these hard skills are, a market research analyst should be a clear communicator with expert critical thinking skills, able to synthesize their research findings into easily digestible reports and focus their attention on what is important. To conduct primary research, a market research expert must feel comfortable talking to everyone who touches the organization, from executives to suppliers.
Hard skills
Qualified market research associates will have proficiency in the entire MS Office suite (Excel, Word, PowerPoint) and statistical analysis programs. As an added bonus, a senior analyst may have proficiency in computer science and programming skills such as SQL, R, and Python to really dig deeper into data analysis. Sources at hand, market research analysts will analyze the data using techniques such as conjoint analysis, maximum difference scale, and multivariate analysis.
Ensure successful engagement
Once you’ve found the ideal candidate, be sure to spend the right amount of time on expert orientation to increase the chances of a positive experience and successful engagement.
Here are some suggestions on how to make this transition go smoothly:
- Set realistic expectations.
Instead of asking experts to explore all possible markets your company can enter in the next five years, limit the breadth of questions by market type (for example, only markets related to the core operations of the current business) and time horizon (twelve months ahead). Or, ask very ambitious questions, but understand that the analysis will certainly be at a higher level. You need to understand an expert’s core areas of expertise to make sure they fit the type of analysis you have in mind. If you decide to hire through Toptal, the interview phase is a good time to determine this.
- Make sure market research experts have access and resources.
Explain to those within your organization that they should support the work of market research experts as best they can, where it makes sense. Experts can request a meeting with your company’s decision-makers to understand core business challenges or ask a customer database to send surveys. These customer-facing activities should be carried out in coordination with your company’s sales team or account management to avoid miscommunication.
- Determine the milestones of history immediately.
A senior market research analyst should provide you with a roadmap for the first few weeks of the task. If not, just ask! A clear roadmap helps ensure you start with the same expectations about results, expected results, and timing.
Conclusion
“The market is the most important thing.”
– Marc Andreessen
Successful companies use information and market intelligence, not intuition, to drive their daily decision-making and key business decisions. Expert market research helps reduce risk in business decisions by allowing executives to better understand how customers perceive their products and services, and how customers compare their business to competitors. Market research can play a role in forecasting inventory changes and price changes, as well as exploring new products and markets, all of which translate directly into the bottom line.