The success of your digital product or enterprise business idea relies on the type and quality of research you do before building anything.
The more you know about the market and the needs of your potential customer, the more you’ll know whether your new digital product or enterprise business idea will ultimately succeed. And you can do both types of research quickly and simultaneously to gain the confidence you need.
Let’s look more closely at market and customer research, how they form the foundations of learning around a new product, venture, or idea, and how those learnings lead to better decisions during development.
How Market Research Sets Expectations
Market research helps you understand the viability of the product or idea. This answers a lot of the business questions, helping you narrow or broaden your vision for a new product or idea.
This research is critical for building a financial model and understanding the scale of the opportunity and the dynamics of how you might go after it. It also sets expectations and addresses whether you have a sense of what is happening in the market and what is realistic.
Some of the most important questions to ask when conducting your market research include:
How large is the addressable market?
- Who are the current competitors?
- What kind of pricing and price points are common in this market?
- Where is the strategic opportunity?
- How might you reach customers and gain market share?
- What will you be asking people to stop using in order to use your product or idea?
At this point you may find you were overly optimistic in estimating the size of your market. It’s important that you focus your research on a reasonable, addressable market. If you’re thinking it’s 200 million users and everybody is a potential customer, then nobody truly is. A potential market that is too broad prevents your digital product from providing the right solution to the right people at the right time.
Accurate and actionable market research is nuanced. It clearly outlines the opportunity and defines constraints. It should educate you from a business perspective. Sometimes that means taking zeros off the big numbers.
When you really know your addressable market, your customer research allows you to discover what kind of people are in that market. So let’s talk about how we learn more about them.
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Using Customer Research to Discover User Behavior
Customer research helps you understand the desirability of your product or idea. It’s essential for establishing the customer need or problem, as well as the potential fit of the value proposition of your product or idea.
The aim is to answer user questions and identify how these users might behave when interacting with your product. Keep the group of possible users to 8 to 10 of the same type of person. Any more than that, and you’ll begin to hear the same things being repeated.
Here are some questions to ask when conducting customer research:
- Is the proposed product or idea attractive to users?
- Does it solve or address a real unmet need in their lives or jobs they are interested in fulfilling?
- Do they perceive it as different, useful, and desirable?
- Does this product or idea fit into the context of their current behavior?
Give them a paper prototype or a wireframe to interact with. There’s hardly anything more telling, powerful, and illuminating than putting something that looks somewhat real in front of a potential user and getting their response to it.
A prototype forces you to make choices around what your product actually does. And customer research at this stage fills the massive gap that exists between attitudes and behaviors. These low-risk, low-cost experiments reveal invaluable information.
Research at the Outset Provides Clarity Throughout Development
The key to successful digital product development is conducting both types of research early in the process — and it doesn’t take a lot of time to do so.
When done at its best, this work lets you build an MVP as quickly as possible. You can identify a specific person who would really be your customer. It lays out a distinct path for a pilot program or a beta version of your digital product and clarifies your focus, paying for itself in the work you don’t have to do down the road.
Highland’s research and design sprint process, combined with rapid market research, rapid customer research, and early concept prototyping, can give you confidence in both the business case and customer case in a matter of weeks.
If you’d like to discuss your idea for a digital product and hear how Highland can get you started on the research portion, we’d love to hear from you.
