From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.
Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples.
A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.
In this article, you’ll learn how to conduct quick, effective market research using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.
We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf, a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.
From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.
The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.
A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile.
How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.
How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:
Pitfalls to avoid:
How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.
One of the five survey questions Smallpdf asked their usersNext, they used the survey results to create simple user personas like this one for admins:
💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words.
You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email.
We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.
Observational research involves taking notes while watching someone use your product (or a similar product).
Overt vs. covert observation
Tips to do it right:
Pitfalls to avoid:
💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website.
Observe how customers navigate your pages and products to gain an inside look into their user behavior. This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion.
With Hotjar Recordings you can observe real people using your site without capturing their sensitive information
How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.
“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”Principle Product Manager at Smallpdf
Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.
Tips to do it right:
Pitfalls to avoid:
How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.
A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.
💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage, which automates the entire interview process, from recruitment and scheduling to hosting and recording.
You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.
The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.
A flow model is a diagram that tracks 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 assess their needs.
Example of a flow model designed by SmallpdfYou’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.
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 about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.
We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).
“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”Principle Product Manager at Smallpdf
Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.
Hotjar lets you easily share survey responses with your team
A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).
A customer journey map exampleThe above customer journey map, created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.
📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.
So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.
Smallpdf used lean market research to dig below the surface, understand their clients, and build a better product and user experience
Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.
We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake.
In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.
According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.
Smallpdf’s changes produced:
"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”Principle Product Manager at Smallpdf
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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.
David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.
With Hotjar, they did things differently. Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.
Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.
Here’s why research matters:
Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.
Lean market research can help you become more.
As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.
There are lots of different ways you could 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.
Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.
Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research, surveys proved to be the most commonly used market research technique.
What makes online surveys so popular?
They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.
We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.
💡Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds. Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions.
Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.
An example research report generated by Hotjar AI for Surveys
Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.
Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.
What makes interviews so insightful?
By speaking directly with an ideal customer, you’ll gain greater empathy for their experience, and you can follow insightful threads that can produce plenty of 'Aha!' moments.
Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, or marketing message to gain deeper insights.
What makes focus groups so unreliable?
If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive, and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.
During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).
What makes observation so clever and powerful?
‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.
The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.
How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).
It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.
This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.
This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.
This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.
This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute. It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.
If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.
“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”
—Adele Revella, Founder/CEO at Buyer Persona Institute
This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.
That’s why Sarah Doody, author of UX Notebook, adds it to the end of her written surveys.
“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”
