How Digital Product Managers Can Perform Effective Market Research
Market research is the process of gathering information about your business's buyer personas, target audiences, and customers. Market research also helps to provide a deeper understanding of the varying market factors, such as the nature of the market, the problems of the users, and the value of what you are building.
Researching the market is one of the most important roles of a digital product manager. In order to produce a profitable and effective strategy for your product, research into the demands of your consumers is highly important in ensuring that you are successful as a digital product manager.
But in competitive markets, time is of the essence. Other businesses are constantly looking for a competitive advantage above your own, with new developments arising every second to put the success of your product firmly in jeopardy. This is why effective research is highly important to a business. Here are some techniques for how digital product managers can perform market research successfully.
What Problems Can Market Research Solve?
Market research informs your decisions as a product manager. Here are four categories of decisions product managers use market research for.
Identifying markets
- Identifying market needs and customer problems
- Segmenting markets
- Documenting the customer journey
- Evaluating new markets
Scoping products
- Defining or testing new product concepts
- Solidifying pricing
- Prioritizing features and releases
Investigating the best marketing options
- Creating or testing product messaging
- Measuring marketing programs and campaigns results
Analyzing business success
- Measuring customer satisfaction
- Learning about the competition
How to Get Started
Market research is a method of gaining information on the needs and wants of your market in order to appeal to them in greater or more novel ways. An example of market research is conducting an online search on a particular topic and making note of the most recent data published on that topic to help sell your services to a greater degree.
Market research is important for digital product managers to gain a competitive advantage against other businesses who are developing or launching similar products. By meeting consumer demands more closely than competitors, your business will be at a greater advantage within the market.
Now that the benefits of market research are known, here are the five steps you can take to research your market effectively as a digital product manager.
Define The Problem
In most cases, the problems that you need to identify within your market are silent problems. This could include existing inefficiencies, awkward workflows or non-optimal solutions.
To define these issues, you could utilise your role as a digital product manager by conducting online secondary research (such as observing competitors’ websites or relevant statistical data) into the issues. You could also use elements of primary research, such as focus groups, to understand the issues associated with your users and how you can solve them.
The importance of accurate and reliable secondary research specifically can be reflected in the recent 3D TV product failure. Manufacturers identified the success of Avatar as a brand within this market, and assumed that demand was there. But, the 3DTV became obsolete as it required glasses, eliminated second-screening, and gave some people headaches and neck strain. Their failure to use primary research also became an issue; this did not research what shows consumers could actually watch on the device, leading to discontinuation. Although the solution was identified, the problem was not accurately noted, leading to a failure to solve anything.
By defining the problem clearly, you have a stronger chance of solving the right problem and you can improve the user’s experience with your product or service to ensure an optimum method of improving these experiences is created.
Develop Your Strategy
Once you have identified the issue, you need to evaluate the most efficient solution to the problem. As a digital product manager, it is your responsibility to make sure the solution to the issue is optimal for both the company and their users.
You can effectively research what strategy may be best through the use of focus groups to gain an understanding of how clients would like the problem to be solved,
or through other elements of primary research like questionnaires or forms to collect qualitative data on the market you are trying to fill. This would enable you as a digital product manager to orient your strategy towards this data for the most effective results and solutions to the problem.
However, the execution of your strategy is also highly important, as seen through the failure of Ford Edsel. Initially released in the late 1950s as “the new American car for the New American family”, the finished product did not live up to the glorious marketing campaigns and quickly lost demand. Due to this lack of strategy, the product failed significantly.
By creating an effective strategy, you can organise your market research more effectively to gain a greater understanding of how customers would like their solutions met. This would help you as a digital product manager to provide the ideal solution to the market’s problems.
Collect Quantitative Data
Quantitative data will help you to produce an unbiased approach to the issue at hand, balancing out the qualitative data gathered in previous steps and allowing for a more rounded and conceptualised view of the situation.
The most beneficial and cost-effective ways for you to collect quantitative data are through longitudinal studies and face-to-face interviews. This would provide high-quality information with the opportunity for a range of question types, such as closed questions, to reaffirm the statistical data needed for you to proceed.
By collecting relevant data, you can fulfil your objective of improving the chances of success of your product or service. The information gathered may help you understand how best to tailor your services to your client to ensure that customer satisfaction and business efficiency is both guaranteed. As always, the accuracy of your market share will make your strategy more effective, so this is important to keep in mind.
Quantitative data collection is also beneficial in providing confidence to your team as you have a strong platform of concrete evidence to stand on before you begin building and marketing your product or service.
It is highly important for digital product managers to utilise the benefits of having a team. By gathering their team, digital product managers can discuss the data and the implications of the collected data on their strategy to determine the best course of action.
Analyse Quantitative Data
Once all of the relevant information has been collected, it is important to analyse it and find patterns in the data for the best results.
For your research to actually become effective, you must utilise methods such as scatter graphs to find positive correlations between data. This would enable you to direct your team towards the optimum path to meet consumer demands and needs, improving the overall success of your product management.
Effective development and identification of correlation is important for a business. Take Coke, for example; as the popularity of Coke began to decline in the early 1980s, the choice to rebrand into ‘New Coke’ was made, with taste tests and forecasts indicating that significant success was on the horizon. However, they failed to take into account the emotional impact of Coke’s branding and design, leading to catastrophic brand damage.
By ensuring that your data correlates to your projected results, it guarantees that your market research has been effective in creating your strategy and that your product or service development will be successful. As a digital product manager, this would be highly beneficial in reaffirming the success of the business and you as a product lead manager.
Moreover, it would be highly advantageous in directing your team to act upon the wishes of the market, as you would have a strong sense of direction regarding how to appeal to the market. As a digital product manager, this would help in providing a target to aim for and how best to achieve it.
Take Action
The key to effectively researching your market is to act on the research gathered. Without action, the planning and organisation of your research is pointless.
A clear example of this can be seen through Kodak’s product failure in the 1980s. After identifying changes in the market that favour digital photography, they chose not to act on it and to attempt to save money instead of listening to what the camera market research revealed. This resulted in a massive failure to gain market share and profit.
The importance of action is significant; without it, your market research cannot be effective as it is wasted. Examples such as Kodak outline how market research alone cannot impact a business, but instead, the effectiveness of the research is determined by whether or not relevant action is taken.
By formulating a good strategy driven by good market research, why it can work, and how you’ll communicate that strategy to your team and stakeholders — as a product manager you can help you establish a solid product strategy that will position your company to win in the market.
Special thanks to Tremis Skeete, Executive Editor at Product Coalition for the valuable input which contributed to the editing of this article.
