When creating or launching a product you might think about two types of research approaches: User Research and Market research. User research focuses on individual users’ needs, behaviours and preferences. After all, how can you create something that users want but you don’t completely understand? Whereas, Market research looks at the larger market to find opportunities or track trends. And it helps to decide if a product plan has a chance to be successful.
But how do you know which type of research is best for your business? And what happens if you skip any 1 research? If you ignore User research you might create a product that don’t meet users needs whereas if you focus only on users so you might miss bigger trends that could impact your success. However, both are important but they have different goals so if you skip each of them, you risk building a product that people might not want or fail to stand in a competitive market. That’s why, if you want to build products that people want and succeed in a market, it’s important for you to understand the difference between them and when to use each research type.
In this article, you will understand key differences between User research and Market research, common techniques to use and when to use them. Let’s get into the details;
Key difference: User research vs Market research
User research helps businesses to understand what users need and want and it shows what problems they face when they interact with a product. The goal is to solve real users problems and provide valuable products so that users get satisfied. By identifying the pain points like where users abandon, where they are stuck, slow loading times or any other problems that users face, businesses can create products that people will buy which can reduce the risk of creating or launching something that no one needs. And satisfied customers often become loyal advocates which can further boost brand credibility and attract even more potential buyers.
Imagine you create an app without discussing it with the people who will actually use it. Would it solve their problems? Of course not! But with the user research you can get the answer of What do they truly need and what features can make a difference in their experience. For example, Before launching a food delivery app, the team might conduct user interviews to understand what frustrations people have with current delivery apps. Maybe users are frustrated with late delivery or lack of communication with riders. These insights can help in design decisions like chat features, riders direct contact with the customers or tracking. Without input from users, the app could have overlooked what users actually cared about, leading to low user satisfaction. Also, cost will increase because changes will be needed after the launch. A study by the Baymard Institute, revealed that 88% of online consumers are less likely to return to a website after a bad experience. On the other hand, Market research helps businesses understand customers’ needs, preferences and buying behaviour. It shows where to sell and how to reach customers. It also helps prevent making costly mistakes by making sure that there is a demand for the product as a result businesses don’t lose money on low demand products and stay competitive by knowing what others are doing in the market. For example, you are launching a new fitness tracker. Through market research, you can find out whether fitness tracking devices are popular? Or you might discover that people also want help with stress and mindfulness. Knowing this, you can design a product that not only tracks workouts but also offers features like breathing exercises and stress monitoring. Overall, it guides better decisions and reduces risks which makes businesses more likely to grow successfully. Also, the business experiences growth through word-of-mouth referrals and positive reviews which builds a positive reputation. This customer-driven growth not only increases sales but also strengthens the brand’s position in the market, making it even more competitive.
However, by ignoring market research, businesses can make poor decisions as they may target the wrong customers or products which can increase the chance of wasting money and efforts on ideas that are likely to fail. For example, consider Ford’s Edsel. In the 1950s, Ford invested over $250 million (equivalent to more than $2 billion today) to develop and launch the Edsel, a new line of cars. However, the Edsel was a commercial failure, selling only around 100,000 units in its first year instead of the projected 400,000. This failure was largely attributed to a lack of proper market research, as Ford did not adequately test consumer interest or preferences before the launch.
Common User Research techniques
Every business wants their product to be successful. To create a successful product, you need to understand users. But how can you find out what they really need? The answer is User research techniques. User research techniques are crucial as they provide real insights about how people use products or services which helps create better designs that are easy to use. Research also shows what problems users face and how to fix them, leading to better products and happier users.
Let’s take a look at some of the most effective user research techniques that can improve your product.
Usability testing:
Usability testing has a direct link with the users satisfaction as it identifies the issues in a product before it reaches the users. It involves feedback from real users so through this businesses can find friction points and can improve designs according to their needs. By detecting and resolving usability issues early on you can save time, money, and improve customer satisfaction which leads to increase in engagement and business success.
But how can you conduct usability testing? It is very simple as during testing, when the users are performing the specific task the researchers observe them and identify the user friction like where they get stuck, unclear instructions or difficulty in navigation which helps businesses to make improvements in the design, resolve user friction and make the design easy so that users can complete their task efficiently. For example, if users can’t figure out how to add an item to the cart in your app, you’ll spot it during usability testing and fix it before launch. This way, you make the product easier and more enjoyable to use.
Moreover, Usability testing helps you find answers to specific questions like:
- If they get stuck and confused along the way, where does this happen? And what causes the confusion?
- Is the user interface intuitive?
- How do users interact with the website/app? What are they thinking when using it?
- Whether or not a product allows a user to reach their goals?
A/B testing:
A/B testing involves creating two versions of your design and testing them with different user groups. This allows you to compare and measure the performance of each version and then identify which design is more effective and which performs better in terms of user engagement and conversion rates. For example, if you aren’t sure whether a red or blue “Buy Now” button gets more clicks, you can run an A/B test to see which one users prefer based on real data as this will provide you with clear data on user preferences which helps businesses make data driven decisions which boosts product success and improves user satisfaction.
Surveys and Questionnaire:
Surveys and Questionnaires allow you to gather quantitative and qualitative feedback from users typically in the form of multiple-choice questions, sentiment, or ratings. Through surveys, you can collect data from many users at once as it includes ratings like from 1-10 or choose one answer from options so it can help businesses to quickly get feedback from many users at once. For example, you can send a short survey after someone uses your app asking, “Was anything confusing?” or “What feature would you like us to add?”. On the other hand, Questionnaires are very similar to surveys but it may take little longer as it is mostly detailed as it often includes mixed questions. In open ended questions, where users write by themselves and tell about their frustration or any feedback and close ended questions include multiple choice or yes/no.
However, surveys and questionnaires both are best for user research as it helps to know current trends, users needs and frictions. As a result, businesses can make smarter decisions leading to higher satisfaction of users as they will get the product according to their need. According to Salesforce, 66% of customers expect companies to understand their needs and expectations. When businesses use surveys to gather and act on user feedback, they can better meet these expectations and build stronger relationships with their audience.
Common Market research techniques
If market research is not used, businesses risk making poor decisions. They may launch products that don’t meet customer needs which can lead to low sales and lost money. Without research, targeting the wrong audience can waste resources. It can cause misunderstandings about competitors. This may result in falling behind or losing market share. And if market research techniques are used properly, businesses can make products that sell well. It also helps to spot trends and changes in the market early which allows businesses to adjust quickly and stay ahead.
Now that you know how important market research is, let’s take a look at some common techniques businesses use to stay ahead.
Market segmentation:
It is a market research technique that divides the audience into smaller groups based on age, gender, interest or location as it helps to meet their needs specifically which can lead to high user satisfaction as they think they are valued. Instead of trying to reach everyone, they target the right people which can increase sales and customer loyalty.
Businesses should use market segmentation because Why treat all customers the same when they have different needs? For example, if you’re selling sneakers, would you talk to teenagers the same way you talk to marathon runners? Probably not! Teens might want stylish, trendy shoes, while runners care more about comfort and performance. Also it helps you to get the answers like Who are my customers? What do they care about most? As a result you can design your product or marketing in a way that feels personalized, making it much more effective. For example, according to a study by McKinsey, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen.
SWOT Analysis:
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a smart technique that businesses can use to get the full picture about their position which helps them to make smart and safe moves like by improving their weak areas or taking benefit from market opportunities. For example, if you’re launching a new coffee shop, your strength might be a great location, but your weakness could be low brand recognition. An opportunity could be a growing number of remote workers looking for cozy places, and a threat might be a big café chain opening nearby. By doing SWOT analysis, businesses can get a clear picture for better decision making. Also, they can get prepared earlier before competitors take advantage and they can make backup plans for possible threats.
Competitor analysis:
It is a secret weapon as it helps businesses to understand the strengths and weaknesses of other companies in the same market. It shows what rivals are doing well and where they fall short which helps a business to find opportunities and avoid mistakes. By studying competitors, a company can set better goals and improve its products or services. For example, if you’re running an online store selling fitness equipment, competitor analysis might reveal that one of your competitors excels in customer service, offering 24/7 support and fast response times, while another competitor is known for lower prices but lacks product variety. By analyzing this, you can find areas where your business can stand out perhaps by offering exceptional customer service or expanding your product range.
Creating a product is not just a great idea, but it’s all about understanding the users who will use and market where it will complete. As a result, using both research is important as User research focuses on high user satisfaction and customer loyalty while Market research focuses more on business success, growth and profitability. However the end goal for both is the same like to build a product that people love and thrive in the market.
Skipping either one is like wasting the efforts and time that you have already put in. Ultimately, using both research techniques ensures that your product resonates with users, aligns with market demands, and stands a strong chance of success. Therefore, integrating both user and market research techniques is crucial for building a product that people love and that thrives in the marketplace.
Ready to take your next step?
Start small: pick one user research technique and one market research technique from this article and apply them to your current or next project. Even simple efforts like short surveys or a basic competitor analysis can make a big difference.
