Common Market Research Mistakes of Small SAAS Companies

Market research is an important component of any small SAAS company’s marketing strategy success and competitive positioning. The research might involve understanding the market and the competitive landscape before launching a new product. It may also entail understanding what customers think about your existing product/services, a market segmentation to define a target market, or anything that will help you understand where your product or service stands compared to others in the market. Other comparisons will include what consumers want and how you can improve your product or service to cater to your consumer’s needs and pain points.

However, despite the advantages of market research, a lot of smaller firms hesitate, fail or don’t do it at all. Here are some common market research mistakes of small SAAS companies:

You think you do not have the budget for it and that it will be too expensive. Often times, market research is associated with big CPG brands that have the marketing budget to do such research. This thinking is wrong. Market research projects can range from a few thousand dollars to around $25,000 annually. Why not spend a few thousand dollars on market research now to find out what people think about your product/service and what is it that you need, as opposed to spending a ton of money on features you may eventually discover are not even wanted by your consumers? The more important question is, should I hire a market research professional or do it myself? The advice of a market research professional is invaluable, but if you feel you don’t have the budget for it, yet you are keen on learning about what it takes to do effective research, nothing should stop you from doing it yourself.

You think secondary research is enough. SAAS companies often think they can get all the information they need on the Internet. They think that because they worked in the market for a long time, they know more than anyone else. This thinking can lead to disaster. Primary research is very important and it simply entails making a few calls to validate the hypotheses you derived from your secondary research. Primary research will help you understand the needs, attitudes, and pain points of your consumers first hand in real time.

You only ask those you know. A common mistake of start-ups is to perform research by utilizing their friends and family. Friends and family constitute the worst possible selection for a “focus group”. You will encounter considerable bias with this scenario. To truly understand what people think about your product, you must ask real consumers, who will tell you both the pros and cons, what makes them unhappy, and what changes they would like to see occur.

You do market research, but then ignore your findings. This is worse than not performing any research at all, because by ignoring your findings, you not only wasted your money in doing research, but you also wasted your valuable time and energy which could have been spent on another project. A lot of young CEOs tend to toss good research aside because their findings don’t support the answers they want to see. If the findings are different from your hypotheses, they should instead raise an alarm, and point you to something you may have missed.