Market research is the foundation of a successful product or service launch. It’s the process of understanding what people want and need, why they want it, their expectations for your offering and how much they are willing to pay for your product or service.
When you do not invest in market research ahead of time, you may end up with a product failure like the infamous Segway or the Ford Edsel. Product success without market research is nearly impossible today, yet many businesses fail to incorporate sufficient market research into decision-making processes.
Traditional Market Research Is Expensive
However, while businesses are becoming more and more aware of the importance of market research in order to thrive in a competitive market, they are also realizing that gathering this information can be expensive and time-consuming.
There is an array of traditional market research techniques that an organization can use to learn more about their customers, including interviews, surveys, focus groups and market reports.
That said, traditional market reports cost anywhere from $15,000 to $35,000, depending on the size and scope, making them inaccessible to many product teams.
Other forms of market research, like interviews, are just as costly at scale. Interviews are useful when conducting customer journeys or developing and testing new products because they can lead to spontaneous conversations that include asking clarifying questions, providing real-time feedback or giving suggestions. However, a typical business interview costs from $300 to $500.
Focus groups aren’t much better. Clients are often disappointed by the lack of meaningful feedback they receive during a focus group because there is less spontaneity in comparison with an interview. Moreover, the cost of a focus group ranges from $4,000 to $12,000.
Beyond being costly and slow, traditional market research simply can’t handle the scale of data out there today, as there are billions of product data points, making it less and less effective.
AI-Powered Market Research
Artificial intelligence (AI) has brought about a new solution: By using algorithms developed with data from sources like Amazon, Walmart and Target, businesses can scan huge amounts of market research information in far less time than traditional methods.
Commerce firms are quickly becoming aware that artificial intelligence is cheaper than traditional market research methods.
In one example, my company, a product data firm, used AI to scan billions of data points and generate 10,000 market reports. The cost savings generated by using AI is staggering: While it would take an army of analysts months or years to scan the same amount of data, AI can do so in minutes.
These AI-generated market reports are available for anyone to browse, which is a big difference from traditional market research sources, where single reports are paid for and usually cost upward of $4,000.
The availability and use of AI in market research will have a huge impact on how companies build products. With an unlimited amount of information at their fingertips, brands can make more informed decisions.
In addition, AI can scan market data in any language and from a wide range of sources — my company’s data engine scanned over 100 sources of data in 12 languages — meaning that market insights are accessible to anyone, anywhere, in any market segment.
Ultimately, market research used to be so expensive as to be out of reach for many product teams. Now, with the power of AI and big data, market research insights are more accessible than ever before, enabling greater product innovation.
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