How to test your market with quantitative research?

This article explores in detail how to conduct a quantitative study to assess the viability of your innovation project. You'll discover the different methods of data collection, the advantages of the quantitative approach, and concrete examples of strategies to adopt in B2B and B2C. Whether you're a start-up or a well-established company, these tips will help you secure your projects and maximize your chances of success.

Definitions

What is market testing?

For an innovative product or service, market testing means validating the potential of your offering with your customers.

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This method is widely used in innovation, as it enables us to obtain market feedback before launching the development phases, thus securing our projects and investments.

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There are several types of market test, mainly qualitative and quantitative.

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In most cases, these tests consist of marketing and sales experiments to define the elements of a viable business model.

What is a quantitative study?

A quantitative study is an approach using methods aimed at collecting numerical data in large quantities on a target sample.

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The aim is to measure and quantify events (views, clicks, reactions, comments, etc.) to identify causal relationships. With large volumes, this method generates generalizable results.

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Collection methods include questionnaires, surveys and marketing and sales tests. But most important of all is the ability to collect standardized data from large samples.

What are the differences between quantitative and qualitative research?

When differentiating between quantitative and qualitative research, there are several key elements to consider.

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As you will have gathered, a quantitative study is based on the collection of numerical data and aims to quantify variables in order to obtain generalizable results. It focuses on measurement, evaluation and statistical analysis. It is therefore particularly well-suited to assessing the scale of a phenomenon or testing hypotheses.

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In contrast, a qualitative study focuses on the underlying nature of phenomena, without seeking to quantify them. It is research based on observation, interpretation and description, providing detailed, nuanced information on behavior, opinions or motivations. This type of study is used to understand the profound nature of phenomena.

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It should be noted that these two types of study are not mutually exclusive, but often complement each other within the framework of a research project.

What is the advantage of a quantitative approach to market testing?

As stated earlier, a quantitative study is best suited to testing hypotheses on large samples. This is exactly what we want to do in a market validation test for an innovation project.

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Indeed, when a new service or product is created, many questions need to be answered, such as:

• Does my innovation meet a real need?
• Is the market big enough to generate growth?
• What's the right price?
• What's the right value proposition?
• What are the key features to focus on in the MVP (Minimum Viable Product)?
• What are the mistakes to avoid?

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Hypotheses are then formulated as potential answers to these questions. Quantitative market tests then provide a large amount of data to validate or invalidate these hypotheses, and give a reliable orientation to the project's development strategy.

Different types of methods or techniques depending on your objectives

The methods or techniques you can use will largely depend on your targeting objective.

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In most B2B cases, your research will be based on prospecting channels such as e-mail and LinkedIn. Using these techniques, your objectives may be, for example, to test your sales pitch or conversion funnel, or to distribute a questionnaire to gather both quantitative and qualitative data.

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In B2C, your approach will be based on advertising methods that redirect traffic to a landing page with a contact form or questionnaire.

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B2B (Business to Business): refers to business-to-business models, where products or services are sold from one company to another.

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B2C (Business to Consumer): refers to business models between a company and individual consumers, where products or services are sold directly to individuals.

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You'll note the close relationship between qualitative and quantitative research. Whether in B2B or B2C, you're going to generate conversions with people who are potentially ready to do business with you. You'll be able to capitalize on these conversions for your qualitative research.

How do you test your market with quantitative research?

Marketing your innovation

First and foremost, testing a market requires a clear, intelligible offer for your project. The first step is to market your innovation.

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In keeping with the logic of testing, this work aims to transform a project idea into a viable and attractive offer for the market, through the definition of hypotheses on the following elements:

• The value proposition
• Key features
• The main benefits
• Problems solved
• Other elements of the business model, such as pricing, customer segments, etc., are also taken into account.

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Marketing your innovation focuses mainly on your product or service, value proposition canvas or business model canvas.

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By "hypotheses", we mean assumptions that may or may not be validated. It is therefore possible to make several hypotheses for the same element. For example, "For a given target, my value proposition is either 'A' or 'B'.

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To make your hypotheses all the more relevant, you also need to define validation criteria. For example, if we go back to the example earlier, our criterion would be: "The value proposition is 'A' if I get more than 100 conversions for every 10,000 people reached."

Define strategy and action plan

Defining these hypotheses and criteria will enable you to identify what you want to test, and more simply formulate your strategy and an action plan to validate them.

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These two notions are key, and must be made up of a logical sequence of experiments to be carried out, spread out over time in the form of iterations.

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Keep to a logic of validating the main hypotheses in the first iterations, then optimizing them in subsequent iterations.

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Here is a list of experiments available to you:

Split testing or A/B testing

A split test is an experiment in which the flow is directed 50/50 towards two identical supports, but with a single variation. The aim of this test is to determine which variation has the most traction.

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B2C: Distribute two identical landing pages, but with a different value proposition.

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B2B: Send emails presenting your innovation from different angles.

Trigger test

A trigger test is an experiment that consists of creating numerous variations of an awareness medium (ad, email, message) to test what triggers target interest. This data is then used to optimize the product/service and the way it is promoted.

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B2C: Broadcast 3 ads presenting your innovation from different angles

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B2B: Send e-mails with different subject lines

Multivariant test

This time, the support has several variations. Sometimes, in a multivariate test, there's a big success on one of the supports. To determine the variation(s) responsible for this success, we need to proceed by elimination until we identify the key variations.

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This test makes it possible to test more elements more quickly to clearly define the core product/service. Once this is done, A/B or trigger tests can be carried out to optimize conversion factors.

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B2C: Distribute 2 landing pages with variations on value proposition, benefits, pricing, etc.

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B2B: Distribute multiple emails with different subject lines and bodies

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These are the most common types of experiment. Other methods include high hurdle, smoke test, MVP test, etc.

Sample B2B and B2C test strategy and action plan

At Dynergie, we are used to applying strategies and action plans that are quite similar to each other, as our customers often wish to validate very similar hypotheses, for example, on the value proposition, key benefits, the right targets, the best channels, the business model, etc....

B2B

When addressing professionals, it's often difficult to stand out among the many companies targeting the same prospects. That's why it's essential to choose the subject and body of your e-mail or LinkedIn message wisely.

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In the first iteration, therefore, opt for one campaign per target to personalize messages, and carry out a "trigger test " on the subject of the e-mail or your invitations to identify the best interest trigger.

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Once your targets open your e-mails or LinkedIn invitations, you can carry out A/B testing in subsequent iterations on the content of the e-mail or LinkedIn messages to identify the most convincing pitch.

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Depending on your conversion objective, you can ask your targets to make qualitative exchanges or answer a questionnaire, preferably a short one.

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Mentioning market research or innovation in e-mails is generally effective in getting responses, and especially "friendlier" responses.

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Here's an example of an action plan for a first iteration:

B2C

In B2C, the approach is generally different, as it's fairly easy to reach the desired targets.

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During the first two iterations, it's best to perform a "trigger test" with your ads (variations on features, key benefits) and a "multivariant test " with two landing pages (variations on value proposition, features, benefits, pricing, etc.).

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The "trigger test" will enable you to identify the key elements promoting conversion of your solution, and the "multivariant test" will help you determine the appropriate pitch. You can use as many channels as you like, such as Google Search, Google Display, Facebook, Instagram, etc.

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In subsequent iterations, optimize your advertising media with those that perform best, to converge withA/B testing on a single ad and landing page.

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Here's an example of an action plan for a first iteration:

Building study materials

If you operate in B2B, create a database of professional contacts to prospect your targets (email, telephone, LinkedIn). Prepare your messages and design your questionnaire to gather feedback simply, or your interview guide for potential quality exchanges.

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If your positioning is B2C, you'll also need to create your various ads, landing pages and contact forms, in line with the hypotheses you wish to test.

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Keep the KISS mantra (Keep It Simple, Stupid) in mind to create quick and easy ads, emails, messages, questionnaires or landing pages.

Programming and monitoring campaigns

Campaign programming isn't particularly complex if you're used to using the tools. Otherwise, we recommend you follow tutorials or call in the experts. It's essential to take great care to be able to track all the data you wish to study, by using tracking tools like Google Analytics or by correctly setting up your messaging tool.

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When campaigns are underway, avoid making changes too frequently, so that your data doesn't get corrupted. Above all, make sure you base your changes on sufficient volumes and periods of time.

Collect the right quantitative data

For your study results to be relevant, collecting the right data is key.

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So don't be distracted by so-called "Vanity Metrics". These are statistics that appear to be spectacular, but do not reflect truly conclusive results.

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For example, if I focus only on the fact that there were 1 million visitors to a website, but not on the fact that only two customers converted out of the million visitors, then I risk deliberately ignoring elements that are potentially very problematic for my business.

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It's exactly the same with quantitative market research. While volumes are important to ensure that results are based on sufficient quantities of data, you also need to be concerned about the rates and costs of passage between each stage of my conversion funnel.

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Here are the key data and KPIs to collect:

In B2C

In B2B

How do you analyze your results?

To analyze the results, you need to go step by step, focusing on the elements you wanted to test and the hypotheses you defined.

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To simplify analysis, we recommend using a data visualization tool such as Looker Studio, Power BI or others.

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1. First, study the results at the top of your funnel, such as the open rate of your e-mails or the performance of your various ads. This first analysis will enable you to identify whether your innovation and your messages are arousing interest among your targets.

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2. Secondly, analyze the results in the middle of your conversion path, such as the rate of clicks on a link in your e-mail or the behavior of visitors to your landing page. This second analysis will guide you in checking whether your pitch is good and your offer easy to understand.

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3. Thirdly, examine the results at the bottom of your conversion funnel, focusing on the conversion rate of your pages or e-mails. This last analysis will determine whether your target audience has confirmed its interest and is ready to buy.

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4. Once you've completed these three analyses, you'll need to compare your results with industry benchmarks or results from previous iterations.

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Your conclusions must be based on your various analyses, your positioning in relation to the market or the iterations, but also on the criteria for validating your hypotheses, so that you can make the best choice for the rest of your project.

Why do quantitative research with Dynergie?

Dynergie is a consulting firm specializing in market research for innovation projects. With more than a hundred market tests to their credit over the last 10 years, our experts master all the processes involved in the emergence, marketing and commercial deployment of any type of project. They can help you carry out quantitative market research to validate the potential of your innovation project, and provide you with strategic recommendations to simplify its go-to-market.