What Is Market Research And How Does It Work?

Most people think of market research as a super-complex report filled with charts, forecasts, and data nobody ever reads. Well, it is not. It is much simpler actually. Market research is a way to understand what people need, why they buy, how best to enter a market and how your product can stay relevant. No, it isn’t about collecting more information. It’s about collecting the right information so you can make better decisions. Here is what it consists.

Start with real conversations. The fastest way to understand a market is to talk to the people already in it. If you run a software company building workflow automation, for example, you might speak to ten SMEs and learn that onboarding speed matters more than advanced features, managers hate tools that require long training, or perhaps most teams only use 20% of existing software features. Suddenly, you realise that the “feature-rich” pitch isn’t as effective as repositioning it as a “Get your team up and running in one afternoon” narrative.

Study your competitors as a customer would. You don’t need access to secret data. Just look at what’s already public. Check how competitors describe their product, how they price, how they come up with videos, what they highlight, and, more importantly, what they don’t explain well. Many workflow tools emphasise automation and dashboards, but avoid talking about support or real-world usage. If you see this gap, your software company can stand out by leaning into clarity, for example, simple onboarding, guided setup and honest use cases. You see, market research is often about spotting what others ignore.

Pay attention to search behaviour. Search bars and conversations with AI tell you exactly what people are thinking before they buy. If people are searching or typing certain things that involve related-to-you keywords like “workflow software for small teams”, “easy automation tool for beginners” and “no-code approval system”, then you know what to emphasise in your messaging, content, and product demo. No complicated tools required. Just a smart observation.

Look at industry shifts. Markets move because something pushes them: new regulations, new standards, or new problems. Say a new compliance requirement lands for logistics firms. Suddenly, everyone needs better tracking, documentation, or audit trails. If your software company notices this early and can adjust its product story, you might land new customers quickly. Market research is all about identifying what’s coming.

Review what’s already happening inside your business. Your own data is usually the most honest, such as why you won deals, why you lost deals, which features people use the most or what prospects keep asking during demos. These simple clues show you where your product naturally wins, and where you’re forcing the message.

It is simple. You just need to gather real insights from people, competitors, searches, industry shifts, and your own experiences. Then you turn those insights into decisions. Create a series of questions and answers, something like this: who to target, what problems to highlight, what messages actually resonate, what features matter most and what improvements create the biggest impact.