Understanding Quantitative and Qualitative Research

Market research is considered to be an integral part of any startup’s journey. Day in and day out, even the best of companies are trying to learn more about their customers. And what’s better than to have them answer your questions?

Primary market research is carried out by directly getting in touch with the various stakeholders you are trying to understand more about. While it is undoubtedly an expensive and tedious process, great insights can be derived from it.

Generally speaking, before carrying out the primary market research, entrepreneurs are faced with two options- either to go in the direction of quantitative research or to undertake qualitative research.

Let’s see what each of these terms mean and how they can be beneficial for startups.

Quantitative Market Research

Quantitative research, as the name suggests, provides a startup with statistical data about the customer through a set of structured questions which have definitive answers. For the data to not be skewed, a large enough sample size must be taken.

Many startups choose to proceed with quantitative research because it provides real data that can be analysed before making a decision. Questions such as the size of your market, consumer interest in your product, spending habits of customers, etc. can all be found out through this method.

Here are some of the most popular ways of conducting quantitative research:

Surveys: They are undoubtedly one of the most common methods of carrying out research and collecting data from customers. Not only are they inexpensive but also require less time on the customer’s end which creates a win-win situation for both parties.

In fact, almost every time you visit a shopping mall or restaurant, you will be quickly asked to rate your experience. Since this process is digitised in many places now, data is collated with ease and can help in understanding the customer better.
A/B Testing: This strategy has become so ubiquitous that almost every entrepreneur has adopted it at least once. A/B testing is used when there are two sets of solutions to achieve the same objective and one needs to find out the right one to use.

Essentially, you show Solution A to one set of your customers and Solution B to the other set and extract data to see which one performed better. It is a great way to know exactly what works for customers instead of shooting in the dark.
Interview Questionnaire: In order to conduct more in-depth research, entrepreneurs can carry out face-to-face, telephonic or even email interviews with customers. However, this requires a well-thought-out questionnaire and uses up a lot of time.

The biggest benefit is that a lot more insights can be derived from the expressions and tone of voice of the customers and clarifications can be provided on the spot for any unclear questions.

Quantitative research has many advantages for entrepreneurs. The key benefits are as follows:

It allows entrepreneurs to get data-backed insights from customers at scale since the methods are easy to put to use.
Since customers are required to give answers in a numerical way (on a scale or something similar), results are prepared faster and bias is mitigated to some extent.
Data derived from quantitative research methods can be interpreted easily and stored digitally for future reference.

Qualitative Market Research

Qualitative market research, as opposed to quantitative, focuses on opinions and thoughts that are shared by customers. The questions are generally open-ended and semi-structured in nature so that in-depth analysis can be done on the topic at hand.

For a long time, quantitative research was preferred by companies because it was felt that data-driven insights were key to good decisions. However, there has been a growing consensus over the years that qualitative research is as important than quantitative, if not more.

Especially in the case of startups, there are many open-ended questions that need to be answered before the more structured ones come into play. For example, before putting a number on your market size, you need to ask your customers questions like “Why does this remain a problem for you?”, “What will help you make the switch to our brand?” and “How was the user experience with other brands?”. Perceptions, behaviour and psychology is much better understood via qualitative techniques.

Some of the most common ways of carrying out qualitative research include:

Focus Groups: As the name suggests, a small group of participants (about 6-8 in total) are called for a discussion on a pre-selected set of topics. The small size of the group allows each participant to express his/her opinion freely and interact with others.

The onus lies on the moderator to ensure that each person is allowed to share their thoughts and observations are noted in an unbiased manner.
Observations/Shop-along: In order to remove any bias, customer behaviour can be viewed from afar by researchers. The set-up can be controlled or regular, depending upon the goals of the research. For example, one can see the reaction of customers towards a free taster in a mall without directly interacting with them.

A shop-along is another interesting method being adopted by companies. Here, a person is assigned to a shopper and accompanies them as they purchase different items. The shopper is asked different questions along the way to better understand their thought process.
One-on-one Interviews: The best way to get detailed insights into a customer’s mindset is through one-on-one interviews. This gives the interviewer plenty of time to ask questions and learn about the customer without distractions.

Customers also get a chance to express their opinions in a casual and informal manner, increasing the chance of an impartial discussion.

Some of the key advantages of qualitative market research are:

Qualitative research allows you to analyse different aspects of the business in detail from the viewpoint of the customers.
A lot of information and insights can be generated without interacting with a large number of people.
It allows entrepreneurs to understand customer behaviour, psychology and opinions, things that cannot be captured in data.

When should you choose which method?

It is evident that both quantitative and qualitative market research methods are beneficial for startups. However, the only way to extract their full potential is by understanding when each of them should be used.

Quantitative research should be used when you have to back a hypothesis with statistical data or you simply want to gather structured data about your customers. You will need to have a specific goal in mind and a clear set of metrics against which you want to check the results.

Qualitative research, on the other hand, should be used when you want to understand those elements that typically cannot be quantified, such as emotions. It is to answer the “why” of many business facets which are not reflected in data.