How to Work With Focus Groups to Test Your Niche or Business Idea

18 min read

Do you have an idea for a product or a retail niche but aren’t sure if there is a market for it? Do you hesitate to launch because you don’t have enough validation that your idea will succeed?

If you answered “yes” to these questions, you need to test your niche through focus groups.

A focus group is a small group of consumers that reflects your intended target market. By pitching your idea to them and analyzing their responses, you can gauge the viability of your idea and make changes accordingly.

As we’ll show you below, it’s both accessible and affordable to put together a focus group to test your niche. You’ll learn how to find the right people for your focus group, what to ask them, and how to analyze their answers.

What is a Focus Group?

A focus group is usually 7-10 people who are unfamiliar with each other but fit into a specific demographic profile. A moderator, usually someone unaffiliated with the business, asks the group a series of focused questions and records their responses.

Analyzing these responses gives the business insight into the way the group perceives the idea or product.

Roughly 70% of all market research dollars in Fortune 500 companies are spent on focus groups, according to Marketing Research Association.

Primarily, focus groups give you qualitative insight into an idea, product, person (such as politicians) or even a piece of art.

The use cases are extensive. Businesses (especially in the FMCG sector) frequently use them to test everything from packaging to new product categories. Movie studios use them to test early cuts of blockbuster movies. Even government organizations use focus groups to assess their public-facing messaging, education initiatives, etc.

What focus groups can tell you:

How a highly-specific demographic thinks or feels about a product
Why people feel the way they feel about an idea or product
How you can change a product or idea to serve the target market’s needs better
How you can market the product or idea to its intended audience.

What focus groups can’t tell you:

How individuals would react to your product or idea
How individual preferences can change over time or the product’s evolution
Whether learnings from one group apply to another demographic

Although they have their flaws — notably, groupthink and management issues — focus groups remain one of the best sources of qualitative research for any business. Combined with in-depth one-on-one interviews, these groups can tell you a lot about the viability of your niche idea.

In the next section, we’ll discuss how to create your focus group.

How to Work With a Focus Group

Qualitative research through focus groups involves four steps:

Planning and researching the focus group
Finding appropriate participants
Developing a set of questions
Analyzing group responses for actionable insight.

Let’s look at each of these steps in more detail below.

1. Plan the focus group study

A focus group study involves extensive planning and research. You have to research your target audience and zoom-in on a narrow demographic that would respond to your idea.

To do this, you have first to nail your value proposition. Unless you do it, you can’t figure out who to pitch your idea to.

Start by listing down the following:

Why you sell: As Simon Sinek says, “start with ‘why’.” List the core reason for the business’ existence and the philosophy behind it.
What you sell: Mention your exact product names and their categories.
Where you plan to sell: Specify all your target channels (e-commerce, social media, physical stores, online marketplaces, direct sales, etc.)
Which needs you fulfill: List the key issues your business and its products solve. Do this for the company as a whole and each product in your catalog.

Your goal is to figure out your target market from this data.

One way to do this is by digging through your competitors. We’ll show you two ways to do this below:

Audience research with Amazon

Amazon is an excellent place to start your research. Head over to the full store directory and look for your broad product category.

For example, if you sell gardening tools, you would select “Garden & Outdoors” as your home category.

Narrow your niche further on the next screen by selecting a sub-category.

Amazon’s site directory is a great way to figure out what specific categories your products belong to

Amazon will let you zoom-in even further by selecting particular product categories.

Use Amazon’s listings to figure out your product’s home category, sub-category and product category

Thus, you now have your home category (“Garden & Outdoors), sub-category (“Lawn & Garden Care”) and product category (“Gardening Tool Sets”).

Your next step is to analyze how your competitors are advertising their products.

Turn to Amazon again to find the best-selling products in your target category. Analyze each product’s description. Look for keywords that indicate the product’s target market. Ask yourself: is this product meant for a hobbyist or a professional? Is it targeting a specific niche? What is the target gender and age group?

For example, this gardening tool set mentions “comfort grip handles for arthritis” in the description. This indicates that the target market is likely older (since younger people are unlikely to have arthritis).

Look for keywords that indicate the product’s target audience

Make a note of these for all your products. Your objective is to build a demographic sketch of the kind of person who would buy your products.

Audience research with Facebook

Another free source of market research is Facebook. Head over to the Audience Insights tool in the ad manager.

Facebook’s Audience Insights is a fantastic tool for gathering demographic data

Choose “Everyone on Facebook” on the next screen.

Start your research by adding your principal competitors in the “Interest” field. In case the competitor doesn’t show up (common in small niches), look for a leading publication in the niche instead.

For example, if you’re selling high-end men’s formal shoes, you might look up a famous competitor like Allen Edmonds. Facebook will show you the demographics of people who’ve liked or followed this brand on Facebook.

Search for a competitor in Audience Insights to find its target demographic

Look for job titles, education level, location, household income, home ownership, etc. Also look at their page likes to see what other brands and activities they’re interested in.

Your competitor’s audience’s interests can help you figure out the target market’s hobbies, interests, and even education/income levels

Use this data to create a rough sketch of your target demographic. This will help you in the next step where you find and recruit your focus group audience.

2. Find participants for the focus group

The research you conducted in the above step should give you a good idea of who you should include in your focus group. At the very least, you should have the following information:

Average age
Location (rural, urban, city size, state, etc.)
Household income and education level.

You’ll use this when selecting candidates for the focus group. Limit your group size to 6-10 participants. More than that and you’ll struggle to maintain order. Anything lower than six impacts the quality of discussion.

There are several places where you can find participants, such as:

Craigslist: Suitable for consumer-focused ideas, especially those that target the low and mid-segment of the market.

Craigslist’s massive audience and open nature makes it a great place to recruit participants

Facebook Groups: Search Facebook for your target niche keywords to find dedicated groups. Look for active groups that have the same audience profile as identified above.

For example, here are some searches for “men’s shoes”:

Facebook Groups are a good place to look for participants, especially for niche product categories

LinkedIn Groups: Search for your target keyword on LinkedIn. Select “Groups” in the top down menu to limit your search to groups instead of people or companies. Look for a group with the same target audience.

Here’s an example search for “shoes”:

LinkedIn groups can help you find participants for B2B focus groups

Reddit: Reddit’s subreddits (or sub-forums) are a great place to find people for focus groups. Search for your target keyword, then look for a subreddit that fits the audience description.

For example, here’s a search for “shoes.” Both the first two results look promising:

Similar to Craigslist, Reddit’s large audience and open nature makes it a great place to recruit participants

Once you find your target groups or pages, you can either try to contact its members individually or join the group and post your requirements. The former is more time consuming but will give you better results.

A few things to keep in mind when you post your requirements:

Include a monetary award for participation. Make this substantial enough that people feel their time is valued, but not so much that you get participation just for the money.
Specify your requirements (concerning demographics and interests) very clearly.
Mention that they’ll be asked to appear together in a recorded group-interview setting via webcam.
Specify the purpose of the focus group. Write a brief description of your product/company.
Specify the tentative date, time and length of the interview. Confirm that the participants are available during that time.

To screen candidates, ask them to fill out a form (use Google Forms or Typeform) with their demographics and interest details. Only invite people who meet your requirements.

Conduct the Focus Group

Conventionally, focus groups are conducted with all the participants in the same room. The proceedings are recorded so that the responses can be analyzed further.

This approach works for large businesses but can be cost prohibitive for small companies.

A workaround is to use a video chat tool such as Google Hangouts or Zoom. Whatever tool you use should have a) recording capability, and b) ability to host all your participants (plus the moderator) at once.

Google Hangouts is a free tool for conducting group video chats — perfect for remote focus group studies

Ensure that the tool is accessible to your selected participants. Avoid anything that requires special software.

The next step is to create a list of questions for the focus group. These questions should focus on the participants’ interest in the idea, their opinions, concerns, likes, dislikes, etc.

Here are a few tips for creating your questions:

Be clear: Every question should focus on a specific issue and should solicit a single answer. Participants should not doubt as to what the question asks of them.
Be open-ended: Your questions should focus on a specific topic, yet encourage discussion. Think in terms of broad qualities — benefits, flaws, things that can be improved, etc. — and ask questions related to them.
Encourage discussion: Your primary goal is to get people to start talking. The more diverse the range of opinions, the better. In case the conversation stalls, don’t ask additional questions to solicit responses.

You can even group your questions into separate categories, such as:

Product-related: “What features do you like about the product? What do you dislike?”
Sales-related: “Would you buy this product? Would you recommend this product to a friend? If yes, why? If no, why not?”
Results-related: “What results or benefits do you expect from using this product? What side-effects or inconveniences are you worried about?”
Change-related: “How could this product be improved? What specific changes would convince you to buy it?”
Pricing-related: “How much would you be willing to pay for this product? What could convince you to pay more?”

Ideally, you want a minimum of 10 minutes for each question. The larger the group, the more time you want to reserve for discussion.

Lastly, you want to get a moderator to conduct the discussion. This moderator should be unaffiliated to your business or have a minimum stake in it. You or your employees are too close to the business and will likely influence the discussion with your biases.

A friend or relative with people management skills and some business know-how (but no relation to your business) would be ideal for the moderator role.

Once you have your questions and the moderator, get your participants to join-in via video chat. Ask the moderator to initiate the discussion and record the session for future viewing.

It goes without saying that if you can get participants to meet in the same room together, you can skip the entire video chat process.

3. Analyze and implement the feedback

The final step is to analyze and implement the feedback from the discussion.

Start by asking the moderator about his/her general feelings about the focus group. Did the discussion go as planned? Did everyone get to participate or did one person dominate? Was there a diversity of opinion or did they fall into groupthink? What findings, if any, would the moderator draw from the responses?

Next, go through the discussion recording. You can analyze the answers in two ways:

Individual-focused: Gather every participant’s responses to the questions. Map these responses against the participant’s demographic profile. Analyze how the participant’s interests, biases, income, age, and education impact his/her answers.
Question-focused: Gather all the answers to a single question. Condense them into a few short takeaways. Analyze these against the average profile of the whole group. Compare them to individual responses. Does the average opinion of the group clash with personal views? If yes, why?

It’s a good practice to adopt both these approaches. You want an understanding of what the target market thinks as a group as well as individual customer responses.

Finally, draw a few takeaways from your analysis. List the following:

Key benefits of the product
Key flaws and shortcomings
Things that can be improved
Things that should stay the same
Resistance to pricing
Estimated market demand.

With this feedback, you can start implementing changes before launching your niche idea.

Conclusion

Launching a new product or business is seldom easy. You never know how the market might respond to the idea. You can estimate demand based on competitors’ sales and research reports, but nothing beats sold qualitative research.

One of the best ways to conduct this qualitative research is through focus groups. By asking a carefully selected group of people about your niche, you can get a reasonable estimate of market demand, buying preferences and potential pitfalls.

That can help you save money before you launch and ensure that you have an idea that’s vetted by your target market.

Have you ever conducted a focus group study? If yes, we’d learn to love your experience in the comments!

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Jan 3, 2018

About the author

Jesse is the Marketing Manager at Ecwid and has been in e-commerce and internet marketing since 2006. He has experience with PPC, SEO, conversion optimization and loves to work with entrepreneurs to make their dreams a reality.