Observational Market Research: scope, process, and key considerations

Observational market research can be one of the most straightforward methods to conduct independently, but it is not always the easiest to organize.

This method is used for observing how people interact with your product/service, their interaction with an analogous product, or even their behavior in a situation where you think a need for your product might arise.

— Number of Participants: A small group of people, usually in the dozens. We can scale this number to hundreds of respondents with AI.

—Artifacts: Any videos, audio, text, images, user session recordings from web analytics tools, action logs, or your notes.

—Analysis: A simple process: “I observe > I document ‘what happens’ > I spot patterns and generalize.“

— Application: Preparing hypotheses. What problem do people face? How can the experience be improved?

Defining your observational goals

Before starting the research, clearly state what you aim to achieve. This is one of the most important steps. Usually, the most successful observational studies are the result of a well-defined purpose.

Observational research is usually most beneficial in two situations: 1) when there is a specific problem with a product or service; or 2) when you have a wide area of interest and are in search of new product concepts.

Choose the Right Observational Research Method for Your Needs

The core of observational research is its flexibility. There are hundreds of ways to watch and learn, each with its own strengths. Let’s learn about some of the most effective methods:

Online Observational Market Research: Review user session recordings in your app or website. You can use different tools to watch a recording of how users navigate in your website or app. This method is for identifying usability problems.

Offline Observational Market Research:

— Field study involves observing people in their natural environment; home, office, café, etc.

— In-store observation can be incredibly revealing: watching how customers navigate a store, interact with the product, and make a decision to buy.

— “Over-the-shoulder” observation is a more controlled setting; you sit with a person who completes specific tasks, and you ask real-time questions.

There are two categories of observation; the first, non-participant observation, where you watch without interaction; the second, participant observation, where you interact with the people you are studying.

So, you could visit someone and ask them to complete a task connected to your app or website, or even give them the product and ask them to use it. And you can also act as a “mystery shopper” to see your own competitor’s customer service. 

Key factors to consider when choosing a specific observational market research method are the following:

— The research method you choose for your research must be relevant, it must allow you to observe the specific situation that is central to solving your problem.

— The research method should be as natural as possible. The observation setting should resemble a real-world environment.

—The research method should be comfortable for you as a researcher, it should align with your own skills and personality.

Organize your observational research

Once you have chosen your method of observational research, the next step is to organize the research. Dedicate time to observe as many interactions as possible without distraction.

A lot depends on the type of the observational research. For example in-home or lab-based studies may require a formal recruitment process for the users. And if you are conducting observations in a public place like a mall, bank, or café, be ready to be noticed and questioned. For cases like that, you should have a clear explanation. Usually, telling the truth is enough, but there can be instances when you will be asked to leave. Sometimes you have to obtain permission for an observational research from a bank or shop, for example. Usually the client can give that to you, if they want to observe their customers.

Document your observations

One of the most important parts of observational research is documenting what you see. You should not rely on memory alone. The first step in your analysis is to take detailed notes during the observation (or immediately afterward).

Key things to focus on:

— Take notes of the sequence of events in detail. You can log the user’s actions in a step-by-step manner. What they looked at, what they did, how long it took the user to click on a button, where they navigated back to, etc.

— Emotions and behaviors can play a huge role as well. Did they seem focused, hesitant, frustrated, or distracted? These details can be very valuable when you start to analyze the findings.

— You should pay attention to anything that feels strange, confusing, unexpected, or illogical.

Analyze the findings

There are no strict or fast rules for analyzing observational data, but there are some principles. Look for unique behavioral patterns across different participants. When you see something three or more times, it is likely to be a systemic problem that needs to be paid attention to.

However, avoid being too quick to generalize. Do not forget that observational market research involves a small number of the representatives of the entire user base, but the number can be hundreds and more, if we use online methods and AI research tools. The goal of observational research is not statistically significant findings, but it is to generate hypotheses that you can work on and test further.

And finally, observational market research doesn’t give you the answers; it gives you the hints and clues, it is a food for your thoughts. The ideas and innovations are generated in your mind with the help of qualitative data you have gathered. 

With traditional observational market research, it can be difficult to move beyond what the users do into why they do it. That’s where AI research tools like Yasna.ai come in. Think of Yasna as your research partner who helps you scale observations and gather feedback at speed. Yasna will help you uncover the deeper “whys” behind behavior – faster, and more cost-effectively than traditional approaches.

Tips for Observational Market Research

— Set aside your hypotheses and assumptions about the product or service. Every new observation should be approached with curiosity.

— Minimize your interaction. You should not influence the behavior of the user, you are there to see and observe.

—A checklist can be very helpful and crucial in some situations. You can prepare a market research guide for specific actions, words to look for, or emotions. Just mark and continue.

— Treat the users as individuals, be patient; it’s ok that some people complete tasks at their own pace and sometimes slower than others.

— It is very important to document what you see and hear, not what you think it means. Raw and unfiltered data can be very critical when writing a report.

— The question “why” can never be an odd question, so if appropriate, just ask a user why they performed a certain action.

— It is also important to look for not only behaviors that repeat across multiple people, but also behaviors that stand alone. They can reveal unexpected and surprising pain points.

— Analyze with a fresh set of eyes and mind; you may be overwhelmed and skip some important clues. Reviewing the research with your colleagues can be a good idea.