Doing Effective Market Research
You’re working hard, spending time, effort, and money creating and developing your business only to find out an identical product or service, and worse, nobody wants to buy from you. How can you avoid this huge mistake?
You cannot depend on the advice of your friends or relatives on what is a good product or service to offer. Getting valuable, honest and dependable information would come from a number of people from your target market or from a section of the public.
According to research done by CBInsights, 42% of startup businesses failed because there was no market need for their product or service. You can see the top 20 reasons they cited for business failure below.
Source: Fortune Magazine
Forty-two percent of people failed to do enough market research to know that nobody was going to buy from them!
I hope this puts the importance of doing some effective market research BEFORE you do anything else into perspective.
Simple ideas on market research
Market research can be done in a lot of different ways.
You can start online from the comfort of your home or office (see resources below) and go all the way through to one-on-one interviews, surveys, focus groups or product/service tests or written questionnaires.
BONUS: Click here to download your FREE copy of our Ready, Set Business! Guide that shows you how to do effective market research, and takes you step by step through starting your own profitable business.
First up, let’s look at some online resources you can use to check if there’s actually a demand for your product or service, and who’s already successfully selling something the same or similar.
There’s no step-by-step way to do this. It’s really just old fashion detective work, but online so you can do it any time from anywhere. Your ability to read between the lines and think outside of the box will dictate the kind of results you get back.
Hot Trends (Shows you what’s hot right now and the trend it’s been on)
DoubleClick Ad Planner (What are big advertises buying? This gives you a clue because people won’t spend a lot of money on ads if they aren’t profitable)
Wolfram|Alpha (Computational Knowledge Engine)
Shopping.com Top 100 Searches (Consumer Demand Index)
Quantcast (Ranks the top websites and gives you intelligence about what they’re up to)
Social Bearing (this is a search engine powered by tweets)
TestTube (Insights into the latest ideas YouTube is testing now)
Dummies Research (what topics have they published books on? These are usually in the biggest selling, most profitable markets)
Survey Monkey (Ask people what their frustrations, pains, desires, wants, and needs are.)
Twitter Search (this is a BIGGIE!)
Nose around. Check out what other people are doing.
Also use these search strings on Google:
[topic/niche] +forum (example)
[topic/niche] +discussion (example)
[topic/niche] +community (example)
[topic/niche] +blog (example)
If you already have an email list (and you should) then survey them. Use SurveyMonkey.com or just email them and ask them to click the reply button.
You’ll get lots of insights even if you only use a few of these resources. What you are looking for is healthy (not overwhelming) competition.
If a market doesn’t have a lot of competition it usually means there’s no money to be made there. If there’s too much, you won’t be able to compete.
Using Questionnaires or Surveys
Start your questionnaire with appealing questions to encourage respondents to complete it, because generally most people look on the first few questions before deciding to continue in answering. You should keep your questions as simple, comprehensible, significant, and interesting as possible.
Any jargon or technical terms should be explained, and misleading your customers to the answers you want through prejudiced questions should be avoided. People will more likely complete your questionnaire if it is straightforward, precise and quick to complete.
It is advisable to ask people who look to have the time to answer and are not in a hurry when doing face-to-face surveys. And even if they refuse to take part with it, you should still be nice and friendly towards them. Always remember to use simple and concise questions that are easy to answer and show gratefulness to your respondents for their time by thanking them.
Focus groups are useful to discover people’s perceptions, attitudes, beliefs, and concerns towards new products, services, concepts or marketing ideas. These are usually done for a fee by marketing companies for a business client.
A focus group is an interview conducted by a trained moderator among a small group of respondents who meet in a conference room. The moderator guides the discussion and asks questions, and respondents are free to give views from any aspect.
The feedback and results of the interview will be provided to the business client so you can make plans to move forward or adjust your business idea based on the feedback you receive. The disadvantage of a focus group is that since they usually only for few respondents, the results may not represent the larger public opinion you’ll find in the marketplace from a larger sample size.
Whatever approach you choose to use, your research results should give you a good idea of the following:
- Buying attitude and behaviour of customers
- Potential demand for your product or service
- Consciousness and awareness on your product or service
Now that you have an idea of who your market is and what they want to buy, you can use this information in your development, marketing and promotional activities.
- Choose the best market research approach which will be best for your business.
- Dig down using some of the online resources listed above
- Run a face-to-face survey
- Create a written questionnaire
- Focus group
NOTE: This month we’re holding a limited number of Free Business Strategy Sessions designed to show business owners how they can start, manage and grow their enterprises with the least amount of cost and disruption possible.
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