When you have a great idea for a business, it can feel like the world is your oyster. You’ve identified a gap in the market, you know exactly how you can fill that gap, and now you just need to get started. Researchers may cringe at such naivety, because any new business venture needs extensive market research before you spend your own money or invest other people’s money.
It’s not enough to just be sure that people will buy what you want to sell; you need to know why they will buy it, how much they will be willing to pay for it, and how much demand there actually is for your product or service. If you launch your business without doing this research first, there’s a good chance that it won’t succeed—and the sooner you find that out, the better.
Define what you want to know
Before you start any research, you need to make sure that you understand what you want to find out. This will help you to focus your research efforts, making sure that you use your time and budget as efficiently as possible. This is particularly important if you’re working in a team.
If everyone has different ideas about what they want to learn from their research, you’re going to end up with a jumbled mess of conflicting information—which isn’t going to be of much use to anyone.
Know your audience
If you’re selling to businesses, then you need to know who your customers are and what their buying habits are like. You’ll also need to understand what their pain points are – what’s preventing them from buying your product now?
When selling to consumers, you need to know what their purchasing habits are like, what trends are driving them to make their purchases, and what kinds of things they are likely to buy instead of your product. You also need to know what their pain points are – what drives them to buy other products instead?
Check that there’s demand
If there are already similar products on the market, you need to know how they are doing. Are they selling well? Are they making a profit? Are they struggling to keep afloat? You may have the best product in the world, but if there’s no demand for that product, you’re not going to make any money.
To find out how your competitors are doing, you can look at a range of data sources, including – The company’s own financial data, for example revenue and profits. – Review websites like Trustpilot or Shopper Approved. – Surveys and questionnaires from unbiased sources such as YourCustomers.
Watch how people respond
If you’re selling to businesses, watch how they respond to your product or service. You may have a great product, but if you can’t deliver it, or if your customer service is inadequate, then you’re going to lose that business.
If you’re selling to consumers, you can make some observations about how they respond to your product. When you’re setting up your business, you can make sure that you’re in a position where you can closely observe your customers.
Ask your current customers
If you’ve already got some customers, then you’re sitting on a treasure trove of information. You’re already getting regular feedback from them, so why not ask a few extra questions? What would you like to know about your customers? How much do they really use your service? What are they using it for? What would make them use your service more frequently? What would put them off using your service entirely?
Survey prospective customers
If you’ve not yet launched your product or service, you can still get valuable information about prospective customers. If you’re selling to businesses, you can ask them to fill in a survey, either in person or online. You can ask them about their pain points and what would encourage them to buy from you.
If you’re selling to consumers, you can put together a short survey that asks them about their needs and what would encourage them to buy your product.
Summing up
Market research isn’t a one-and-done project. You’ll need to keep your finger on the pulse of your business and make sure that you use the right research techniques at the right times. What kind of research should you do when? – When you have an idea for a business, you should do initial research to make sure that the concept is viable.
If it is, you can do more in-depth research to find out more about your customers and competitors. – When your business is up and running, you need to keep an eye on your competitors and see how your product is performing.
You can also use research to find out more about your customers and how they are using your service. These are just some of the ways that you can conduct simple market research. There are plenty of other ways to gather information, and you can choose the ones that best suit your business and your budget.
