Profitable Market Research – The Top 7 Reasons You Must Do Market Research (Even if You Think You’re Too Busy)
If you’re a startup or small business owner, selling, shipping, and payroll get your attention. What about market research? It should, especially if you like to win.
You do like to win, don’t you?
In this article, I’m going to give you 7 reasons why market research is too valuable to ignore. Effective market research doesn’t just allow you to grow a thriving business quicker; it allows you to kill off a bad business idea before it sucks the life out of you. It’s glorious to watch something you love grow, but it is excruciating to watch something you love die. To make smart choices, you need market research.
TIP 1 – Discover Your Target Market. Many people create a business to make products or sell services, then try to find a market for them. This is backwards and a terrible idea. You should find the market you want to work with first, find out what they really want and need, and then create products or services for them. If you do this in the wrong order, there’s a good chance your business won’t make it.
Near my house there’s a monument to this phenomenon: a retail space where the Grand Opening sign is put up every six months or so. It was a Curves. Then a Mexican restaurant. Then Greek, then Italian, then Thai. Then a coffee shop. The “for lease” sign is up again. Why? Because instead of asking, “I wonder what market exists and if I can build a business to meet their needs,” these owners said (in effect), “I think I’ll dump my life savings into a business and see if anyone shows up.” And they didn’t.
TIP 2 – Get to Know Your Potential Customers. Market research will help you get to know your potential customers. Steve Blank says, “There are no facts inside the building so get the hell outside.” The same applies to your potential customers. You think you know them, who they are and what they want. Go talk to them and find out.
TIP 3 – Confirm Your Ideas. Once you get to know your customers, you’ll have a pretty good idea about the direction you need to take your business. The next step is to develop an offering, scaled down to the bare minimum, and take it out into the world to see if anyone will pay for it. Will actual customers buy it? Besides your mom, I mean?
TIP 4 – Develop New Products and/or Services. When you know what is going on in the marketplace and what is working in your business, you’ll get more ideas about other products and services that your audience needs. You may get ideas from your customers, from reading industry news or from watching what your competition is doing.
TIP 5 – Determine Who Your Competitors Are. It’s important to identify your competitors so that you can keep an eye on them and what they are doing. You also need to know the alternatives your potential customers have outside of your business type. If they don’t buy from you, are they buying from someone else or not buying at all?
TIP 6 – Avoid Marketing Snafus. Business owners who avoid market research are prone to making horrible marketing mistakes. They are at risk of believing their own biases. If you want a laugh and a cringe or two, see Ad Week’s list of advertising and marketing fails.
TIP 7 – Identify New Trends. As you’re doing your research, you’ll identify new trends that are happening right now. These trends may be opportunities to engage or avoid, but awareness will allow you to position your business for success.
In Good to Great Admiral James Stockdale is quoted as saying “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” You may think you know your customers—you might be wrong. Do your market research and stop guessing.
If you’d like to know more about market research, what to do and how to do it (along with common mistakes to avoid), bookmark my site or sign up to be notified when a new blog is posted (look for the red button that says “SIGN UP NOW!”). I will be posting a whole series of valuable how-to tips and tricks about market research and I don’t want you to miss any of it.
Lastly, if you have specific questions about how you can do market research to make your life and business better, contact me and let me know how I can help.