People often come up to me and say, “I’m not making any money in my business”, and it is usually because they have not done enough market research or even none at all! As I have mentioned many times before, Forbes magazine states that 90% of Start-ups fail within the first 3 years, so I have put this blog together to educate you about why market research is necessary for any business to evolve because if nobody actually buys what you are selling, you don’t have a business, you just have a good idea. As the saying goes, ‘offer what people want to buy, not just what you want to sell’.
I spent 15 years working for Yellow Pages as one of their top sales executives yet they did not change at the same pace as the rest of the market during my time there; they thought they would always be the market leader in the business directory field, however when the internet came along this changed drastically. This reinforces the idea that it doesn’t matter what stage your business is at; market research is imperative for all.
What is market research?
Market research refers to gathering knowledge from your potential customers about the viability and feasibility of your products and services – it’s an amazing way of discovering your customer’s needs and desires. However, as Steve Jobs once said, ‘people don’t know what they want until you show it to them’ so it is important to recognise that there is a balance to be found in what customers want and what businesses can provide – social media offers a perfect platform for this.
What does market research involve?
There are several pieces of information which you will need to test the feasibility of your business, for example:
- Will people want to buy your products or services?
- Are they going to pay what you need to charge?
- How do you know what you have to charge?
- Who are your competitors?
This will ensure that you do not make what I call the ‘chocolate teapot’ mistake – when businesses invest their time and money into something there is no demand for. It’s important to remember that time is your most valuable resource – there is no point in making products/ services that no one wants in the first place.
How do you do market research?
There are many different ways of doing market research so it’s important to recognise that there is no one right way of doing it, I find it best to use a combination of methods:
- Online polls – this is a simple and quick method of gaining data. We use our Entrepreneurs Can Clan Facebook group and other online platforms to give existing and potential customers the ability to voice their opinion on what they would like from our services and products. Facebook polls also allow respondents to create their own option which again gives insight into their needs and desires. Polls also allow for an easy quantification of ideas.
- Surveys – Questionnaires offer opportunity for a deeper understanding of respondents’ answers as they can justify their opinion, allowing for a follow-up if respondents have agreed to do so. Survey Monkey is a great free tool for this as you can attach it to your client mailing list and share it with other businesses when necessary.
- Focus groups – these provide a great way to get group feedback which can be a spring board for new ideas.
- Direct contact – customers are more likely to provide genuine feedback for your market research if you approach them directly.
When conducting market research, it is important to recognise that not everyone will respond so don’t worry if you receive a low response rate – at least you are increasing your brand awareness and getting your name out there!
An example of our marketing research techniques
In the Entrepreneur’s Godmother, we always try to conduct market research when making our products because we understand that to be successful, we have to cater to the needs of our customers. For example, on our Facebook group, the Entrepreneurs Can Clan and other online platforms, we have recently posted a poll to explore what customers would like to experience in our E-learning platform which has produced some exciting results and sparked lots of idea. Watch this space!
So how well do you really think you know your customers? If the answer is not very well, then my advice to you is to get out there and do your research!