So you think you have a great idea for a product or service, something that’s sure to grab the hearts (and wallets) of consumers everywhere. Or perhaps you’ve happened upon a service that isn’t being offered by anyone else, one that’s desperately needed. Before you go full throttle into your new business, you must discern whether or not there really is a market for it. Truth is, if you’re the only one interested in the product or service you’re planning to offer, you’re not likely going to succeed. This is why it’s crucial to conduct market research. Many business owners tend to overlook this critical step in product development for the sole reason that they don’t want to hear that they may need to make changes.
They’re sometimes convinced their product or service is unique and flawless just the way it is, and they don’t want to come to terms with anything that might challenge that belief. Other entrepreneurs avoid market research out of fear it will be too expensive. However, it’s important to consider market research an investment in your future. If you make the appropriate adjustments to your product or service now, it will save money in the long run.
Andrew Faridani, CEO at BreezeMaxWeb says, “If you’re not doing market research, what needs to be remembered is it’s very likely your competitors are. And the business with the better understanding of what a consumer needs and wants is going to come out on top.”
There are three primary areas new business owners should focus on when conducting market research:
Industry Information: Take note of all the latest trends in the industry, directing attention to what’s happening now as well as what’s planned or projected to happen in the future. How does your business idea fit into the future of the industry?
Consumer profile: Who is buying your product or service? What are their problems and pain points? What are their needs and interests? Getting a specific image of your buyer will help you target your research and marketing efforts.
Competition profile: What are others doing in your industry? What’s working well for them and what isn’t? You might feel your idea is original and special, but it could be based on something that already exists in the market. Pinpointing this will help you research your competitors.
Assessing Market Interest
One way to evaluate market interest is through individual interviews as well as Q&As and surveys. You can use social media and focus groups to question a suitably large sample of people that fall within your target market, and explain what you have to offer. The larger the sample, the better your assessment will be.
Ask them questions like:
Does this product or service interest you?
At what price would you feel comfortable purchasing this?
How likely would you be to share this product or service with a friend?
But....Don't Just Take Their Word For It
Before you get all excited about the consumer feedback you’re getting from surveys and interviews, one thing to keep in mind is that what people say and what they do are often two very different things. “The world’s most deadly fluff is: ‘I would definitely buy that.’ It just sounds so concrete. As a founder, you desperately want to believe it’s money in the bank. But folks are wildly optimistic about what they would do in the future. They’re always more positive, excited, and willing to pay in the imagined future than they are once it arrives,” says Rob Fitzpatrick, author of The Mom Test: How to Talk to Customers & Learn If Your Business Is a Good Idea When Everyone Is Lying to You. To fully understand how your potential customers think and feel, you need to go beyond words. Don’t just listen to what they say, watch what they do.
Conclusion
You always want to keep your eye on how your target market is moving and how fast or slow it’s growing. Consider any external socioeconomic trends, as well as domestic and international events that influence your product or service. For instance, food products or transportation based services may be more vulnerable to severe weather situations. It’s always a good idea to turn to governmental and professional industry sources for information on data such as expected production patterns and consumption habits. Market research can be instrumental towards determining the size and scope of your market, and it plays a big role in starting your own successful business.
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