“If you build it, they will come” is a myth. When evaluating the likely prospects of a business venture, new product or service, or entrance into a new market, good market research is your non-negotiable Step One. The ability to create and sustain profitability must be demonstrated up front, in advance of committing time and money to its launch. The only way to reliably predict whether your shiny new idea has broad appeal is to carefully research the marketplace and examine the story that emerges. The good news is that if you are onto something, market research will help you define the size and potential of the market; decide how and when to enter it; reveal how target customers prefer the product or service to be described, packaged and delivered; the acceptable price range; and show you how to achieve market penetration and profitability goals faster.
Many decision-makers are uncertain as to the type of data that is relevant and the advent of big data has unfortunately complicated matters. There is copious data available, but what will help your team to make the best decision? Dionne McPhatter is a market research guru and co-founder of The Strategy Collective, a New York City and Los Angeles marketing firm that builds custom analytics that help clients better understand their customers and make more informed business decisions. McPhatter recommends that decision-makers identify what is called in market research circles the “path to purchase” and arrange for the product or service to touch as many “landmarks” as possible.
Some relevant data is free, or inexpensive. Google Trends is free and a decent place to start your search and learn how many people in your city last year searched key words associated with the product or service (I found the now-defunct Google Wonder Wheel far superior, however). Learning about competitors who provide your service, or something similar or complementary to it, is also revealing. Tour a few of their websites and figure out business models and marketing messages. If you are thinking about launching a business, you will write a business plan and do lots of research. Contact your local library to learn about business reference material such as industry magazines and demographic information.
Further, there is value in spending some money and visiting professional organization meetings and attending conferences, so that you can meet prospective clients and learn the expectations and value they place on your product or service. Listen and learn and discreetly take notes.
As you collect and examine data, a picture of the target customer groups, competitors and the overall marketplace will begin to emerge. The downside is, those who amass a large amount of data can become confused about what is relevant: the data threads may be too numerous to easily prioritize. The challenge of decision-makers is to discover the relationships and triggers between the data points and eventually see what motivates clients along the path to purchase. From there, you can confidently develop goals and objectives, strategies and action plans and a business model that will build and sustain a profitable launch.
Thanks for reading,