If you’re like me, you have a great idea for a business, but you may also have these questions:
- Does my product or service solve some a problem within the market? Who are my customers?
- Who is my competition? What should I be charging? What are the trends within the industry?
These are the things I learnt this week at Kauffman Fasttrac in learning about market research:
Market Research involves gathering data on your customers, competitors, and the industry.
This is to find out whether your solution will meet customers’ needs and size of the market.
Market Research helps you identify opportunities that makes you stand out in the industry.
In this post, I talk about why you must talk to people and speak about your features/benefits.
I also talk about how to conduct market research and how to create your customer profiles.
Finally, I talk about your competitive advantage and where to go to for additional resources.
Talk to People
The first thing to do is to talk to people who know your customers, competitors, and industry.
There is a variety of people to talk to. Here are some people that can help with your research:
- Potential customers: Reach out to those you think want your business and see what they say.
- Industry experts: These are people that know your market well having been in that industry.
- Entrepreneurs: They’ve experience identifying opportunities, what works, and what doesn’t.
- Your personal network: If you’ve built good relations with people, they may be able to help.
- Social media: You have access to thousands of people. Think how you can gain many insights.
- Trade shows: Great way to find your customers, competitors, and trends all in one location.
As you can see, there are a variety of research methods you can take, the more the merrier.
Don’t just rely on your perspective; talk to people who you think will want to buy from you.
Features and Benefits
When talking to people about your product or service, talk about its features and its benefits:
Features: These are the few items that your product has or the characteristics of your service.
For example: features of a smart phone might be the touchscreen, side buttons, cameras, etc.
Benefits: These are the positive outcomes that result from your product or services’ features.
For example: touchscreen allows you to control your phone, side buttons control sound, etc.
All products/services have a purpose, but not all of them have the same features and benefits.
Remember, customers buy products and services in order to solve a problem or meet a need.
Customers don’t care about your features/benefits, all they’re thinking is: what’s in it for me?
Unless your product or service solves their problem or meets their need, they will not buy it.
When talking to people, make sure to specifically highlight the features and benefits for them!
Conduct Market Research
Market research is about finding answers to questions so you make smart business decisions.
Some answers you will find by speaking directly to people – this is known as primary research.
Some of the answers you’ll find through simply searching online – this is secondary research.
Here are some of the many methods you can use to get valuable information from customers:
- Surveys: An inexpensive and effective way of getting customer feedback with a questionnaire.
- Interviews: These are more personal and involve gathering info from customers one-to-one.
- Focus Groups: This involves speaking to customers as part of a group, instead of individually.
- Observations: This is where you observe customers without talking, and then ask questions.
You may be tempted to just do secondary research, as it is more comfortable than primary.
However, talking to real people can be much more insightful than simply researching online.
Who is your Customer?
Once you have identified your target market, you can then begin to create ‘customer profiles’.
Customer profiles help paint a clearer picture of your consumers. There are 2 ways to do this:
- Demographics: These are variables that can be measured by your customers and compared.
Examples of these include the age, gender, occupation, education level, income, location, etc.
- Psychographics: These are non-tangible variables that a group of users can have in common.
Examples of these include values, beliefs, buying patterns, perceptions, lifestyle choices, etc.
Once you know who your target customer are, have a go at creating a few different profiles.
For example: Jake is 30 years old from London. He is a market manager who loves fishing, etc.
Another example: Alice is a 25 year old blogger from Iowa. She loves nature and animals, etc.
Creating these customer profiles will help you craft your marketing and target your audience.
Who are your Competitors?
As part of your research, you should find out as much about your competitors as is possible.
There are many types of competitors. Use these explanations to see which ones apply to you:
Direct competitors: These businesses sell similar products or services in the same market.
For example: McDonalds and Burger King, Boots and Superdrug, Tesco and Asda, and so on.
Indirect competitors: Businesses that sell other products/services that meet the same need.
For example: McDonald’s & Burger King are direct competitors; KFC is an indirect competitors.
Invisible competitors: Sometimes your biggest competition are your own actual customers.
For example: You open a gym with no direct/indirect competitors but you need users to come.
Future competitors: You may not have a competitor now, but how long till someone comes?
You may have the lead/advantage now, but with all new challenges comes new opportunities.
Your Competitive Advantage
Your competitive advantage is why customers will buy from you instead of your competitors.
There are six ways that you can stand out and differentiate yourself from your competition:
- Core competencies: These give you an edge over competitors, by providing customers value.
- Quality reputation: Your focus on quality will give you a key reputation within your industry.
- Niche market: Offer products and services that target very specific areas within your market.
- Distribution channels: Use a selling method that is unique and hard for competitors to copy.
- Organisational efficiency: Streamline your processes and look for ways to improve efficiency.
- Innovative Technology: Use unique, leading tech to market, sell, and better serve customers.
In order different yourself, take the time to analyse your existing competitors in your industry.
By doing so, you will know what is missing, and how to choose your competitive advantage.
Purpose of your Idea
After doing market research, you will know what your product or service is to your customers.
- You will know whether your idea solves your customers’ problem or meets an inherent need.
- You will know who you competitors are and what your new completive advantage would be.
- You’ll know what are the features and benefits that will really stand out with your customers.
When you seek investment, you will be able to pitch with clarity about your idea to investors.
If you want to learn more about market research, check out This is Marketing by Seth Godin.
If you don’t know Godin, he is a marketing genius, first made famous by his book Purple Cow.
What is your favourite or worst part of market research? Please share in the comments below!
If you’ve enjoyed reading check out my other post: How to Turn your Idea into a Business Idea.
If you have any suggestions for future blog post topics, please share in the comments below!
