All of that sounds very obvious, but it is remarkable how many entrepreneurs seem to leave such fundamental matters to luck rather than conducting full, or indeed any, market research. As with so many things, the phrase ‘market research’ can cover such a wide range of activities it pays to look into it in a little more detail. So, what are some of the most important steps required and what are some top tips when it comes to market research?
- Gap in the market – Identify a gap in the market. This can often come about from personal experience by not being able to source something that you require, or by having a bad experience from existing offerings. Your idea does not have to be entirely new but maybe simply providing a new twist on an old idea or product.
- Desk based research – start with simple desk based research to identify existing competitors to your idea. This will not only identify whether there is any direct competition or whether there really is a gap in the market, but it will also enable you to identify exactly what is available and at what price.
- Conduct a survey – Conduct a simple survey to as many contacts as possible to start to ask potential customers what they would want to see in your offering and what price they would be prepared to pay. This enables you to better position your own offering.
- Focus groups – Follow up the desk based research and broader survey by conducting a number of focus groups in order to have more detailed discussions with potential customers in your target demographic. These can greatly assist in fine tuning your original idea and helping you to adapt it to what the market wants to buy, rather than what you want to sell.
- Supply chains – market research needs to be conducted not only into your offering and the potential customers but also into the whole supply chain and how feasible it is to source your offering at a cost that will enable you to supply it at a price that the market will bear and will provide you a sufficient margin.
- Business plan – prepare a simple business plan or, at the very least, a full business model canvas, as this will identify all aspects of your business and ensure that your market research covers all the relevant areas.
- Know your customers – Your market research needs to ensure that you fully understand the demographic profile of your target customers, as this better enables market fit. It is always possible to broaden your range of offerings to a wider customer base at a later stage should this be desirable in the future.
- Constant monitoring – All of the market research that is conducted at the start of your entrepreneurial journey, or at the launch of a new product or service, should also be conducted periodically on an ongoing basis. This will ensure that you can monitor the competition, changing customer or market behavior, and help you to spot future trends in time to react to them.
- Customer feedback – Never be afraid to ask for customer feedback. Ask what they like and what they don’t like. Ask how what you do can be improved. Use this invaluable information to guide you in the future.
Knowledge is power. And the best way to gain knowledge in business is by conducting market research. This knowledge will give you and your business not only the best chance of success, but it should also lead to fewer mistakes and higher margins. So don’t leave it to chance.
5th July 2022