We have worked with many entrepreneurs, many of them have significant experience and others are brand new. A key difference that we have witnessed that the most successful entrepreneurs all share is the understanding of the importance market research. By market research, we do not mean macro-economic research such as the growth of an industry or total revenues.
While this may be important, such as for a new pharmaceutical drug that has a limited potential patient base. However, customer based research is even more important when building a service or a product. At Pro Business Plans, we started business with a clean slate. Our plans have been fully structured based on feedback from our most impressive clients, investors and banks globally. This post outlines some methods of gathering research at various points and applying it directly to making more money.
Before jumping into any idea, determine if there is a specific problem you are solving and what people are willing to pay for it. This may be done online through targeted polling software, which may be found for free on the internet. Focus groups may also be generated, which will entail more effort but also enable your company to understand more about what the market wants specifically and how to deliver it to them. Another approach to achieve market viability is to call targeted individuals and ask a series of questions. This is particularly helpful in industries where your demographic is very broad in either the B2B sector or the B2C sector. It is very surprising how many individuals are willing to happily answer a small amount of questions for research purposes.
There are significant areas in product refinement by structuring a product or service specifically around the customer. Too often companies are structured around the entrepreneur and team’s preferences and personality or what they believe the market wants. While this worked with Steve Jobs and the iPhone and the world’s first automobile, today phones and cars are always based around what the market wants.
We have seen phones getting smaller and now the trend is reversing, all because phone companies gather information on what the market wants. This is proof of the importance of regularly conducting research because the market preferences may change over time. Before internet and application accessibility, people wanted smaller and sleeker smartphones. Now that they read the news, play games and interact on social media sites the screen size has increased.
Speaking With Your Customers
The best way to determine why people by your product is to understand why they do, compared to the competition. Unless your company is seeking a cost leadership position, it is differentiating itself in some form. By understanding what aspects of this differentiation specifically, it is possible to refine upon this and use it on promotional strategies to promote the key benefits. It will also help to understand the demographics and psychographics of the market so that your marketing and promotional efforts may be much more targeted.