Market Research 101

Cindy DonaldsonEntrepreneur, Featured, Marketing, Must Read Blogs, UncategorizedLeave a Comment

market research

Just because YOU think your business idea, product or service is brilliant and worth a gazillion dollars doesn’t mean the rest of the world will.  The sad truth it, something is only worth what someone else is willing to pay for it.  Ask any Real Estate agent – they deal with this on a daily basis. 

When it comes to launching a new business or a new product you have to test it.  That means market research.  How that is done will vary dependent on your product or service.  If you’ve just developed the latest greatest ice cream, then you better hit the streets and give away a lot of it, ask for feedback. Rinse and Repeat.  Next you need to do tastings in stores, farmers markets, flea markets anywhere you can get in front of your target audience.  Get feedback. Rinse and repeat.  If you have a target price in mind – ask the people who liked your fabulous treat if they would be willing to pay that price.  If the stars align – you are ready. 

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Say you have a service – like what we do here at Red Barn.  We are a business and marketing consulting firm.  When we decide to tap into a new market or launch a new program we do a crap load of market research.  We will do workshops, bring in beta clients, write articles, talk to people – all the while collecting valuable data.  Just like the ice cream we are not only looking for the good feedback, we want to hear the negative.  We want to know how we can improve.

Next you really need to understand your market – how large is your potential market base?  Who is your ideal client?   If you need 1000 customers to break even yet in your research you find you only have 2 that would be potential clients, well – Houston we have a problem.   

Here’s the process we go through

  1. Identify our Target Client Profile. We are very specific on the socio and psycho demographics of the people, business etc.  I want to know every detail – do they like dogs, do they live in the US, what is their income, do they travel, what is their age, did they go to college…the more details the better
  2. Crystal Clear on our Deliverables. Based on our market research we hone down on exactly what the customer WANTS and how they want it delivered.  So what does their customer experience and journey look like.
  3. We make sure we are profitable.  Giving a good deal isn’t worth it, if you are losing money.  We may offer extra perks or even slight discounts to our early adopters, but our cost…is our cost.  We spend a lot of time ensuring that we understand our COGS and our time.  If we aren’t in a margin that works, then the project doesn’t fly.
  4. We want to spend time with our early adopters to ensure things are going smooth and we scale slowly.  The worst thing any company can do is scale to fast, and get into a situation where you can’t deliver what you promise.

Morale of the story:  Do the research before the launch. This goes for launching a new business or a new product.  The process is essentially the same.  If you don’t, you’ll end up with the proverbial egg on your face. 

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