Researching the market is one of the most crucial parts of starting any business, whether you’re an entrepreneur or part of a larger corporation. You need to know what your audience wants, how they use products like yours, and if there are any competitors that might be a threat to your success. To do this successfully, it’s important to follow these best practices when conducting your market research to ensure that you gather reliable information and end up with an actionable plan going forward.
1) Who is your audience?
First, you need to identify your target audience. This can be difficult if you’re just starting out because you don’t have a customer base yet, but try to think of specific demographics that would be interested in your product or service. Determine how much money they make annually and their ages. Where do they live? What is their level of education? What is their gender? Where do they spend most of their time online? Use tools like Google Analytics and Alexa to find out more about them.
2) Survey vs focus group?
There’s a big difference between an online survey and a focus group: A focus group is when you bring people together in one room and they discuss ideas. With surveys, people aren’t necessarily talking to each other, but they’re responding with their opinion.
If you are starting out in business you can try both to find out how your potential clients think about everything from the services you plan to offer, the look and feel of your brand, the location you plan to work from and your potential pricelist. Getting a wide range of views, but directly from the type of people you would like to attract as customers is key;
3) Know who your competitors are
While conducting market research, spend some time learning about your competitors. Learn what they’re selling, where they’re selling it and how much it costs. You can check out their websites to get an idea of how large or small they are in comparison to you—and, most importantly, how large your audience will be (and thus how successful your business will be). If you don’t know who your competitors are yet, then start with a quick Google search. This is one of the most basic best practices for market research.
4) Find out about the size of the potential market
Once you have established your target clients and your possible competitors, you need to understand what that means for your market size. Growth of that market is key too. Understanding the size of the market and if it’s getting bigger or smaller, means that you can start looking at whether or not it’s possible to penetrate that market and what barriers will be involved in doing so. The rule of thumb with market research is bigger is better: If there are more customers for your product or service than you had originally estimated, it’s a good sign that your business idea has legs.
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