Start with Market Research
If you plan to sell to a particular market, it's important to know all about that market. Research means finding out what customers want, don't want, and why. Surveys, questionnaires, and focus groups are a few ways to find out the needs and desires of your potential customers. You may also be able to tell a lot about your customers by observing them and taking note of who they are and what they're interested in when they're in your store. Get some basic information when they call for your services or browse your website. When customers make a purchase or any kind of inquiry, you can ask them where they heard about your business. Have you ever been asked for your zip code when you are checking out at a chain store? They capture this information to learn where their customers are coming from to shop in that store.
There are many factors that will impact on your marketing plan, including the following:
The type of products or services you're offering
Your scope (are you selling locally or going on the web to handle worldwide sales?)
The amount of volume you can handle
Your methods of distribution
The amount of personal service you are able to provide
How quickly you expect your business to grow
Consider the unique attributes of your business while designing questionnaires, surveys, or any other type of research-gathering materials. For example, if you're planning to do business worldwide, be prepared to conduct surveys in other languages and be aware of cultural nuances that may affect how your product is perceived.
Market research can tell you many things. You can learn about the pricing, trends, and competition in your industry. You can gain a greater understanding of the actual value of what you're selling in the market, meaning what people are willing to pay. You may also uncover trends in the marketplace that can be advantageous. For example, if surveys indicate that healthy foods are the hottest items on the menus for the lunch crowd at competing restaurants, then perhaps you can have a special fixed-price health lunch, and even offer calorie or carb counters and other health-related information at your dining establishment.
What is the difference between primary and secondary research?
In primary research, you gather information from surveys, questionnaires, tests, focus groups, and other direct means. Secondary research draws on other sources, such as data services, the census, books, magazines, or websites. Primary research is more precise because it is tailored to the exact questions you want answered. Secondary research is faster and cheaper. Ideally, you will use both.
Look at trade magazines and reports from organizations and groups in your field to get the latest industry news. Visit websites and subscribe to such industry publications. If your business is local, you need to know the sales trends in your community. Libraries, websites, company reports (annual or quarterly reports from public companies), and the local chamber of commerce are just a few places to look for local business information. Manufacturers will want a broader picture, depending on how large they anticipate their customer base will be.
Keep surveys short (ten to twelve questions maximum), whether they're given online, in-person, or by telephone. Phrase questions in a straightforward (nonjudgmental) manner, with neutral language, and keep questions one sentence long. Keep it relatively simple and even entertaining if possible, so respondents will want to continue. Get the age, sex, and approximate income level (provide ranges to select from) of participants. People are more likely to fill out a written survey or answer questions in person because they consider telephone calls annoying. Internet surveys are considered particularly valid for a backward reason. According to Larry Zussman, director of One-to-One Marketing for Xerox, people responding to them tend not to lie or give what they consider the “right answer” because they perceive the responses do not matter.
Focus groups are wonderful ways to get insightful answers to questions and opinions about your product. You will want to have a neutral group in a neutral location with a neutral host and provide a pleasant atmosphere—sometimes including snack foods. Often focus groups are watched through a one-way window or mirror or taped for future evaluation. Keep the session to an hour and a half or two hours at the most.
During the time of the session you want to get the most meaningful feedback possible. The facilitator conducting the focus group should press the participants to give specific feedback. For example, if you have an independent financial planning service you have to charge fees. The folks in the focus group might not like the idea of paying a fee, but when pressed, may acknowledge some fee has to be charged. The focus group goal might be to establish the threshold of tolerance for your fees.
It's vital that your market research studies provide a close representation of your target audience. In fact, by your third focus group or series of surveys you may be intentionally including 90 percent men or 90 percent women because that percentage most accurately profiles the population buying your product or using your service.
Know your product, know (or learn) your market group, and then test the product on the right group. For example, if you're testing your new wedding planning website, test it in front of engaged couples or engaged women, but not in front of a room with 50 percent divorced men who have no interest at present in getting remarried.
Keeping close tabs on who buys what product or service is a way of gathering information. Are all your credit card receipts from the same zip code? Do customers always seem to visit the same pages on your website? Simple statistical information can be gathered by tracking your business transactions. This can provide market research information and help you define your target audience. You might simply notice on your store video camera that the last sixty-one customers who bought items were males in their early to mid-twenties. Pay attention and you can gather inexpensive marketing data.