Market research 101: why this little product gets to market, while this little product stays home
One thing’s for certain, there sure is a huge gulf between that great new idea and that great new successful product, so Idealog cornered Nicole Crump, managing director of marketing consultancy TactixICT to find out just what it takes to make the leap from start-up dream to real McCoy market leader.
Idealog: So many businesses are bursting with great ideas. But with so many fantastic innovations never actually leaving the drawing board, what are businesses missing when it comes time actually get their products in the hands of customers?
Nicole Crump: Too many businesses make the mistake of not understanding what their market actually is, and that comes down to a lack of market research. The companies who take the time to do the research are the ones that leap forward in the market, because those insights give you a true picture of your customers and their motivations.
I: So what, specifically, are we looking to understand with market research?
NC: What we’re really trying to do is answer these questions: Who are your likely customers and what do you need to offer to be unique and of value to them? If you don’t offer something people need, you’re not going to make any sales.
For many innovators, that’s the problem itself. When you’re really close to a product you can become quite single-minded about what you think is important in the market, and it’s easy to get that quite wrong. That’s why market research is so valuable.
I: So what does typical market research actually consist of? How can I find out what my market is actually like?
NC: The first step is to identify who you think potential customers could be. If you’ve got a prototype that’s been built, then it’s easy to conduct trials with these people and gather feedback that way, but other times you’re working purely off concept, so it’s a case of calling potential customers, and setting up times to talk to them about why they may, or may not, want your particular service.
It doesn’t have to be complicated. If you’ve got a business with a new product line or service you want to offer, then you’ve already got a customer base you can talk to. Alternatively, you might have people engaged with you through social media. So talk to them. It doesn’t always have to be expensive.
I: Okay, so I’ve talked to my customers and gathered their feedback (they love me). What’s next?
NC: The next step is to look at your distribution channels. Is the product something you can sell online? Do you need a bricks and mortar store? How are you actually going to get that product or service into the hands of customers?
Then once your distribution channels are established, you’ll need to develop a pricing strategy. Are you offering so much value you can price yourself as a premium option? If so, you need to actually tell your customers why you’re pricing yourself that way. If you’re going to compete on price – and that’s a valid strategy too – you’ll need to think about who you’re competing against and how you’re going to manage your margins as the price drops.
I: I’ve got my product, I know my market, understand my distribution model and I’ve set a price. Should I just go ahead and buy some ad space now?
NC: Not so fast. You may know who your customers are, but do you know where you can find them? Are they online? Are they driving? Do you need to contact them directly? Tradeshows? TV? Do they have a relationship with someone who you could partner with? Answer those questions and you can very quickly determine where you need to be.
Then, what will you say? How are you going to tell the market that you exist and that you’ve got something they want? This will all be informed by your research. The research will give you a huge clue as to what you should put into your communications.
And that’s the really exciting part. Doing your research actually takes away a lot of that guesswork. When you’ve got that feedback, you know the market, and you know what you have to deliver – that’s incredibly powerful.
I: Any advice on what my marketing should actually say?
NC: Only this – To be able to sell, people need to know you, like you, and trust you.
I: Okay, so now we’re actually selling products. Something tells me I’m not getting the afternoon off just yet.
NC: Now you’ll need to measure what you’re doing. You need to understand all your activities, know your sales targets and know how well they are working. You need to be able to say – this is the return we expect – and have that information in a living document. That will keep you focused.
Note that this won’t be a static document, because the way you’ll go to market will be constantly evolving, but you’ve got to have a way to understand those changes and react to them and that’s what this documentation does. It allows you to have the right conversations internally.
Marketing is not something that you just switch on and off – every single day you are engaging with the market and every single day people are forming opinions about you.