Successful Entrepreneurial Market Research Techniques
Every entrepreneur I have ever met starts with a dream in which they truly believe. The dream is usually best described as passionate, primarily based on intuition and/or a missed opportunity that may have occurred previously in the entrepreneur’s career.
In every instance, a degree of risk is involved and the ability to “jump off the cliff” and manage risk is what breeds emerging businesses, products, and services that began as a dream.
In most instances, what prevents those with an entrepreneurial spirit from actually turning that dream into a living is the inability to take the incumbent risk involved in leaving a salaried job, the money necessary to actually launch and sustain a business, or the knowledge required about where to go to understand whether there is a market for their idea—what to do to understand if their idea is truly unique, has true potential, and what the competitive dynamics are that must be contended with.
In short, there is a base level of market research that must be conducted to confirm there is a customer need, who those customers are, where they are and how to reach them, and what they might be willing to pay for the products or services the business is providing.
In many instances, entrepreneur’s plans are blunted by the perceived high costs of having to field primary research in the form of conducting qualitative or quantitative research with the help of research experts. It’s true that primary research initiatives can be extremely expensive, complex, and time intensive.
However, there is a wealth of information available to entrepreneurs across virtually any business, product, or service arena that one might seek to enter at costs ranging from reasonable to free. This is typically what is known as secondary research and anyone with the drive, time, and patience to weave their way across the incredible amount of existing published information that exists can confirm that their dream or idea has “legs.”
There are a number of places that entrepreneurs can go to better frame-up a business plan and conduct the base level research necessary to confirm that there is a market and a unique place they can own with the target customer. This is true for both Business-to-Business focused initiatives as well as Consumer-focused businesses. These sources of what can be termed “credible” information and data that serves as base-level research include:
- Industry Publications and syndicated data usually only available to large corporations can be found in public libraries or specialty libraries like the James J. Hill Library in St. Paul, MN.
- On-line sources of abundant information about an industry, companies, products, and trends via trade and association sites, general business sites, company Web sites, and even blogs
- Articles found in traditional sources for daily business activities like The Wall Street Journal, The New York Times Business Section, Fortune, Forbesand Bloomberg BusinessWeek.
- Local business publications usually exist in almost every major metropolitan market and should be reviewed or subscribed to, including your local newspaper and its business section.
- Government sources at both the federal and state levels can provide valuable insights.
- The business schools of most land-grant universities house tons of information that may be available to you by taking a single course or by simply strolling into their libraries and spending time there.
These are just some of the places that are repositories for a vast amount of utilitarian and accurate information. This is data entrepreneurs can refer to in confirming their idea is worth minimally investing their time against, as well as for qualifying customer interest and potential (as well as constructing a business plan to take forward for funding).
One area that usually is missed is the industriousness of simple, old-fashioned detective work. That means simply picking up the phone and asking for help. You will be amazed at the generosity of people who are experts or sources of information that can help you determine your future as an entrepreneur by giving you the information needed to breed success.
Professors, librarians, writers at local newspapers, experienced business women and men you come across in your life or via references from friends all represent rich sources of information and confirmation about your dream or idea. Call them. Write them. Reach out to them by using your network or accessing an existing professional network available to you.
All it takes is the courage to ask. The worst that can happen is you get a “no” or no reply but you will be surprised at the genuine and good spirit of people who truly want to help.
An area that deserves specific mention is that every business, product, or service can only be successful or get funded if it has customers or consumers that want it. In helping the many numbers of individuals, small companies, and major corporations determine whether a new business or initiative has a future, we always go right to the target audience. The customer determines success at every level of planning and implementation. And you would be amazed how often the customer’s viewpoint or the perception of need for what is being considered is ignored.
Once you identify what the business or product is, you must evaluate it via the eyes, mind, and heart of the customers being targeted. What is its core value as perceived by the target? What makes it unique compared to what else is out there. In virtually every business, there is a customer experience that occurs. What is the desired or perfect customer experience that one seeks when their product or service comes into contact with the target?
Trends affect the success of all new businesses or products whether it’s a B2B targeted situation or a consumer targeted situation. In the food business, trends in areas like convenience, healthy eating, ingredients composition especially organic, packaging, and functional benefit are all critical factors in determining success.
Quality, availability and pricing are simply table stakes. Understanding customer trends that exist at present as well as those predicted in the future serve as benchmarks for immediate and future potential and they must be considered.
Positioning is dependant upon defining the core value proposition combined with the critical point of difference as viewed by the target. Successfully positioning your business or product requires entrepreneurial understanding of what the target customer thinks, wants and perceives as unique or different and worth trying. As such, all message development that goes into sales materials, and content development found in advertising or Web sites should be developed with the customer in mind first and foremost.
As noted above, the resources available to entrepreneurs to gain insights about customer expectations, desires, and interests is rich and broad. Most of the resources noted previously house a wealth of customer and trend data. And taking your business or product idea to friends, family, peers, or your personal network or via referrals cannot be underestimated for what can be learned.
It should also be noted that there is one syndicated resource that exists on a by-industry basis that should be explored—Mintel. Mintel publishes reports on a by-industry basis that factors in market, Competitive, and trend data with customer and customer segment insights that are extremely valuable but comes at a cost. The cost per report is in the thousands of dollars but should be explored for the quality it represents and conclusive information that can provide speed to market and confirmation about the entrepreneur’s investment.
While it is true that it is difficult to compete with the resources and investment abilities of successful, existing corporations in the area of market and customer research, there is also a vast array of data and information that can be mined at little cost and with a simple investment of time.
This data can go a long way to confirming that an entrepreneur’s dream has real success potential, can be used in drafting a business plan that is attractive to potential investors and can be used to successfully launch an enterprise.
Further, insights gained in the area of consumer and market trends, customer expectations around products, and experiences will shape the way you develop communication targeted to those customers you seek to market to.
And the good news is it’s out there, it’s available at reasonable to no cost, and requires only your time and resourcefulness to access it, leverage it, and use it as a springboard to launch your dream.
© 2007 Greg Heinemann. All rights reserved.