Is there anything more exciting than the moment you get an idea for a business? Suddenly, your head is buzzing with thoughts about how This Could Be Big.
Often, in the excitement, an important step in launching your business gets skipped, though. And leaving out this one action can lead to business failure.
What goes wrong? Nobody talks to a prospective customer.
Lack of basic market research can put a business on the road to ruin, right from the start.
A tale of research fail
It you’re wondering how badly you can go wrong without market research, consider the story of a would-be car dealer who opened up a dealership a few years back. He had seen an offbeat, new electric car that was being manufactured by a lawnmower maker and decided it was the next big thing.
He didn’t ask anyone in town if they liked the car. Or if they would buy it at his asking price.
Also, the car had no doors. I am not making this up.
Did I mention this was in the Seattle area? People in rainy climes generally think of car doors as an essential item.
Instead, he plunged right in and rented a big indoor showroom on the town’s main drag, parked several models inside, and waited for the sales to roll in.
After a year of waiting, exactly zero sales, and I’m gonna guesstimate a healthy six figures in personal losses, the dealership closed.
Cheap ways to do market research
A lot of startups skip market research because they think it’s too expensive. The other big reason is that deep down, entrepreneurs don’t want to hear that the idea isn’t any good.
The good news is, there are plenty of ways to get some intel without spending a bundle. Here are ten ways you can hunt for existing market research on your industry that might help you out:
- Press releases. Hit sites such as PR Newswire or PRWeb — or use Google’s News search tab — to search for key terms in your industry, such as “statistics widget industry [current year].”
- Executive summaries. Executive summaries are often released for large, complex research projects to help guide people through the data. Even when the full study is pricey, often the executive summary is free, and chock-full of worthwhile tidbits.
- Competitors and research firms. Let the competition do the heavy lifting for you, and just read their survey results. They may point the way to new products, services, or features you should offer.
- Stock analysts. If your industry includes any publicly traded companies, there are stock-analyst firms providing coverage of that public company’s moves.
- Trade publications. Most industries have at least one magazine that covers the sector in-depth. These publications often commission annual research that’s available free or at low cost.
- Industry conventions. Scan the session guide to see who might be announcing new research — then, see if you can purchase a recording of the session or contact the research firm directly.
- Amazon.com and Yelp. If you want to know what customers might think of your product, look up similar offerings on sites that feature customer reviews.
- Social media and Google. You can use social media as a free market-research playground — Facebook and Twitter are popular places for customers to both complain and rave about brands they’ve purchased, so take a peek.
- Your library. For more in-depth industry research that you’d usually have to pay a bundle for, buttonhole your local research librarian and tell them what you’re looking for. Libraries subscribe to many information databases, and one of them may have just what you want.
- DIY. It’s tempting to delegate research on your specific product or service to a research firm, but don’t. You need to hear customers’ reactions firsthand. And doing it yourself will allow you to get the research done for next to nothing.
So, as you can see, there are many places that you can start. Market research doesn’t have to be terribly difficult or expensive. And you definitely will want to do your homework.
Have you done market research for your company? Please leave a comment and tell us how you got it done.