Business ideas come and go. The best business ideas can fail if they aren’t properly executed. If you are looking to start a business, there are several steps you should take to try and validate your business idea.
Hiring a reputable market research company is vital if you want to gain an advantage over your competition, as well as drive sales. Market research is something that few individuals or companies can do by themselves.
Proper market research takes a lot of time and is best left to the professionals.
Market research is not just typing keywords into Google and reading a few graphs and infographics. If done well, it provides you with actionable client leads, business opportunities in the market, as well as in new markets, helps minimize risk and maximize growth, and more.
Regardless of sales and revenue creation, market research can bolster your company’s reputation and maintain it, something which every business needs at one time or another.
Gathering metrics of your consumers, customers, clients, and competition is vital to remaining competitive in today’s marketplace. This is the goal of any market research company that is worth its weight in gold, and this is why it is so important to do it right the first time.
Here are eight types of market research that can aid you in maintaining and growing your company.
1.Market Description Survey
A market description survey will show you how likely your business will be to succeed in the current market. Learning about statistics like the market size, relative market share, market growth, share of the market, and competitive positioning, is vital to thriving in any marketplace.
Many businesses, especially ones run by new entrepreneurs, tend to skip this survey, but it can be the most important market research you do.
The restaurant industry, for instance, is cluttered with family restaurants run by entrepreneurs who think that their business will make them rich. These entrepreneurs soon find out that if they become rich, all their wealth will be tied up in business assets and therefore not accessible due to the low-profit margins that plague the industry.
So how do you overcome this? You need to research your market and understand it before entering it. A market research company helps you with this by laying out all the important details about a specific industry and its market.
2. Government Database
Sometimes, you need hard data to back a business proposal or qualify a business plan. Hard data, collected by full-time government-contracted research companies and researchers, is available online, and often for free. However, just because something is free does not mean it is easy to understand.
A professional market research company will take your research queries, break them down based on the issues presented, and then scour government database after government database looking for answers.
Government databases are great for hard data like census information, demographics, laws, regulations, policies, recent scientific advancements, and peer-reviewed articles (many of which are hidden behind paywalls).
3. Industry Events
Who better to ask about market research than a recognized expert in the field? At industry events, researchers from professional market research companies rub elbows with some of the most influential members in the field.
Being in proximity to such individuals is great when dropping research queries in conversation. A new insight, theory, or even acknowledgment of previous work, can revitalize a market research proposal. The only way to get access to such events, especially high-caliber ones, is via a market research company though.
4. Social Media
Social media is incredibly accessible. Anyone can scour through it and do research. However, just because you have access to it does not mean you know how to use it effectively. Social media is like driving a vehicle. There is a huge difference between learning how to use it effectively, and understanding it on a deeper, more abstract and theoretical level.
Searching up local competition and reading reviews on social media is one thing. Being able to track users over time via the use of detailed analytics, as well as running targeted advertisements to potential consumer demographics as a result of that analysis, is a whole other ball game.
The best businesses have figured out how to harness the power of social media marketing to directly influence their target audience. Whether you test the viability of a product or service using A/B tests, see how viral a specific topic is, or test different promotions, social media provides you with the opportunity to tap into millions of potential consumers for far cheaper than traditional advertising.
5. Friends and Family
In most cases, you can always rely on your family members to tell you if an idea is good or bad.
Does this mean you should immediately jump on your opportunity if they say the idea is great? No. But it will help you get a general feel for how viable something may be, because your family members are still consumers as well.
Market research can also measure subjective metrics like word-of-mouth and emotionality regarding specific companies and products. However, market research is so much more than simply talking to friends and family. You also need to be able to quantify these subjective interpretations of companies and products, and draw well-researched conclusions from them.
Whereas a layman might use something like a friend’s positive feelings about a policy or law to drive an advertising campaign, an experienced researcher might run a study of 1000 telephone respondents regarding their feelings on a subject using a Likert scale, which can quantify a respondent’s feelings on a spectrum.
6. Google Tools
You have probably heard of some of the top Google Tools: AdSense, AdWords, Alerts, Analytics, and that’s just the A section. There are many tools to choose from, any and all of which can help your business. However, knowing which tools are best for the job is a skill that can only be grown with time.
When testing a business idea, you will want to search Google Trends, check any relevant analytics you can find on a topic, and research specific keywords and see what type of volume they are getting.
A professional market research company will use the knowledge and experience gained over servicing hundreds of previous clients to find the tools that best fit your research queries. Then, it will implement proven strategies, designed to maximize the accuracy of the market research you have requested.
7. Customer Feedback
Customer feedback is very valuable. However, there is an art and a science to collecting it. Few customers willingly fill out surveys right after they have bought a product or service. Collecting personal information like telephone numbers and emails is hard enough.
If you are trying to validate a potential business idea, you will need to find a way to reward your customers for taking the time to provide you with feedback.
Whereas a layman would simply obtusely ask a customer for his or her opinion, maybe via an impersonal email, a professional researcher would suggest personalizing that email. People are more likely to respond to personal inquiries.
Bright Local’s annual Local Consumer Review Survey 2016 found that “7 out of 10 consumers will leave a review for a business if they’re asked to.” That is the difference a personal email can make.
8. Study Your Competition
Always look at your competition. After all, they are doing the same, or similar, thing that you are doing. They have the same risks, the same potential rewards, the same business models, and more. Look at their successes and failures, and learn from them.
If you are struggling with the specifics, call one of your competitors and pretend to be a customer so that you can learn their pricing, their guarantees, and what their unique selling points are.
Your competition can provide you with a lot of valuable information when it comes to validating a business idea. Remember, not every business idea has to be a reinvention of the wheel You can make a perfectly acceptable living by providing a higher quality product or service in a well-established industry. Simply analyze your competition to learn what you can do better to land new clients and grow your company.
Experienced researchers will study your competition in an academic sense. They will look at the market share of the competition, the change in market share based on the introduction of specific products or services, the public financial data of a company, any lawsuits that were enacted on behalf of, or against, the company, and more. A well-researched competitive analysis is more complex than simply looking out the storefront window.
Piecing It All Together
Professional market research companies use statistical analysis and research methods built up over a long career of education and experience to provide you with market insights that simply are not available to you at face value.
The data they provide will cover every possible angle of your industry and position you for success. Don’t make the same mistakes that so many entrepreneurs have made in the past. Invest in high-quality market research and learn how to properly market your company. Today’s marketplace is competitive and the best companies make use of market research and know how to market their product and services.
The wealth of knowledge that you will receive from a reputable market research company is simply worth its weight in gold.
Ellen Baron is the CEO and founder of Ruby Cha Cha. She helps B2B businesses with market research to drive sales, build branding and keep their customers happy. She is also a fan of reality TV, Alsatian wine, and dogs. Find her on linkedin.