|[an error occurred while processing this directive]
Value Your Marketplace Using Market Research
by Jon Warren
* Strategies for Researching the Marketplace
Researching the market is perhaps the easiest way to assess
marketplace value. Market research does not have to be costly,
nor does it have to be a complex process. It can be as simple and
as easy as surveying a cross-section of consumers (focus group)
to get opinions about the product or service to be offered, or
conducting a telephone or mail survey. The disadvantages of using
the telephone or mail survey method are that individuals
contacted may not be interested in responding to a survey. Other
market research techniques include analyzing demographic data,
such as population growth or decline rate; age range, sex,
income, and educational level; brainstorming with family and
friends, and, focus group interviews. Whatever method is used,
the goal must be on gathering enough information to determine all
potential customers--their needs, wants, and expectations; if
there is a demand for the product or service; who the competitors
are and how well they are doing. Market research should answer
questions such as:
* Who are the customers and potential customers?
* What types of people are they?
* What are the demographics?
* Can and will consumers buy the product or service offered?
* Are offerings the kind of goods or services wanted; at the best
place, best time, best amounts?
* Are prices consistent with buyer's view of the products'
* Are you applying the promotional programs in a way that will
bring about success?
* What do customers think of the franchise?
* Who are the competitors?
* If a franchise, how does the operation compare with the
Beware, there can be some disadvantages to market research. If
done incorrectly, it can be a costly, time-consuming process,
which may build in biases that distort information, ignore
answers or let arrogance or hostility cut off communications at
some point in the marketing process. The advantages, however,
outweigh the disadvantages. Don't forego this process or stop
halfway because it seems the desired results are not forthcoming.
This may be an indication of going into the wrong business or
that there isn't a market for the product or service. Don't be
discouraged, simply modify your original plan. Some benefits of
market research include:
* Learning who the customers are and what they want
* Learning how to reach the customer and how frequently to
communicate with them
* Learning what appeals are most effective and what ones aren't
* Learning the relative successes of different marketing
strategies and their return on investment
While market research may appear to be a tedious, time-consuming
process, it is necessary for success. Think of market research as
simply a method of finding out what catches customers' attention
by observing their actions and drawing conclusions from what is
seen. It is an organized way of finding objective answers to
questions every business owner and manager must answer to
succeed. Market research focuses and organizes marketing
information, ensuring that it is timely and provides what is
1. Reduce business risks
2. Spot problems and potential problems in the current market
3. Identify and profit from sales opportunities, and get basic
facts about the markets to help improve decision making and
set up plans of action.
If viewed from this vantage point, market research is an
invaluable tool that can save time, effort, and money.
* Market Research and Customer Satisfaction
Thus, taking things to their logical conclusion: "Customer
service is the biggest part of marketing." Successful business
leaders believe that if they take fanatical care of their
customers and encourage referrals that it may be unnecessary to
do any selling.
However, what if sales don't seem to "occur"? This isn't a magic
formula. There are three possibilities:
1. Too much time spent servicing the wrong market
2. The enterprise lacks a dominant business advantage
3. Not taking fanatical care of customers
Unfortunately, number 1 is an indictment of the small-business
market. While some might consider this viewpoint extreme, there's
no doubt that small businesses have to work hard to cultivate the
customer care to make a profit.
According to number 2, people need a compelling reason to do
business with any organization. There has to be something unique
and special about working with an organization. If there isn't,
it is highly probable the enterprise is in the wrong business.
The unique and special quality can be anything from exceptional
technical prowess-if it's truly exceptional-to having standout
employees who care about customer service.
Finally, number3, not taking fanatical care of customers, is most
interesting. Many businesses say and think they're providing
exceptional customer service but really are not. Some merely do
what they say they are going to do, that is good customer
service. However, if you do a little more, that is very good
customer service. Still, neither is truly great. Great service is
going to ridiculous lengths to help customers, sometimes at
Many companies are simply out of touch with their customers. For
example the story of one large technology company that hired a
consulting firm to survey its twenty most important customers
found this: Three of the telephone numbers given to the
consultant were wrong. Of the remainder, one customer contacted
hated the company. Out of the entire 20, there was only one story
of great customer service, and it was seven years old! The
amazing thing was that this was the group of customers the
company thought it was getting most of its referrals from, and
the ones it was referring the press and sales prospects to. The
situation is far from unique.
Even companies who try to stay in touch with their customers can
be broadsided. AT&T is an example: They were scoring 98% on all
of their customer satisfaction ratings, but the minute they had
competition, look how much of their market they lost.
The bottom line is that customer satisfaction isn't enough; it's
customer delight that matters. Research shows that the difference
between satisfied and delighted customers is like night and day.
A customer who is only satisfied will have no problem going over
to a competitor who offers a better deal. A delighted customer,
on the other hand, is loyal to that business and will refer it to
others. Since successful companies get most of their business
from either existing customers or customer referrals, then the
mandate is clear. The job is not to sell to new customers, but
to serve the needs of existing ones.
KEY: There are customers waiting to be served the minute any
business goes on line or opens its doors. Market research is the
key to the success of all business.
"You're in business to serve a customer need," says Derek Hansen,
founder of American Capital Access. "If you're not sensitive to
customers, don't know who your customers are, how to reach them
and, most of all, what will convince them to buy your product or
service, get help."
In conclusion, remember, before developing a plan, do the
homework. Effective marketing, planning, and promotion begins
with factual information about the marketplace, in other words,
market research. Visit the local library, talk to customers,
study the advertising of other businesses in the community
(including that of the competition), and consult with any
related industry associations.