Understanding your market is really a blend of science and art. The key is to collect the data. I believe it is important to do this through market research techniques, and through customer visits. Ensure you maintain personal contact with your market. To me, there is so much more power from what a customer says directly to me, than through sales or even market research. The personal contact gives me a feel for the market.
However, my personal contact with the market needs to be balanced with data from market research. This information provides more scope of information, and more details than it possible in customer visits. Market research has the leeway to ask more questions, while sales calls exist to build the relationship with the customer. In addition, there is some bias when customer talks directly to people at a company. When talking to a third part, it is easier for the customer to be honest – there is less pressure to sugarcoat the message.
So, it is key to join and be active in the key associations in your industry. Get to know the industry players, your customers, your prospects. Understand what is important to them, how they view your competition, how they view your company. This is all critical context.
However, market research, if done properly will give you a less biased view of the world. It will help replace the company’s view of itself with the market view of the company. Include both customers and non-customers in your research. This will provide a truer picture.
Screen your research participants to ensure they either make the buying decision or are part of making the decision. Key questions to ask the decision-makers in the market research are:
– whose opinion do you pay attention to when buying product A
– where do you look or who do you talk to, to find companies to buy product A (on the web, magazines, people)
– what do you wish suppliers of product A would provide
– who makes the buying decision
– what criteria is your buying decision based on (you may want to have them force rank the criteria)
– where do the decision-makers hang out (associations, websites, magazines, etc.)
Generally, when performing market research, you will start with qualitative market research. This is a few, indepth interviews. The qualitative research sometimes leads to a need for more qualitative market research, or provides the basis for doing the quantitative research.
Quantitative research consists of polling a lot of participants in your target market in order to have statistically significant data. Through this, you can understand which percent want x and which percent want y. Of course, there is always a margin of error, dictated largely by the sample size and number of segments within the sample.
Combining the information from your interaction in the industry, research on the web, reading, and market research is the art. Your conclusions will drive your marketing strategy. As always, it is critical to keep a finger on the pulse of the market as change is the constant in this world.
Good luck! I’d love to hear how it goes.
For more resources, see the Library topic Business Development.