Would you put on a blindfold and then walk across a busy road? Or jump into a lake without checking how deep it is? No, of course you wouldn’t. So why do some people launch an online business without first carrying out some research to see if it is likely to work?
Probably because they don’t know how to or they think it is going to cost a lot of money.
However, when it comes to starting up a business, a little time and effort invested in market research can make the difference between success and failure. You don’t need to commission a specialist agency to carry out an expensive program of research. With a little preparation and planning you can undertake the research that you need to give you (and others) confidence in your project.
There are three vital areas to consider when it comes to research for an online business. These are as follows:
1) Establish Demand
The first thing you must do is to establish if demand exists for your product or service. You can have the best product in the world but if no-one wants it your business will not survive. A shop selling top quality thermal clothing is likely to enjoy limited success in California but it could be extremely profitable in Alaska. The beauty of being in an online business, is that you can fairly easily find out what people want from the internet. One of the best ways to do this is to visit a search engine such as Overture (http://www.overture.com) and check out how frequently people search for the key words and phrases most relevant to your product or service. If the number of keyword searches for the most relevant terms for your product or service is very small you may need to reconsider your product or your marketplace. You have a much greater chance of selling a product that lots of people are actively searching for than a more obscure item that is likely to have limited demand. That is not to say exclusive products cannot be successful, but they do require a very targeted marketing approach.
2) Keep Up To Date With Trends
A great technique for keeping an eye on trends and for finding out what people are looking for is to join newsgroups and forums relating to your product area. There are thousands of groups on every topic you can imagine. Check on Yahoo or Google for groups relevant to you. It is generally best to use groups which are moderated – these tend to be more focused and professional. Unmoderated groups tend to attract time wasters who do not keep to the topic. When you have chosen and signed up to some relevant groups, you should read through the messages that have been posted in the last few weeks or months. This way you will get to know how the newsgroup works and what type of posting is acceptable. When you are familiar with it, you can start to ask questions to help with your research. In general, though, blatant advertising postings are not allowed but you can usually add your contact details and if someone contacts you directly, you may be able to promote your product or service. Using discussion groups has the added bonus of making people familiar with your name and helps you to establish yourself as an authority on your subject.
3) Check Competitor Activity
Regardless of what you plan to sell you will have competition. The number of competitors will vary depending on your product or service area. If you plan to sell ebooks you are likely to be in competition with hundreds, if not thousands, of other sites. If you sell precision electronics for the nuclear power industry your competitors will be much fewer in number. However, competition is healthy and in a market with many suppliers, it can generally be assumed that demand for the product is strong. Regardless of the number of competitors however, you must investigate what they are selling and how they are selling. Again, search engines are the main source of assistance with this exercise. Select two or three of the main search engines or directories and type in key words and phrases relating to your product or service. Note the companies which appear in the top 30 and visit their sites. Check out their products and prices and record details of these for each company. You should also take notes on the claims they make for their products and your impressions of their overall marketing effort. When you have visited the sites of 15 or 20 competitors you should have a strong indication of the competition in your marketplace. With this information you can assess how your product or service compares with the others. It allows you to identify the benefits or USP (unique selling proposition) that only your product can offer.
There are lots of ways to make your product stand out from all the others. For example, if you find that competitors are strongly emphasising their keen prices, you can make your offer more attractive by demonstrating a high level of customer care. To do this, you could make a commitment to respond to all queries within one working day or offer a no-quibble returns policy. Put yourself in the customers’ shoes and think of what would attract you to buy from your company. Good research will pay dividends and help to keep you ahead of the competition.
Gillian Gaston is a marketing specialist with
18 years’ experience. She is a partner in
JGN media, which offers expert information
and resources for on-line business. She is
also the editor of JGN-InTouch Ezine, the
hottest ezine for online business.
Visit: http://www.jgnmedia.com
