Becoming Market Savvy

Company names such as McDonalds, Star Bucks, Lillian Vernon, and Avon bring to mind such words as success, great customer service, popular and well-branded. These businesses are successful and rank among America’s top companies, because they know about one important practice in business that can never be overlooked and that is the practice of market research. These companies spend millions of dollars each year researching their customers, industries and competitors and making sure they stay on top of the latest trends.  So, if larger companies know the importance of this needed system, small business owners should become just as savvy in learning it as well!

Market research is the system of gathering and analyzing information about your business industry, target customer and competition.  The results of this market data can be extremely useful in helping a small business owner to make marketing decisions, which can result in consistent sales and growth.

Many new business owners have a tendency to ignore this vital step, because they are intimidated by the process and /or don’t understand its importance.  Sometimes market research can also cause disappointment, because it can actually let an individual know whether or not a business idea is worth developing, if a particular price for an item is too high or if new competition is around the corner.  I believe for this very reason, many small business owners stay away from it.  However, most learn their lesson of not doing it later on.

Case Scenerio
Let’s take a look at the case scenario of Joann who opened a boutique for women in the 90’s and was doing very well.  However, in 2002 she noticed that her sales were beginning to drop and she didn’t see some of her repeat customers as often.   Joann continued to market her boutique in the usual way with sales flyers being mailed to current customers.

She often purchased clothing in bulk – thinking she could save money in the long run.  However, she was still trying to move clothing items that she purchased three years prior.  So, Joann was puzzled and didn’t quite understand why her revenue was continually decreasing, so she decided to increase the mailings of her sales flyers to current customers.  Joann figured that she was not doing enough to bring the customers in and that she needed to just increase what she was already doing.  However, it never dawned on Joann that she needed to get in touch with her industry and her customers.

If Joann would have done her market research, she would have learned that there was a new women’s boutique less than 5 miles away that boasted of name brand designer clothes for 50-75% less than most retail stores.  They also created a personal profile for each customer, alerting them via emal when they had their favorite designer items in the store.  In addition, one Saturday out of the month this new boutique held VIP openings early in the morning for customers who purchased $200 or more the previous month.  This VIP event was becoming quite popular.

Because Joann did not due her due diligence in market research, she had no idea why her sales were down and why customers were not responding to her direct mail flyers.  She was also trying to sale clothes that were possibly outdated and the new boutique was attracting customers with low cost designer items.  In order for her to turn things around, she would need to do market research and get in touch with what her customers want.

Market research can help you discover what you don’t know.  Researching your current industry on a local, regional and/or national level will help you to say on top of current trends, learn what customers like and dislike and help you to make changes that will keep up with your competition.

According to Don Doman, Dell Dennison and Margaret Doman, consultants and authors of the book, “Market Research Made Easy”, three important reasons for doing market research include: 1) before starting a new business 2) when introducing a new product or service and 3) to maintain your existing business.

No matter how exciting a business idea is or how great a product appears to be, if a customer won’t buy it, a business won’t be able to survive.  For a new business doing research before starting will help in determining the best way to market the business and provide the latest information on competition, which can be a great boost.  For existing businesses, market research can help to determine if it’s a good time to add a new product or service and it also helps to determine new trends and changes in order to adjust and grow with the market.

Make a commitment to become market savvy by putting the system of market research into practice for your small business. 

Below are ways to get started:

• • Start by taking a marketing class or workshop, so you can understand the full scope of market research. Women About Biz offers marketing courses frequently.  Also check out the WAB Marketing Channel where you can read timely how-to articles and information on marketing your business online and offline!
    

• • Consider hiring a marketing consultant to help you form a focus or brainstorming group.  This type of group can help you gain new ideas and a better understanding of what your target customers want.

• • Subscribe to your industry’s publications to keep up with the latest trends.

• • Keep up with the latest on your competitor or industry by setting up a Google Alert (http://www.google.com/alerts).  This is a free tool and once set up information will come straight to your email.

• • Conduct surveys twice per year with your current customers to stay in touch with their needs and ways to improve your service to them.

• • Research your competitors quarterly to stay in touch with new services, products and/or marketing techniques.

• • Always know what your competitive edge is.  What sets you apart from your competitors?

About the Author

Trina Newby is a business success coach and founder of Women About Biz, a personal and business development network that empowers women with the tools to succeed in life and business.  Join Women About Biz today and tap into a wealth of resources to start or grow your small business!