– This article was last updated on 16 July 2021-
There is inherent risk to any venture, but part of being a business leader and entrepreneur is balancing that risk with the potential for gains. When it comes to a business idea or startup, market research will most likely play an important role in that balancing act as you find out more about what aspects of the product/service are most attractive to the customer, and in what ways that offering should be refined or reconsidered.
Interviews, Focus Groups and Surveys
Listening to your target market on their experiences, needs and wants, and opinions on possible avenues on direction – whether on names, designs or pricing – is a basic but tried-and-tested method for better getting to know what does and doesn’t work. In the age of social media, it’s quicker and cheaper than ever to gauge the market, yet many choose not to do so – but why rely on instinct? The more you are able to speak directly with potential customers, the better you will inform key decisions about what you offer them.
Observe Market Behaviour
As much as all those interviews and surveys may provide insight, they won’t reveal the whole picture; people tend to unintentionally create a false image of their behaviour, often highlighting what they feel they should find attractive rather than what they actually do. For example, ask someone what they look for in a coffee and they will probably suggest something strong, distinct and rich. The reality, however, is that most people grimace at a bitter coffee – but no one likes to admit that they prefer weak and watery over robust and invigorating. So don’t rely on anecdotal evidence alone.
The Pop-Up Test
The most foolproof method of gauging the market, though, is to offer the product/service to some real customers in a pop-up shop. Over the next two years, nearly a third of new UK businesses are expected start life as pop-ups. Temporary and relatively low-cost, pop-up businesses will test the market without the full financial commitment of a long-term business setup. Also, their flexibility allows for a swift response to the ebbs and flows of customer wants – which may prove essential to a small startup as it seeks to establish itself.
By planning out a thorough testing of a business idea with the same care and thought that the idea itself is subject to, a fledgling business can enter the market with greater confidence, less risk, and better hope of achieving its goals.