How To Research Demand For Your Product
The aim of this guide is to help store owners conduct a market testing to know if there is a demand for your product and to know what customers want in a product.
So you think you have the next million dollar business idea, huh? Or perhaps you have more modest goals and just want to make a few thousand dollars each month to cover your mortgage.
Truth of the matter is that you won’t know the answer until you conduct market testing.
As the name implies, market testing is about creating a sample of your product and testing how your market will act upon it. The term may sound like it is something that only big companies and businesses should care about, but nothing is farther from the truth.
Even small business, like those selling jams and handicrafts ought to conduct market testing before they even think about going big time.
So what is it about market testing that makes it so important? To be brief, market testing:
- Gives you the opportunity to interact and learn more about your target market and their preferences, which is very important since you are making the product for them
- See how the public and your market accepts and welcomes your product
- Know how much is your target market willing to pay for the product
- Gives you insights about the good and bad things about your product, which you can then use to overhaul or improve it
- Market testing is a proven method of determining whether your product will be a success or not. The results will give you an idea about how you can refine your products in order to make it more appealing to your market, what the most appropriate and effective marketing strategies to use when you launch your product, and even tell you whether such a product and business is worth pursuing. Without this knowledge, you would be walking on a ledge blind-folded, risking the time, effort and money that you poured into developing your product.
But this is an eCommerce store, you say.
Well, whether your business is a regular brick-and mortar store or an eCommerce store, market testing is equally important. After all, who will you sell your online products to if you don’t know if you have a market?
For the purpose of running your own store there are basically two ways to conduct market testing: offline and online.
Step 1: Conduct A Real-World Market Test
Market testing in the real-world is always a good idea and has an advantage over online market testing in the sense that you deal directly with the people who you plan to sell your product to. The only downside is that this method of market testing is more expensive than when you do it online. So how can you conduct real-world market testing:
Give Away Samples.
- People love samples, especially if it’s free – or in this case “almost” free. You can do this on the streets, in your shop if you have one, or if you have enough capital, you can rent a temporary small kiosk in a mall. Before you head out though, be sure to prepare a survey questionnaire, which the recipients should answer in order to get the free sample.
Join Your Local Market or Trade Show.
- Set up a stall and sell your products at these events for at least a week or longer. At the end, analyze how many items you’ve sold, which should give you a rough idea about the demand for your product. If you see competition, be sure to take the time to get to know them or study them, taking a long and hard look at their product and business and learning everything you can.
Ask the Pros.
- When in doubt, it is always wise to go to the veterans and seek their guidance. You can visit your local business groups and get to know other business people, who can hopefully give you some ideas and insights about your product and its success in the market.
Host a Focus Group.
- The idea behind focus groups is to get a better understanding of your product and your market. You will need at least a 10 participants from your target market to join. With the help of a moderator, a discussion about the different aspects of your product –both the good and the bad – along with some features that they’d like to see and more will ensue. You should make sure that there is an atmosphere of openness, and that the participants feel that they are allowed to voice out their opinions freely. A good practice is to get at least three or five focus groups in order to get more opinions and ideas.
Ask Family and Friends.
- This is in the last simply because this is the least recommended method to use. After all, they are all very close to you and wouldn’t want to shoot down your ideas, especially when they see your eagerness and excitement. Thus, save this method as a last resort, and use it only if you know that they can be honest with you, regardless of how their comments and opinions make you feel.
Step 2: Conduct A Simple Online Market Test
There are also several methods which you can employ in order to conduct market testing online. Some of them may require some learning curve before you can use them effectively, but most of them are generally easy and can be done without spending much.
- This is probably the simplest way to conduct an online market testing. Just type in your product into the Google search box, and if there are ads that appear, there is a chance that there is a market for that product. Click on them and try to see what they are about and get any insights you possibly can like reading their testimonials, success rate if any (e.g. “We have been in business for over 10 years and going strong) and others.
Visit Online Shops.
- Go to Amazon, eBay, or any online shop of your choice which sells your product or similar products. Type in your product name and see the best sellers. Try to analyze why these guys are on the top spot. In addition, try to look at the ratings and reviews that they get. A good product review will most likely mean that there will be more people who will buy this stuff in the future. In addition, you can start selling your products in these online shops and track your sales over time.
Use Google Keyword Tool.
- Google Keyword Tool is a great way to measure how many people search for your product online, or to be more specific, the keywords that are related to your product.For example, if your eCommerce store sells mens' shoes, log in to your Google Adwords account and do a keyword research by typing in “mens shoes online” or “buy mens shoes online” or “discounted mens shoes” and so on. You can type in as many keywords as you like and take note of the results. Naturally, a higher number of searches will mean that there is a demand for your product.
Use Google Trends.
- This is another great service from the search giant Google. Using Google Trends, you will be able to see how well one particular keyword or product search is doing. It gives you a timeline and graph to show you the chronological performance of the search term., as well as a map to show you where most of the people who searched for the term came from, which should be helpful for your geographic marketing.
Use Adwords Campaign.
- Adwords campaigns are those little ads that show on the sidebar or on top of Google’s search results pages. To use this, you need to pay Google in order for them to show your ad on relevant results page, which can be somewhat expensive depending on the keywords you choose. The way this works is by analyzing the incoming traffic from those ads. If the ad brings a lot of traffic to your website, then there is a demand for your product, or at least people are curious enough to want to know more about it.
- Everybody loves getting cards. Many businesses do send e-postcards and e-greeting cards to their customers every once in a while since it is a display of how much they are valued by the company. You can do the same by sending an e-postcard to 1000 people in your local area with a link to an online survey like in surveymonkey.com.
- Almost all big business and brands are on social media nowadays, and for good reasons – majority of their target market is there – which is all the more reason for you to start creating Facebook and Pinterest accounts. Go join a group or form one, or create a fan page for your product and business and see how it turns out.
The necessity for market testing is something that can’t be denied. Many start-up entrepreneurs – both offline and online – usually ignore this stage of putting up a business because it takes a quite a lot of time and even resources to implement. In the end, they end up closing down simply because they can’t find anyone to buy their products.
This is the point that you should start to understand that there is a difference between you and your customers think is great. You may believe that you have the perfect product, but to your customers, it may seem like an ordinary out-of-the-shelf item.
What if the results turned out that there is no demand for your product? Is it time to mope and cry? Definitely not.
There wouldn’t be any great inventions and business if all they all gave when they failed the first time. Thus, when you believe that you have a great product, take some time and money to test it out first.
If all works well, then you can start planning for a full-blown production and marketing campaign.
If not, try to reinvent your product, and if all else fails, it is best to move on – there is no point in spending money on a product that wont’ bring any ROI.
- Give away samples with a questionnaire so you can get input from others.
- Join your local market or trade show to get a rough idea about the demand for your product.
- Ask the pros for guidance and insights on how to to be successful.
- Host a focus group to get a better understanding of your product and your market..
- Ask family and friends.
- Search for your product in Google and see if ads appear.
- Visit online shops that sells your products and analyze their ratings.
- Use Google Keyword Tool to see how many people are actually searching for your product.
- Use Google Trends to see how well one particular keyword or product search is doing..
- Use Adwords Campaign so Google will show your ad on relevant results page.
- Send e-Postcards with an online survey.
- Register in Social Media networks for you to get connected.