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It’s not hard to imagine this scenario: An entrepreneur experiences a problem and decides to build a solution to solve it. It works well, they love the solution and choose to start a business around it. The entrepreneur puts in a lot of energy, time and money to bring the new business into the world. Then they launch the business. And nothing happens. They simply can’t sell their solution.
Whether you’ve launched a new small business or a high-growth startup, you’ve got an uphill battle before you. About 20% of startups won’t survive past their first year in business. There are many reasons why a new business won’t make it, but the one thing I see consistently as a fractional CMO is that the entrepreneur in charge hasn’t done their research.
Doing market research in the early stages of building a company — and regularly after launching — is essential to validate a business idea and build something your market wants to buy.
Yet, this essential step is often overlooked or simply ignored by many business owners. Why?
First, it can be a lot of work. Furthermore, according to Vernon Research Group, you can expect to spend anywhere from $4,000 up to $50,000, depending on your research.
Put those two factors together, and it becomes clearer why entrepreneurs are skipping this step. The truth, however, is that market research can be easy and cost-effective for small business owners. Here are four strategies for running effective market research on a budget.
Related: Why Applying Constant Pressure on Yourself Can Significantly Improve Your Productivity and Success
1. Interviews and surveys
My favorite way to gather information for market research is to write down the questions I want answers to and have the answers documented through video interviews or surveys.
The more people you can get to give you their insights, the better. To get the most responses for your survey or interviewees to meet with you, you’ve got to start asking. This can be done by posting on your own social media channels, identifying your target customer on LinkedIn and sending them a message asking for help, or even running ads on social media.
The key here is to get scrappy, don’t be afraid to put yourself out there and keep going until you have enough information documented to make an educated decision about how to move forward.
Related: The Best Ways to Do Market Research for Your Business Plan
2. Competitive analysis
Although it is often undervalued, there is a lot to be said for conducting a thorough competitive analysis to inform the next steps to take in your business.
Researching your competition means stepping beyond comparing your business to one or two others. Find eight to 12 companies that could be considered your competition and analyze everything they do, not just their product features. Who are they identifying as the target market? What are they highlighting in their messaging? What are their price points? How are they showing up on social media?
A strong competitive analysis will help you to identify more clearly how your market is currently being served and how you can fill the gaps.
Related: How To Spy on Your Competition With Social Media
3. Tap into the communities of your target market
We are now connected online more than ever before in human history, and people gather in digital spaces over the things that connect them, from their love of pets to their personal challenges. Find the communities where your target market spends their time, follow their conversations and start engaging.
Facebook groups, Twitter and LinkedIn are ideal platforms for identifying and joining communities where your ideal customer might connect with others around a problem you are solving.
4. Start asking questions publicly
Arguably, Quora and Reddit could also be called communities where your target market lives. However, the way people engage and interact on these platforms is fundamentally different. On Facebook groups, Twitter and LinkedIn, you need to spend time engaging and building rapport with others in the community.
On Quora and Reddit, it’s a bit easier to join an existing conversation or post a question and get a direct response from the community at any time, as long as you have a thoughtful, non-promotional question to ask.
These two platforms will likely be the quickest way to start your market research.
The big problem with skipping market research is that you risk building a product or service that no one wants. It’s essential to spend the time — before you start building — to identify your target market, find them, and get feedback on what you’re trying to create.
You simply can’t afford to overlook it or assume you know what the market wants or needs.
Market research is a key component to successfully launching any new business. With a little time and effort, you can successfully confirm that your product has a spot in the market and move forward confidently.