One of the most common questions I hear from entrepreneurs is about how to understand their market, especially doing business online. Before you start spending all your time and money dedicated to one target niche or product, it’s important to do market research. In fact, I don’t even recommend you start developing a business plan until you’ve done the following:
1. Identify Your Keywords
Keyword research is an essential step for most marketers doing business online. It helps you understand what people are searching for online and what words they are using. There are numerous tools that can help you do this research, including Google’s own AdWords keyword tool, a free and paid tool from Wordtracker, and a popular software program called Traffic Travis (you can catch my quick video review here). It takes a little practice to learn to do keyword research well, but knowing the most commonly searched terms will help you target the problems that people are facing. It also means you can optimize any content you create, helping it rank in the search engines.
2. Uncover the Biggest Fears, Challenges and Tests
When you understand the problems people are facing in your target market, you can create solutions that fit. Solutions sell. Look at the questions people are asking and why they are asking them. Examine he places your target market hangs out, like forums or Facebook groups, and spend time studying there. Watch the discussions that take place and the questions asked. If there are problems that people consistently talk about, you’ve just found a fantastic opportunity to provide a solution that fits the demand. Oh, make sure your solution is one that people will not just want – they must be willing to invest in it as well.
3. Paint a Portrait of Your Customers
It certainly helps to paint a portrait of your ideal customer in as much detail as possible. I actually work with many of my clients to create something called an empathy map (I’ll be teaching this concept in my upcoming Spice Up Your Brand Online program that opens in just a few weeks). This isn’t necessarily a visual picture, though some people do that, but one that describes little details about them. What are their demographics, such as age, gender, occupation, where they live, etc? What is some of the lingo they use? Do they tend to have similar interests or hobbies? Write it all down. Some marketers even keep this list in front of them whenever they write anything for or to their customers.
4. Know Your Competitors
Who are key players in your market? I don’t like the idea of seeing them as your “enemy”. They are simply key players or competitors. You should have a full understanding of who your competitors are so you know just what you need to do to successfully stand out. Identify your biggest competitors by looking at who else is selling solutions when you search for answers to the problems your market has. What are they selling? Where are they selling it? What kind of language do they use in their sales copy? How does one competitor differentiate themselves from another? What are the prices of their products and what kind of backend sales do they do?
Observe some of your biggest competitors but hear me on this – be careful not to do anything that would allow you to be accused of stealing. Polite and genuine observation of their process and the way they deliver servicewill give you ideas on what you can do to compete with them.
While it can take time, market research can grant you a huge competitive advantage and it can save you from sinking a fortune in time and money into a venture that otherwise would fail. The more market research you do from the start to understand your market, the less risky your investment.