A story about Sam’s Fish and Chips shop
Sam, the owner of a highly successful local fish and chips shop was considering extending his hours to offer dinner to its patrons as well as lunch. Before Sam went to the expense of purchasing extra food and hiring more staff, he decided to do an informal poll among his customers. For one week he offered everyone who was willing to fill out his market survey a free muffin and coffee. The survey results showed him that only a small percentage of his existing customers would come out to have fish and chips for dinner. In addition, his location was close to an industrial area that was well lit during the day but where people said they wouldn’t feel comfortable coming to in the evening when it was dark. Sam’s market research told him that he was being successful doing exactly what he was doing, so rather than extend his hours, he expanded his shop and is still doing a booming fish and chips lunch business.
A story about Lucy’s Leadership Training Program
Lucy was the Executive Director of her town’s Chamber of Commerce. She and her staff came up with what they thought was a brilliant idea to offer a Leadership Training Program to their members. They calculated what it would cost to run such a program and created a preliminary course outline. Before they launched the program, they did an online survey of their members. Lucy discovered that there was a lot of interest in the program itself, but that the members were not willing to pay what the Chamber needed to make it profitable. Lucy readjusted the program costs, took the course down to 5 modules from 8, and offered the course to her membership. Not only did this provide the foundation for Lucy’s initial success with the program, but it became so popular, she was able to raise the course fees the following year and take it up to the original 8 modules. Although Lucy and Sam are running very different types of organizations, they both benefitted greatly from doing their market research prior to launching their big ideas. That market research saved them both money and time and led them to more success than they would have had, had they not taken the time to determine what their customers wanted.
Look before you leap
It’s tempting when you have a great idea (and entrepreneurs have lots of them) to get carried away by your enthusiasm, but there are lots of reasons your idea may not work. You need to know whether your customers will buy into that idea. They are the ones who will support your idea with their dollars, so doesn’t it make sense to ask them what they think before you leap?
Before embarking on any new business venture, considerable time must be spent in research. Your payoff will be in excess of ten to one in time and money saved or earned. For every dollar, for every hour that you put into research, you’re going to save ten or twenty or thirty dollars or hours later on.” Here are some suggestions for doing research before you launch your next big idea.
Ask for meaningful information. Leave no stone unturned. Think of every potential detail you may need to know before launching your idea and put it into your survey. Be clear how much it’s going to cost you, what you have to charge to make it work, and who your potential customer or audience is. Ask questions that will help you determine whether consumers are willing to buy what you’re proposing, and how much they are willing to pay.
Asking them whether they think it’s a good idea isn’t enough. A lot of people will tell you they like your idea, but that doesn’t mean they would pay for it. Your research will show you where you need to tweak the details to make it work, or, whether you need to scrap it and go in a different direction.
Do your own research. Read trade magazines, industry articles, and educate yourself about consumer trends and cultural influences. Know your customers mindsets. For example, if your idea consists of selling a high consumption product that’s hard on the environment, you’re probably not going to be able to sell it given the current environmentally-conscious culture. It’s not only about knowing what consumers are thinking today, but where they may be leaning tomorrow that’s important.
Be objective. Don’t let your love for your idea cloud your judgment. If there’s anything dangerous about the entrepreneurial mindset, it’s that entrepreneurs tend to love their ideas so much they’ll do anything to justify making them happen. Take the real data, learn from it, and make a sound decision based upon it.
Yes, it takes time. Yes, it even takes money dollar for dollar you’ll save a lot of money if you spend a little to invest in your research. If you charge ahead based on a wing and a prayer (and even a whole lot of self-belief), you may be in for a rude awakening and potential loss to your business. Don’t stop dreaming and coming up with ideas, but make sure your ideas are based on realistic market research and solid evidence for their viability.
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