At some point along the road to success it is likely that an entrepreneur will have to convince people that there will be a demand for their product. They may need to convince:
- An investor (should they invest in the company?)
- A retailer (should they place an order for the product?)
- Themselves (should they persevere with the product?)
When the tough questions are asked the entrepreneur who can conclusively ‘prove’ the demand for their product will find it easier to progress, and primary research is a systematic way of doing this. Would you rather be Entrepreneur A or Entrepreneur B in these scenarios?
Retailer: I like the product, but will people actually buy it?
- Entrepreneur A: I hope so.
- Entrepreneur B: Our independent survey showed that 40% of the target market would buy it.
Investor: I wouldn’t buy the product for myself, so why should I invest?
- Entrepreneur A: Because I like it and believe in it.
- Entrepreneur B: Our independent survey showed that like you 60% of the target market were not interested in buying it, however 40% of the target market would buy it.
How can you get this magic information?
Hard numbers like those shown above come from doing a survey with a large group of potential buyers, and asking them if they would buy the product in question.
If you plan to do that, this is a good point to think about what you are actually trying to sell so you are presenting your product in the most compelling way to your potential customers. You’re giving them one opportunity to understand it and decide if they like it, so you need to get this right.
Often entrepreneurs describe their product in terms of what it IS and what it DOES using language that describes HOW it works. And that has its place, of course. But will these things appeal to the customers and motivate them to buy the product? Probably not. So it follows that this sort of language will not usually get the most positive response from customers if it is used in a survey. It is therefore important to talk to customers BEFORE doing your survey, and to find out how they would describe the BENEFITS of the product in language they are comfortable with.
The following sections describe how you can identify the benefits of your product and use these to get some hard stats on your potential market. There are ways of doing this yourself for not too much money, but you may not feel you have the experience or confidence to do this. If budget permits, there are advantages to employing an independent research professional to undertake any research project. Using an independent research professional means:
- Guaranteed independence (so it cannot be criticised as being biased)
- Guaranteed quality standards (so it cannot be criticised as being methodologically or ethically unsound)
- The benefit of years of experience in planning, undertaking and analysing research
- Reporting on what the findings mean and recommendations on what to do next
Using focus groups to explore concepts
Focus groups are a great place to start by testing the waters with a new product or concept. Members of the target market for the product could be invited along to a focus group session, to ensure that early feedback is solicited from the people expected to buy the product. In these focus groups, the members of the target market could explore:
- Gut reactions to the product and its features
- What the market consider to be the product’s USP or most important features
- What might motivate purchasing behaviour
- Ways of describing the product that resonate with the market
- Words the market use to talk about the product and its benefits
Responding to feedback from the target market can help entrepreneurs to refine both the product and marketing message, ideally resulting in a more focused product offering and higher levels of interest from the market.
Using surveys to get hard statistics
Whilst focus groups can provide a depth of information around how people feel about a product they cannot provide any hard statistics. Undertaking a survey is a good way to get these statistics. As with the focus groups using a survey is a case of presenting the product to the market and asking them what they think of it, but a survey is done on a much larger scale using a consistent set of questions in a questionnaire format.
So how can you prepare a good questionnaire?
Firstly you will probably want to present your product as part of the questionnaire so that the respondents know what they are judging. Think about how you might describe the product to someone who has never heard of it before. Use the insight you gathered at your focus group to present it in it a light that is both realistic and enticing for the target market using concise text and perhaps an image.
Secondly prepare a set of questions about the product that will result in useful and usable statistics. Think about what you really want to know. Is it whether people like the product, or would buy the product, or how much they would pay? Or something else? Choose your question wording carefully depending on what you need to know (likelihood to use the product, likelihood to buy the product, likelihood to buy the product at a particular price point) Ask closed (tick box) questions rather than open ended (free text) questions, to ensure you get your stats.
Thirdly, invite members of the target market to fill in the survey. In the style of Family Fortunes, it is good to be able to say ‘100 people were surveyed…’ (where 1 person = 1% of the result) so 100 responses is a figure to aim for. However, the more people that are surveyed, then the more valid (and therefore the more convincing) the results will be.
If you have no budget, it is quickest and easiest to set your survey up online using free survey software such as Surveymonkey and then cascade it out as widely as possible:
- Use the contacts that you already have
- Send it out via Twitter, Facebook and LinkedIn
- Place a link on relevant forums and message boards
- Collect contact details at relevant seminars or conferences (say what you are collecting them for) and email them the survey
- Ask all of these to forward the survey to other relevant parties.
If you have a small budget buying questions on an Omnibus survey is an excellent solution. Most of the big research agencies run regular omnibus surveys, where clients can place a small number of questions into a larger survey and pay a proportion of the survey costs. An omnibus survey is designed to be representative of a particular population such as the population of Scotland or the population of the UK and it typically has hundreds or thousands of respondents, runs weekly or monthly, turns around within a week or less and is conducted by phone, face-to-face or online. Because the omnibus survey has a very large and representative sample, it is possible to use it to confidently estimate the size of the market for a product based on the results.
If you have a big budget then you might like to employ one of the highly reputable giants of the research industry to undertake your project (but don’t forget some of the smaller guys like Salient Point are specialists in working with startups and first time users of research!)
A note on disclosure
An entrepreneur has not filed a patent application they may not be in a position to publically present a product, but they may still need to undertake research. This issue must be taken seriously, but there are ways to address it including:
- Non-disclosure agreements with focus group participants
- Surveys or focus groups exploring the need for the product (without actually presenting the product as a solution)
Want to talk research?
At Salient Point we take pride in enabling young companies to appreciate the significant role that research can play in information-based decision making, and ensuring they are provided with useful and usable insight. We offer a bespoke research service to meet your needs, including the full spectrum of research and evaluation services plus professional advice and support.
Have a look at our website, or email Ruth Stevenson to arrange a chat with no obligations.
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