Before settling on a market to sell your products or offer your services, you will inevitably need to perform some market research. This will involve browsing around the web, collecting facts and interpreting the numbers, all to make sure that you will make a conscious decision in the end.
Below we are going to cover the places where you can go for this research, and how you can collect the numbers and interpret the trends that you will see on different segments.
As we explained in the previous lesson, choosing the right market for you is a matter of evaluating the internal factors (e.g. your value proposition and resources), and the external ones (e.g., supply and demand forces)
The analysis of the internal factors will need to be done exclusively by you. You need to sit down and think about your vision, strengths, weaknesses and so on. No one can help you there.
For the external analysis, however, you should be able to look around and collect numbers, trends and messages laid out by potential customers and competitors.
You can start this research with the demand side in mind. Once you find the buyers, it will be just a matter of checking what people or companies are trying to sell to those buyers. If there are enough of them, and if their products or services are adequately addressing the needs of those buyers, move on. If on the other hand, there aren’t many companies there, or if the ones that are present are doing a mediocre job, then you can consider jumping into that market.
Alternatively, you can also take a look at the marketplace to identify products and services that are aligned with your interests and internal factors. Then you need to figure whether you can develop superior products or services to compete successfully with them.
We will start with the strategies that you can use to find the buyers:
1. Think in Terms of Needs and Wants
Companies that think in terms of products and features fail. Companies that think in terms of needs and wants of customers succeed. In other words, it does not matter how many features or how fancy your product is. All it matters is whether it addresses the need of the customers or not. This might seem to be common sense, but it is not. In fact, over 80% of all the consumer products that get launched every year fail.
Here is how Theodore Levitt, a famous marketing professor at the Harvard Business School, used to describe this concept:
“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”
The starting point of your research, therefore, are the needs and wants of people. What tasks are they trying to accomplish? What things they need to get done? What products or services would make their lives easier or better?
If you put the focus on the customer, or more specifically on the job that the customer is trying to accomplish, the whole marketing game becomes an easy one.
2. Seek Desperate Buyers
One popular strategy among marketers is to look for desperate buyers. Those are people with serious problems at hand those need to be solved as soon as possible.
Here are two examples to let you understand the difference.
Customer A is considering to start jogging lately. He is a bit overweight, and could use some exercise. One day, while surfing the web, he comes across a blog that talks about running, and that has an affiliate offer for a pair of running shoes.
Customer B, on the other hand, is having some terrible headaches lately. It is getting so bad that he can’t even work normally. One day, while surfing the web, he comes across a blog that talks about headaches, and that has an affiliate offer for an eBook that contains 101 effective ways to combat headaches.
Which of the two customers is more likely to purchase a product?
That is quite an easy one huh.
Desperate buyers purchase on impulse. They don’t have time to compare prices, features and so on.
People with physical distress represent the most basic case of desperate buyers. It is not a coincidence, therefore, the huge profits that the pharmaceutical industry pulls in every year.
In order to sell to desperate buyers, you don’t necessarily need to sell medicines, though.
There are desperate buyers in most markets.
Financial market? Think about people that need to get their names out of a credit blacklist.
Wedding market? Think about people that were invited to a ceremony but don’t have the necessary clothing garments.
Technology market? Think about users that need to clean their PC from a virus infection.
Dating market? Think about people that have been single for years and can’t find a soul mate no matter what.
So on and so forth.
Notice that we are not recommending you to exploit the desperate position of those buyers and to try to sell them low quality products to make some easy money. We are rather explaining how you can identify the situation that those buyers are in, and how you can offer them a product or service that will solve their problems, thus creating value.
3. Find Where People Already Spend Money
It is much easier to sell to someone that already spends money on related products or services than to sell to someone that does not have the “buy” mindset in place. Once you find those people, all you will need to do is to offer them a better, simpler or more complete product.
Suppose that you found an eBook about investing in the stock market that is selling like hot cakes. That is a product and market segment where people are therefore willing to spend money on.
Now you need to ask yourself: “Can I offer a better product in that market segment?” In this case, a better product would be one that would teach people more efficiently how to invest in the stock market. Notice that this improvement can come from the product itself, or from the perception that customers will have about it.
Then ask yourself: “Can I offer a simpler product in that market segment?” Remember that people are naturally lazy. If there is an easier or simpler way to do something, they will prefer it. If the product you discovered is a 500 page eBook with a lot of complex charts and strategies, perhaps you could create a smaller and simpler one, with easy steps to follow and quick action plans.
Finally, ask yourself: “Can I offer better product or a bundle in that market segment?” Customers interested in investing in the stock market might also be interested in learning about investing in Forex and in financial derivatives. You could then create better product or a bundle of products covering all those areas.
Websites and Resources for Research
There are many websites and online resources that you can use to implement the strategies described above. Additionally, you can analyze the marketplaces that we will cover below to get product ideas, and to gauge the overall competitiveness and saturation of any given market.
Yahoo! Answers: On this community-drive site, the users are able to submit and answer questions on a wide range of topics. With millions of questions being submitted every month, you can use this site to find the problems that people are trying to solve. The site allows users to filter the questions and answers by category, or to search directly for the ones that contain a specific keyword.
Commissions Junction: Commission Junction is the largest affiliate marketing network in the world. It basically acts as a middle man between companies that want to promote their products and services with affiliate schemes (e.g., pay per sale or pay per lead), and publishers that want to make money offering those products and services in their websites. You can create an account with them for free and browse their marketplace to see what products are being offered, at what price and so on.
ClickBank: Another very popular affiliate marketing network, with thousands of offers in a wide range of market segments. You don’t even need to create an account there to be able to browse on their marketplace (you will find the link under the “Promote Products” tab). You can search for products by keywords and analyze the price that they are selling for. An interesting feature here is the “gravity” score, which reveals how many affiliates decided to promote any given product. This score can be used as a sign of overall popularity of the product.
Flippa: The Flippa is one of the most popular on the Internet. Inside Flippa, you will find people selling domain names, advertising space and so on. There are two categories of items that are very useful for someone doing market research, though. They are the “Premium Websites for Sale” and the “Established Websites for Sale.” In those categories, you will find a wide range of websites being offered. Many of those sites offer services or sell products, so you could browse around looking for ideas. Usually, the seller will also provide extensive details about the website, the business model, and the revenues. This is some valuable information.
Sponsored Results in Google: A good way to find products and services on any given niche is to simply search in Google for keywords related to that niche. Afterward, you just need to check the “Sponsored Links” that will appear on top of the search results or on the sidebar. Click on the links and examine what offer they have there. Can you improve, bundle or simplify it? Pay attention to how many sponsored links will appear as well. The higher this number, the higher the competition.
AdWords Keyword Tool: The AdWords Keyword Tool can also be used to research your markets. The obvious benefit is the ability to see the monthly search volume of any search query. The higher this number, the more people that are likely to be interested in related products. Another factor that you can consider is the “Advertiser Competition.” Advertising money usually follows consumer demand, so if a keyword or search query has a low advertiser competition, it might mean that there isn’t such a strong demand around it.
In the next lesson, we will go through the niche research process, which is slightly different from the market research one.
- Think about the customers inside the markets that are aligned with your internal factors. What kind of jobs they are trying to accomplish? What things customers need to get done on a regular basis? Can you offer something that will help them with those?
- Try to identify desperate buyers in different market segments, and evaluate whether there are products already on the market that solve their problems. Informational products are particularly suitable for those customers.
- Examine popular products in related markets, and evaluate whether you could improve, simplify or complement those products.
- Browse on the websites and marketplaces mention in this lesson and examine the products that are being offered. Face this as a brainstorming session, and write down the ideas that you will have for new products and services that you could offer.
Previous Lesson: Choosing Your Market or Niche
Next Lesson: Niche Research