It pays to do your research
There’s a big difference between a great idea and a profitable business venture.
Many business owners dive into a new idea with the excitement of a toddler on Christmas eve, without taking the time to understand if there’s even a market for their product.
Market testing your idea may seem like a costly and unnecessary part of the process when there’s not an endless pot from which to draw funds and you’re – understandably – focused on your bottom line.
But it could save you from making a costly mistake.
Test and learn
I recently attended an event run by Business Women Australia (BWA) where the guest speaker shared a story that clearly articulated the perils of launching a brand in a new market without adopting a ‘glocal’ approach.
In marketing speak, this means taking the time to understand the unique local aspects of the market you’re targeting, in addition to any broader global brand considerations.
The guest speakers’ previous employer, a luxury accommodation business, had planned to directly translate the name of their business into a foreign language and launch into that new international market.
It was full steam ahead – until a focus group with end consumers in that market revealed the direct translation was not only offensive to the locals for whom it was intended, but worlds apart from the concept of ‘luxury’ on which the brand was built.
Needless to say, the idea of translation was abandoned in favour of ‘transcreation’. In other words, they came up with a name that appealed to the new target market while maintaining the core values and tone of the brand.
Adopting a 'test and learn approach' can provide critical insights that see you completely change the direction of your product or marketing efforts based on customer feedback.
Don't just trust your judgement
The story shared at the BWA event reminded me of the time CoreData sent ‘Tiffany & Co’ jewellery and cuff links to clients at Christmas with a simple note: ‘it pays to do your research’.
The phone started ringing immediately – some clients were embarrassed by the extravagance, others apologised that they could not accept the gift as it exceeded their company gift policy’s acceptable value amount.
The thing was, while the gifts appeared to be from Tiffany’s – they were engraved with the brand’s name, mimicked the look and feel of Tiffany’s products, and came wrapped in the trademark little blue box – in reality they were imitations made in China.
Missing the subtle messaging in the note, the clients had fallen into the trap that so many of us do – they’d made assumptions based on what they thought they knew to be true, rather than using evidence to come to a conclusion.
Evidence-based decisions will always guide your business better than opinions, so while it may seem like an unnecessary marketing spend – market testing could well save you from investing time and money in an unprofitable idea.
Not only is it prudent to test whether there’s a market for your product, market research can help you understand the potential size of the market; what type of customers it might appeal to (to help direct your marketing spend to the right areas); which channels you should use to talk to your prospects; who your competitors are; and importantly, price tolerance and perceived value.
Identifying a gap in the market isn’t enough to warrant investing in a new product or service without knowing if there is someone who is willing to pay for that product or service.
After all, that gap may exist for a reason.
Follow Kristen on LinkedIn: https://www.linkedin.com/in/kristenturnbullcoredata