Multi-national corporations spend millions of dollars developing products and market testing them before they move to a full-scale launch. Huge retailers and restaurant chains will study traffic patterns and demographics on a scale that puts political pollsters to shame.
I’ve always been envious of these types of research. It seemed to me that market research budgets the size of your average emerging nation gave the big guys an unfair advantage.
However, the Internet has become something of a great equalizer in this arena and even small business owners with a little web savvy can judge market potential enough to keep them from making big mistakes. This is especially true if your plans are to offer a product or service via an ecommerce platform. Here are five (increasingly) sneaky ways to get a good gauge of how successful your product or service can be.
Google trends. A good place to start is Google trends. You simply enter search terms related to the product or service you’re considering and see which way the trend is moving.
For example, if I were thinking about selling ultra-long knitted scarfs I would start out with that search term and I would quickly find that there’s not enough search traffic to generate a graph. When I simplify it to merely “scarfs” I get some results and as I look at the trend I see that it seems to be on a downward slope. Uh-oh. Plus the trend graph shows quite starkly how seasonal the interest in scarfs is.
Keyword competition. Next I would turn to Google’s keyword planner tool, and you’ll need an AdWords account for that. Again, there was no data on the keyword “long knitted scarfs” but the competition for “knitted scarfs” is high. I would probably have to bid around $30 a day to get about eight click-throughs to my site. During November 2014, fewer than 600 people were searching for knitted scarfs on Google and that’s when interest peaked out. Competition for these eyeballs is high.
This information from Google is fine, but maybe your scarfs are so incredible, once people see them they will love them. Also, maybe they are so incredible people would be willing to pay a premium for them. Now we’re talking! We need to show them to potential buyers.
eBay. Test out your products on eBay. You can do this with limited stock, and frankly, some people do it with no stock. The great thing is you can actually get a feeling for how much people would be willing to pay. If you have an item that lends itself to the auction format, you have a great test market that is just a few clicks away. Some people set up auctions, gauge interest and then cancel the auction. They never even have the products they are listing. eBay auctions can be canceled when 12 or more hours are left before the scheduled end.
Presales. Taking presale orders is a good way to measure demand with little risk on your part. Many credit card companies won’t allow you to charge people before the product ships and it’s certainly good practice to follow that guidance even if it’s not required. However, the fact that people are willing to give a credit card number to reserve their product shows that demand is real. Excellent website builders like WIX, Weebly and Square make it easy to create a small ecommerce site. You can have one up and ready to test demand with preorders very quickly and with little expense.
Poll your prospects. Ryan Levesque – author of “Ask: The Counterintuitive Online Formula to Discover Exactly What Your Customers Want to Buy” – has developed a very thorough system for using surveys or polls to determine if there is demand for a product and exactly where the “sweet spots” in that demand are. If you have an online community or popular blog that has some related products you could offer, poll your community to discover their pain points.
With this system you’re looking for truly motivated people. You want to find problems that people are passionate about solving. If you decide to put a poll on your website to make some inquiries, allow your users to enter their own comments. If their comments are no more than a few words in length, they aren’t passionate. If they go on a rant, you’re probably onto something.
Leverage several of these fast, easy and cheap ways to gauge demand for your offering and you will be able to weed out the bad ideas in almost no time. Once you’ve done that you can concentrate your talent on the remaining good ideas and dramatically increase your odds for success.
Image: Public Domain.