How to select the correct market for your business idea
You’ve got new product or a service that will be a huge success and make customers come running into your business. But is it really something people want? Or is it just something you think they want?
Having solid information about what your customers want to buy, rather than what you want to sell them, can save you hundreds of thousands.
Here are four ways to think more critically about your business idea before you find yourself stuck with products or services no one wants or needs
Accept the market as a judge
The harsh reality is, whether you want it or not the market will decide if you are successful or not. You have to make the numbers support your idea by getting information about the basics such as:
- Revenues for your category in your local market by splitting it regionally and nationally.
- Learn and get to know your competitors
- Determine by researching if the market is new and growing or if it’s static and mature.
Select already working markets and pick the one that suits you more
Start broad, general and proven that the market is generating results. Then think about a specific niche market. At this stage, you can’t go too narrow. In fact, go as narrow as you can and see what the opportunities are in the smallest niche markets possible, then expand from there.
Then come the problems that need to be solved and the services that buyers seek. With a narrow niche market, you can rapidly grow and easily be the sole provider. You’ll also be in the position to be price maker with profitable margins rather than a price taker with lower prices and thinner margins. And in the end, you can be a leader in a less competitive landscape.
- Do not focus on market share
Going after new customers or buying marketing share is the most expensive way to build your business. But on the other hand, if you choose to go after repeat business and customer loyalty, allows you to change your objective from, “How to get new customers” to “How much can I sell to each of my customers, and how long can I keep them?”.
Focus on achieving repeat business like an insurance policy for your marketing program, as it is far less expensive to sell to a current customer than purchase a new one. Think about how you can retain your customers (build a relationship) for repeat business so you can get an exponential return on your initial advertising or marketing investment.
Once you build a loyal customer base, you’ll greatly reduce your outside marketing costs by using good old-fashioned word-of-mouth advertising.
- Test your ideas
Τhere are a lot of ways to test your ideas without being expensive. This is by creating a simple website, to place your retail products into existing stores for delivery.
It is better to pay the price in terms of time and effort now in order to for you to learn what you don’t know about your market and buyer. The response that you will get, will tell you what buyers in your market want, need and desire. You can then use that information to enhance your offering or to discover a more profitable market and business than you initially conceived.
Growing loyal and satisfied customer base along with a fair amount of personal wealth in a commercial, profitable enterprise is far more rewarding than being right about an idea whose time might never come.