Carrying out your own market research
If you have a great idea for a product to sell, you might be keen to get it into development, look for manufacturers and think about production.
However, before you spend time or money on any of this, you really need to spend time on customer and market research.
Why you need to do market research
I know from experience that creating and launching a product isn’t easy. It takes time, hard work and commitment.
It’s much less daunting if you’ve spent time upfront ensuring your product is A, something people want, B, something they’ll pay for and C, can make a profit. Knowing this can help you feel more confident about making your initial investment and your chances of seeing a return on it.
Hopefully I’ve now convinced you that this step is essential! Here are my top tips for doing your own market research.
Know who your ideal customer is
Knowing who your customer is can help to ensure you create the product they want and need. It also means that if part of your research is seeking feedback from others (which it should be!) you’re asking the right people.
A common mistake I see is people asking for input on their product idea from anyone and everyone. In my experience, asking close friends and family for their opinions can go one of two ways. Either they really want to support your idea and are really enthusiastic about it, or they worry about the potential risks and are very cautious.
Both of these obviously come from a good place. However, if you’re creating a product for new Mums, your Grandad won’t necessarily be the best person to give you feedback, so by all means share what you’re doing – but the feedback that really matters is from the people who might actually buy what you’re going to be selling!
In short – don’t listen to everyone – listen to the people who might actually spend money with you down the line.
Beware your own bias!
It might be that you’re your own ideal customer. I.e. Your product is for runners and you run 4 times a week. However, remember that you’re just one person and the product you think other runners need, might actually only appeal to you.
If this is the case, be sure to stay open-minded and take feedback from others on board (even if you don’t necessarily agree with it all).
it’s really important to create a product that your customers actually want, rather than the product you want and therefore think they want too!
Ask good questions
Now you know who your customers are, the next step is to get some feedback.
Remember, you don’t just want ‘yes that’s a great idea I’d buy it’. As nice as that is, the most valuable input you can get is to find out what your customers want and need from a product like yours.
Example questions to ask are:
- Have you ever brought an X before?
- If not, why not?
- If yes, what did you like about it?
- How do you feel it could be improved?
- What did you pay for it? Was it worth that?
- ‘If you were buying an X, what would it need to do / be to exceed your expectations?’
If you have a prototype you could share that for feedback too. The most important thing is to listen, keep an open mind and take notes. Remember, this is really valuable!
Look at similar products
It’s good to know if there are any similar products on the market right now.
If so, do people buy them, what do they think and how much do they pay? All of this can help shape your own product – and you can get it all by doing a bit of online research.
Even if you never plan on selling there, I like to use Amazon for this, as there’s a huge range of products and most will have reviews you can read and learn from. (And if the product(s) you’re interested in have no reviews, think about what this tells you too…)
Take note of the features, selling price, etc, but the most useful input (in my opinion) comes from the reviews.
Look at 5 star reviews to get an idea of what people love about the product. Then look at the 1 star reviews to see what they don’t like. This is your opportunity to improve!
For example, if customers say the product is too big, the instructions are too complex, sizing is off (whatever it is), this tells you what your product needs to have or do in order to be better than others in the market.
Seeing what else is out there will also help you figure out where your product fits in (i.e is it a premium product, or is it a simpler version) and give you an indication of how to price it.
A note on price
It’s worth mentioning here that when speaking to ideal customers, asking ‘what would you pay for it’ is a really useful question.
I always recommend working out your selling price before you find out what it will cost to produce it.
Another common mistake I see is people pricing their product based on the cost to produce, then adding a margin for profit.
Instead, I recommend pricing based on where your product fits into the marketplace (see above). This way you know the price you set is realistic and when it comes to looking for a manufacturer (after you’ve worked out the potential selling price) it makes it easier to narrow down suppliers, as you have an idea of what you need the cost to be (and if it’s lower then great – more margin for you!)
A final idea – can you fund your production costs?
There’s no better way to find out if someone will genuinely buy something, than asking them to pay for it!
You could offer a discount to anyone who places an order before a set date and generate interest before your product is even ready.
The ultimate goal here would be to get some pre-orders and make some money before you’ve even created anything.
Just to stress, only actually take money if you know you’ll definitely have a product to sell or you’re prepared to pay back every penny you take.
While this might seem like a lot of work (it is!), I promise it’ll pay off in the long-run and increase your chances of creating a product that people actually want to buy.