One of things I enjoy most about vacation is the flood of random thoughts that fill my mind when the noise of daily life is quieted. My recent getaway to the Gulf Coast was no exception. As I settled in at the beach one day, my thoughts wandered to a half dozen phone calls I’d taken from entrepreneurs over the previous month. Each conversation went something like this:
Caller: I need marketing research.
Me: Great! What questions do you need to answer?
Caller: I have a cool new (insert product or service here) that people are going to love, and I need to get the word out about it.
Me: Oh, so you’ve already done research and now you’re ready to start marketing?
A few seconds of silence followed by…
Caller: Well, I didn’t do any formal research, but I’ve talked to a lot of friends and business people I trust, and they all agree it’s a great idea.
At this point, I know I have two options: 1) Dive into a line of questioning that helps the caller realize the more research you can do upfront, the more you can mitigate the inherent risk of a new venture, or 2) Provide the number to a great marketing agency and hope the caller has a savant-like understanding of customer demand.
As marketing director for a market research firm, I’m always taken with entrepreneurial enthusiasm—people start businesses based on something they love and genuinely believe armies of customers will recognize the idea’s brilliance, place the same value on it and line up ready to part with fistfuls of cash. But this same enthusiasm is often a blind spot. In the excitement to go to market, many entrepreneurs skip their homework. As Peter Drucker believed, market research is the quintessence of marketing—it’s simply not enough to believe you have a great product, you need accurate, thorough information about prospective and existing customers, the competition and the industry.
Of course, market research—when done well—can be a considerable investment. But, when US Census data indicate half of the businesses started in the United States live five years or less, and 95 percent of new products fail, doesn’t it make sense to determine the feasibility of a business idea before committing substantial resources to the venture? While making decisions without research may work from time to time, long-term success is not likely without regular efforts to gather information.
I know…it’s easy for me to spend other people’s money, but my advice is to do your homework. Once your business is up and running, you’ll face plenty of marketing challenges from customers to competitors to dynamic market conditions—worrying that your idea is built on a shaky foundation doesn’t have to be one of them.
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