Once you have followed all the advice in this post: How To Find Out if Your Product Will Sell you are ready to move onto the next stage: Understand Your Market.
Consider the use of the internet among your target audience (eg. plumbers) and check internet usage in the country in which you plan to launch this online business.
Many countries have low penetration with less than 20% of the total population having access to the internet.
This chart (Wikipedia.org) shows internet users by region and as you can see there are many regions where the internet usage is below 50%.
Therefore consider where you got your potential market size numbers from and reduce your total potential market size number by how many users will have access to the internet in your market and therefore the ability to access your online business.
SWOT Analysis
I can’t stress enough that you need to understand any market you are planning to enter with a new product.
The total market size which we’ve covered will give you some idea of future potential.
It is always a good discipline to do a [1]SWOT analysis of a market and while you are not investing millions, this kind of detailed analysis may seem like overkill. But it is a very useful and good discipline to get into the habit of doing.
I have included a the-ten-percent-club-swot-analysis-template so I suggest you spend a few minutes on it and you may find some worthwhile ideas or thoughts you may not have already considered.
For example, a threat to your market may be technology getting cheaper and while you can charge $10 for that app now, you may have to sell it for $1 down the track. Perhaps an opportunity is the changing tastes of your potential customers which could spell the demise of a competitor.
You will need to know your competition inside and out. Read all their marketing, buy their products, subscribe to their newsletters and thoroughly read their websites.
So you know the expression “keep your friends close, but keep your enemies closer”, well I believe it is always worth keeping that in mind in business. It really pays to know what your competition is doing and if you can find out what they are planning to do or not to do (although that may be difficult), then even better.
Surveys: Ask the market
One great way to test your proposed product and validate its place in the market is to stage a short survey. This will cost a small amount of money, however it can be an excellent way to gain some knowledge from potential online customers. This is also one way to determine your potential market penetration as mentioned earlier in this chapter when we were estimating the total market size.
Armed with these survey responses you can adjust your offering. You may find words or terminology that your customers use that are new to you.
Here’s a very brief step by step process to set up an online survey using a free online survey tool called Survey Monkey (www.SurveyMonkey.com). Note that this does require some website knowledge so you may need to seek assistance for this:
- Set up a Survey Monkey account (this is a free online survey tool)
- Devise your ten free questions. Be sure to have a combination of multiple choice and free form text. While it is definitely important to gather some useful statistics with multiple choice, it is also very important to listen to the words your potential customers use.
- Set up your Google Adwords account if you haven’t already and perform the keyword research covered earlier
Note: If you do not have any experience in setting up a Google Adwords account then I suggest you get help with this. Alternatively if you are great at following detailed instructions then Google itself provides many step by step instructions. There are also YouTube videos on the subject.
- Depending on how you’ve set up your Google Adwords account you may be able to insert the survey’s URL into your ad. If not, you will need to create a webpage with the link in it. You can set up a WordPress webpage for free for this.
- Create a few ads that will capture your target audience’s curiosity
- Set a daily budget that you can afford (suggest at least $10)
- Set your ad campaign to live and if you have got your keywords and ad wording right, you should have survey responses within a few days
[1] A SWOT analysis comprises Strengths, Weaknesses, Opportunities and Threats