Are you looking to enter new markets or better serve your existing markets? If so, here's a technique that will allow you to gain insightful market research and learn best practices REALLY QUICKLY.

And for no cost, thanks to Google.

The other day, my son told me he wanted to take up lacrosse, so let's use lacrosse as our example. So, let's say I want to get into the lacrosse business, selling equipment through stores and/or online.

To start my market research I went to Google's new keyword search volume tool here: https://adwords.google.com/select/KeywordToolExternal

I typed in "lacrosse" and Google then shows me all the related keywords and how many times people searched on them last month. It immediately showed me the following:

Keywords_________ Approx Monthly Search Volume
lacrosse.......................... 2,740,000
lacrosse equipment........ 110,000
women's lacrosse........... 74,000
girls lacrosse.................. 60,500
high school lacrosse...... 49,500
lacrosse sticks................ 49,500
lacrosse wisconsin......... 49,500
lacrosse camp................ 40,500

From this, I see that lacrosse is a pretty popular sport; in fact, when I download Google's list of the top 150 lacrosse-related searches, I see that the sport gets 4.9 million searches per month.

To put this in perspective, and to see if the market is growing or expanding, I go to Google Trends at http://www.google.com/trends and type in "lacrosse."

Not only does Google Trends show the number of searches that people have done on lacrosse monthly beginning in 2003, but when I type in additional sports like football and basketball, I can see the relative size of lacrosse. Also, from the Google Trends graph, I quickly saw that lacrosse is a seasonal sport with peaks and valleys in search volume.

My next area of research is to determine the level of competition for selling lacrosse equipment. For this, I simply type in terms like "lacrosse," "lacrosse equipment," and "high school lacrosse." I find that general terms like "lacrosse" and "high school lacrosse" have very little competition (based on the few Sponsored Links I see on the top and to the left of the search results), thus providing a significant opportunity if I can figure out products and/or services to fulfill the needs of those who search these terms.

For the term "lacrosse equipment," which is a term that shows more buying intent (i.e., someone who searches this term has more intent to purchase a product than someone who simply searches "lacrosse"), I see several more competitors. Finally, when I search the term "lacrosse sticks," I see even more ads, since someone who types in this phrase has even more buying intent.

The next tool I use is Google's Traffic Estimator, located at https://adwords.google.com/select/TrafficEstimatorSandbox, which shows both the estimated clicks per day I would receive if I advertised on the term, but more importantly, the average estimated price that I would pay each time someone clicked on my ad.

Why is this important? Well, it gives me an estimate of how much my competitors are spending each time someone clicks on their ads.

For "lacrosse sticks," Google estimates that the top 3 advertisers pay between $0.99 and $1.26 per click.

The final stage of my research is to return to Google.com, do a search on "lacrosse sticks," and conduct competitive research. I click on the ads of the companies advertising on the keyword, and figure out how they are generating more than $1.26 per click.

I assess things like:

1. How their web pages are organized

2. Whether they are trying to generate profits from merely a one-time sale or whether they have long-term revenue generation systems (e.g., a paid membership club)

3. Whether they have a newsletter or other mechanisms to collect the email addresses of their prospects so they can market to them on an ongoing basis, etc.

This process provides me with significant competitive intelligence on current practices in the industry.

So, maybe this takes a little more than 10 minutes to thoroughly assess a new or existing market, but this technique and the tools listed above will quickly give you great information and insight really quickly.

 

Henry Ford once commented that had he asked customers what they wanted, they would have said “a faster horse.”  As Ford knew well, market research can have many pitfalls.

However, market research is an integral part of any business. From the conceptualization stage of a new venture, to a vast expansion effort by a Fortune 500 company, a business is always better off for adhering to the old adage “know thy customer and thy market.” For more mature companies, such research most often plays a role in the process of innovation. Gauging market sentiments helps to identify opportunities to service new customers, better serve existing ones, or revise current business strategies.

So often, though, we see huge corporations spend small fortunes on market research, only to launch new products that fail with epic proportions (remember Crystal Pepsi?). How can it be that after going through highly standardized practices for these investigations that companies come back so far from the mark?

One school of thought suggests that it is not the tools of market research, but rather their misuse, that can send a company down the wrong track. Talking to the wrong customers and asking the wrong questions can be exacerbated by having the wrong members of your team interpret the data. On top of that, there are times where even when presented with the proper research, improper decisions are made. As any or all of these factors can corrupt your research efforts, the process begins to look more and more daunting, with few reassurances that the right decisions and strategies will appear.

In order to combat the problems that result from faulty execution of market research, it is important to take a step back and examine what the goals are of traditional market research. The first, most common experience companies have with market research is typically during their initial business planning efforts. While sometimes for these young firms market research is involved with product or business conceptualization, oftentimes it is more of an after-thought, serving the purposes of a pre-existing business model. That means that many companies can become accustomed to the inappropriate practice of using market research as a justification for what they already intended to do, rather than a tool which can guide their foundational efforts. Once a company develops this bad habit of using market research to show them what they want to see, they are forever trapped in a loop of misusing market research tools, and going about the process the wrong way.

To properly execute on market research, the most important thing you can do is to open your ears. First, this means not engaging your most demanding customers in the process. Yes, you want to do your best to keep this category of client satisfied, but true innovation will result from learning more about your worst customers, or the one’s that don’t exist yet. Looking outside of the box (or in this case, past the evangelist pool) will help you to see the forest for the trees. Next, with Henry Ford's adage in mind, avoid asking questions that directly ask what your existing customers want. This might seem counter-intuitive at times.  However, focusing on creative solutions to a market need will help anchor your research, and the conclusions you will pursue.

 

To make your new venture succeed -- whether you are creating a new product, constructing a hotel, or developing a community center -- you must convince investors and/or management to fund your initiatives.

Feasibility studies play a critical role in this early planning and fundraising process.

A feasibility study is a detailed investigation and research analysis of a proposed venture or development project. The purpose of a feasibility study is to determine whether it is technically and financially feasible to move forward with a new project.

An effective feasibility study demonstrates the following:

• That your ideas are sound


• That there is a need for your venture


• That your execution plan is practical

To help you navigate through the feasibility study development process, we have just released a special report titled:

13 Costly Feasibility Study Mistakes – And How To Avoid Them


In this free report, you will learn:

• The key mistakes to avoid when conducting a feasibility study


• The important difference between “data” and “intelligence”


• How entrepreneurial over-confidence can doom a feasibility study

Click here to download the report.

We speak every week to many entrepreneurs and managers of emerging and middle market businesses seeking our assistance in strategizing, drafting, and packaging business plans.

Sometimes, the client has a very clear idea of their business vision, their key value propositions to their core target customers, an understanding of the competitive landscape in which they exist, and their mission critical milestones.

More often, however, folks come to us with a great idea, a contagious enthusiasm, and a gut, intuitive "feel" that there is a real opportunity in the marketplace for their business vision.

At Growthink we naturally share this enthusiasm, passion and excitement, and are fundamentally eager to dive right into the business plan drafting and the business-building process. We pride ourselves on being entrepreneurially allied with our clients and embodying a proactive, solutions-focused approach to the challenges and heartaches inherent to the entrepreneurial process.

But almost invariably, in short order what is revealed is what Bette Midler sang about in “From a Distance” – that “the world looks blue and green, and the snow-capped mountains white…and the eagle takes to flight” – with the unsaid being that upon closer inspection there is very little that is without blemish nor complexity.

Nowhere is this truer than in a business plan. There are no perfect ideas – no “slam dunk” business models driven by such creative insight and breakthrough that the business plan development process is simply a matter of documenting it on paper for posterity's sake.

Instead, the sometimes convoluted, sometimes messy, and always challenging process of fleshing out the various multi-faceted aspects of a business – its marketplace, its competitive realities, its profit model, and its “Monday morning” action plans – is where the new business idea will face its first real viability test. It is not an undertaking for the faint of heart nor for the lazy as it is hard, time and energy-intensive work. Those, however, that get through it can take solace in that they have dramatically increased their business’ likelihood of eventual success - and correspondingly - its value.

For Bette Midler, click here

It's an easy trap to think of market research as a data point collections process when in actuality, it's a creative undertaking where synthesis, strategies, and ideas are paramount.