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 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.
During the process of growing a business, entrepreneurs, business owners and managers are often faced with the question of whether to bring in an outside business business planning consultant. This can be an especially challenging decision for entrepreneurs, who are by definition independent and self-reliant. However, it’s important to recognize that even the most talented businesspeople can benefit from the support and guidance of an experienced consultant (or consulting firm).
From our perspective, here are some of the key benefits to bringing on an outside business consultant.
Perhaps the most common benefit a consultant brings is his or her experience. More specifically, the consultant’s experience should directly fill gaps in the entrepreneur’s or management team’s own skillsets.
For example, a businessperson may be gifted at recruiting employees and partners, and motivating them to achieve the company’s strategic goals. But that same person may struggle to assemble a detailed financial model, conduct strategic market research, or convey the company’s growth plans in a succinct, marketable written document.
A skilled consultant or consulting firm often fills these functional gaps, in order to help the company complete a particular task or achieve a milestone.
Prior Domain Experience
Especially when venturing into new markets or devising a new product or service offering, a client may seek a consultant’s experience in a particular domain. Experienced consultants and consulting firms can apply past consulting experience to new client engagements. Aside from simply getting the project done, this familiarity with various markets and business models is a value-add that an entrepreneur or manager would not likely otherwise receive, without conducting months or years of competitive and industry research.
Engaging with a consulting firm provides more than smart, timely advice on crucial business decisions. Specifically because they are not engaged in the day-to-day operations of their clients' businesses, consultants are able to analyze a business decision from a position of greater objectivity. By working with an experienced, credible consultant, you receive 3rd party, objective analysis of your situation. This perspective is critical for gaining organizational consensus around one course of action out of a sea of competing choices, and it helps assure you that you’re following the best business opportunity.
Time (Opportunity Cost)
Aside from the expertise and objectivity that a consultant brings, perhaps the greatest value is the simple fact that another person (or firm) is handling a part of the burden. Engaging with an outside firm to assist with tactical or strategic responsibilities allows the internal management team to remain focused on the critical day-to-day actions and responsibilities that drive ongoing revenue and sustain the operations of a company. Each person and company may set a different value on their own time. However, often times it is economically beneficial to hire a qualified firm to efficiently manage a project, rather than allocating resources internally or hiring additional full-time staff to fulfill the need.
Aside from the direct value of a consultant’s domain and functional expertise, engaging with a consultant or consulting firm can provide other benefits. Because of their existing relationships, established consulting firms can introduce and connect clients with a wide array of potential customers, strategic partners, supplies, investors, and board members, etc.
What Do You Think?
What are other reasons why you have hired an outside consultant? What advice would you give regarding the pitfalls and benefits of hiring a consultant?
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.
Earlier this month, Walt Disney Co. made an interesting decision regarding their theme park pricing strategy. Faced with slowing sales growth at home in the US, the company decided to raise the price of one-day admission at its largest resort by more than five percent.
While the five percent hike for children and 5.6 percent hike for adults at Walt Disney World only resulted in increases of approximately four dollars, the decision was a controversial one that lead to business pundits both supporting and chastizing the company.
When your company is faced with the effects of a recession, like slowing growth or decreasing sales, what is the real best course of action?
Like with most things in business: It depends.
A good rule of thumb however, is that unless your company is renowned for its low pricing, you're safe to raise your prices. That doesn't mean you can start charging $16 dollars more for your cheeseburgers, but it does mean you have some flexibility. Making an honest assessment of how pricing impacts your clientele will position you to make necessary adjustments.
For Disney, the assessment could have looked as simple as this:
The number of people who will take vacations this seasons will undoubtedly drop a bit when there is so much widespread emphasis on pinching pennies. That said, for those families that do take the initiative to hop a flight, rent a car, and/or put every one up in a hotel for a few nights, the difference between $71 and $75 dollars for admission will not be the straw that breaks the camel's back.
While price is an important factor in purchasing decisions, the vast majority of people don't buy based on price alone. They buy based on value. However, a larger percentage of consumers will buy based on price alone, in the absence of any other value indicators. The key is to effectively communicate your value.
When you start to feel the squeeze of a slowing quarter, don't be afraid to go against the initial instinct that many have to drop prices right away. Sometimes, boosting your price can be just the tool you need to get you over the hump and get back to making money.
Growthink is happy to announce our upcoming work with Safari Air, the world's first carbon-neutral luxury private airline. As a strategic advisor to the airline, Growthink will assist with business development, growth strategy and marketing initiatives.
Safari Air is an exciting fusion of luxury service and eco-friendly philosophy. Through an innovative pay per seat model, clients will have premium access to Honolulu, New York City, Puerto Vallarta, and Cabos San Lucas. Flights will possess everything from concierge service and MacBook laptops to an unlimited selection of Netflix movies. With a keen eye on luxury, Safari Air has still found a way to incorporate a green mindset and has made a unique commitment to operate without a carbon footprint.
Safari Air joins the growing roster of Growthink's engagements in the alternative energy and carbon mitigation space. We're glad to welcome Safari Air to our exciting list of clients!
As individuals and businesses alike struggle to deal with a wayward economy, one of the first things we can do is look outward for tools and techniques to help weather the worst of the storm. Fast Company founder Bill Taylor recently examined three companies that seem impervious to market fluctuations and the economic turmoil faced by their respective competitors, and the lessons we can draw from their successes.
Honda, Netflix, and Southwest Airlines are the companies that make up last quarter's victorious triumvirate. While Detroit automakers have been suffering from staggering losses here at home, Honda has reported $1.7 billion in profits. Netflix has reached a subscriber base of 8.4 million households. And as airlines continue to flounder, Southwest Airlines showed a 15% increase over last year, hitting just over 17 years of consecutively profitable quarters.
What are the common threads between these companies that keep them flying high while others scrape by or shutter their doors?
1. Connect with Your Customers
Forging a relationship that goes deeper than the nuts and bolts of the product or service your company provides is a crucial component of success, especially when financial outlooks across the board are bleak. Relationships rooted in identity and emotion help a company tip from useful to essential.
2. Go Big or Go Home:
It used to be really easy for companies to aim for the middle. By being decent at a variety of things, they could hit the widest part of a market's bell curve. While that was a sound technique in the past, it is no longer the case. It is now integral to corporate success to be the best at something. A company must, with no exceptions, determine what they are the best at and execute on it. As Taylor states, "Southwest has always managed to combine low fares with great service--anything else is a distraction." By being the most affordable, having the greatest customer service, or providing the most exclusive product, a company can distinguish itself in the mind of the customer.
3. Be Yourself, Even When Things are Changing:
This rule might be "easier said than done" for many companies, but it holds true. To succeed, a company must stand by what they believe in. While it is important to test and tweak strategies, the overarching approach must be a steadfast attachment to your plan, and the value proposition you've developed in the aforementioned stage of defining your businesses' strengths. While many large companies like Ford appear to be in constant "react" mode, rushing to adapt in light of market conditions, companies like Honda reap the rewards of embracing their long term strategies. Finding consistency in your business will give success an opportunity to find you.
For the growing business, the implementation of carefully targeted, high-quality marketing initiatives can make all the difference. The world of marketing, however, consists of a broad amalgamation of techniques and sub-disciplines that should, ideally, work harmoniously to convey what people need to know about your business. How does a company ensure that they’ve maximized the variety of options that marketing can provide?
Guerilla Marketing guru Jay Conrad Levinson recently wrote his thoughts on the most frequent mistakes companies make with their marketing initiatives. Through a list of 11 missteps, the problems are effectively boiled down to three main misconceptions:
1) The heart of marketing lies in the superficial, the “whiz-bang”, or the punch-line.
2) A business only needs one marketing mechanism at a time.
3) If the marketing is good enough, the results will be quick and earth-shattering.
The first of these errors takes hold when marketing executives lose site of their main purpose, which is to motivate people. Distracted from the primary mission, they might aim for a clever or humorous marketing stratagem. This is a trap. While humor or cleverness can successfully engage a potential client or customer, chances are those elements will overshadow the product or service you’ve set out to promote. Similarly, too much emphasis on entertaining your audience can eclipse your product or service as well. The job at hand is to make the truth fascinating – not to entertain for the sake of entertaining.
The second common mistake, especially in the case of many small businesses, is under-executing-- implementing only a pinch of the marketing ingredients at your disposal. Marketing areas such as direct mail, telemarketing, brochures, or phonebook advertisements, when executed properly, can provide a fantastic ROI for the growing company. Any of these elements alone, however, is just a drop in the bucket and can prevent you from reaching the full breadth of your target audience. Diversifying your marketing initiatives isn’t an extravagance – it’s a necessity.
The last, and arguably the biggest, misconception is that marketing is a “panacea” for the business; one that results in customers breaking down your doors moments after the launch of a campaign. It is true that strong marketing efforts will (and should!) correlate to increased profits, but it’s seldom overnight, and it’s wrong to expect miracles. As will many other aspects of growing a business, patience is a virtue.
So if these are the misconceptions, what is a true picture of marketing? As stated by Levinson, "Marketing is an opportunity for you to earn profits with your business, a chance to cooperate with other businesses in your community or your industry and a process of building lasting relationships."
Imagine you are at a job interview. Right before the interviewer offers you a position he states, "Unfortunately, I cannot tell you the details of our project. You will have the opportunity to make mistakes and struggle, but eventually we may do something that we'll remember the rest of our lives." Would you eagerly jump at this project or would you stand up and walk out?
This was the real life scenario created by Scott Forstall, the senior vice president of Apple, who assembled the iPhone development team. He called in a handful of stand-out Apple employees from various departments in the company to speak with him, and only those who quickly leaped at the opportunity were offered positions. Forstall's approach to recruitment was based on the belief that the new project’s success would be dependent on individuals who were more attached to challenging themselves and pushing boundaries than the ego gratification that came from shining where they already were. In a recent New York Times article, such individuals were described as possessing a “growth mind-set.”
This classification was derived from the research of Carol Dweck, a Stanford psychologist and author of “Mindset: The New Psychology of Success.” She has carefully studied the ways in which people approach life, and research suggests two main groups: those like the aforementioned Apple employees who believe their own abilities can grow and change, and those who believe that talents and intelligence are intrinsic and unchanging (referred to as a “fixed mind-set”.)
These simple classifications can have a remarkable impact on all aspects of one’s life and likelihood to succeed. In her work, Dweck has found that a growth mind-set almost always trumps a fixed mind-set, due in part to the fact that many with a fixed mind-set are overly invested in the reputation of their talents, resulting in a fear of making mistakes and an attachment to looking smart. Dweck has said that those with a growth mind-set, “are the ones who really push, stretch, confront their own mistakes and learn from them.”
Case studies on many top executives from the ranks of General Electric, IBM, Xerox, and others show that a growth mind-set can not only lead to personal successes, but can revolutionize a work-force as well.
Which mind-set do you lead with?