Chapter 3 How to Conduct Online Market Research for your Ecommerce Business
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Conducting market research for your small business idea is not only wise, it’s essential.
Taking the time to go through this process will help you uncover whether or not there is a healthy demand around your business idea.
No matter how stellar you feel your idea is, you’ll want to spend some serious time evaluating market demand and gathering hard facts before you order 2,000 product units or sign any contracts.
In this chapter, you’ll learn to use your startup capital strategically.
When completing market research around your small business idea, there are several different methods you can use. However, it’s always smart to use a combination of tactics to be certain you have an accurate picture of your market and make the best business decision possible.
1. Conduct Keyword Research
Looking for a super easy, fast and free way to get a feel for your product or business demand? The Google Keyword Planner helps you visualize how many people are searching for your business or product idea during any given time period.
An added bonus is that this tool will provide you with various related keywords which can help you generate ideas around which words to use in your product name, descriptions, blog posts and your website as a whole.
Conducting keyword research will tell you what consumers are searching for all over the world.
If no one is looking for what you want to sell, that’s not a good sign. On the other hand, if thousands of searches are being done for keywords closely related to your product, you might want to take the next step sooner rather than later.
Google has gotten wise to entrepreneurs using this tool to conduct keyword research for their online businesses. When you go to create an account with Google Adwords to start using the Keyword Planner, you will be prompted to start an account, enter a dollar amount and possibly even enter credit card information.
Don’t panic. Go ahead and enter in $1.00 and then make sure to suspend the campaign before you finish creating your account. You won’t need to start an actual campaign at this point.
2. Find Trends and Put the Big Picture in Perspective
Another cool Google tool you can use is Google Trends.
Do a search for a product or business idea, and then view the directional search demand for that keyword throughout the past few years (you can go all the way back to 2005, as of this writing). You can also compare the volume of searches between a few terms, geographic locales and even view how particular events affect search popularity.
3. Examine Social Media
Examining social media is a great way to start understanding the volume of conversations and mentions around your business idea. Social media also helps uncover aspects of your target market that can inform your marketing efforts later.
By probing into all of the different social media channels out there, you’ll start to identify how potential customers talk about your product or industry as a whole.
This will help you learn their language so you can leverage it later via your product descriptions, blog posts, ads, social media and promotions. Using the language of your target customers will help drive quality traffic to your site, build a loyal customer base and increase conversions.
First, take a look into hashtags and what’s trending overall.
Use Instagram’s search tool the same way you did Google Trends. Hashtag and type in your product to see how many others are using that hashtag, related hashtags and popular images. You’ll want to use similar keywords and images on your social media accounts as well as on your webstore to engage the already socially active community.
4. Build an Online Store and Test the Waters to Gain Momentum
Dive in and open an online store.
You can do this long before your product or service is ever developed to start driving traffic or even to collect some pre-orders. This tactic can help you gain immediate feedback from your target consumer or gauge demand for your product before manufacturing or buying inventory.
Create some ads on Google and Facebook and spread the news via word-of-mouth. You’ll be able to start attracting potential customers who can provide feedback, sign up for your mailing list, or be placed on a waitlist to be notified when the product has launched.
The investment community is more likely give money to a company that has shown proven market demand by collecting pre-orders or signups from real consumers.
A word of caution: make sure your website is clear in communicating that your product or service is not ready to ship. Also, provide an estimated date for release and details around whether or not you will provide refunds. You’re not trying to take people for a ride — you simply want to test the waters and gain momentum to carry you to the next step.
Routes to Building an Audience without a Product
This is tricky, but doable. Leveraging an already existing audience to sell new product to is a great way to quickly scale a business, and there are various ways to do this.
Launch a Narrative Brand
Narrative brand’s do incredibly well online. This is because they use content to drive organic traffic and engage audiences on social media platforms. Casper is a great example of a narrative brand. Their Van Winkle blog attracts hundreds and thousands of monthly readers –– giving rise to the overall Casper brand and building long-term trust with readers.
Spearmint Love is another brand which used a narrative long before selling any products (read more about their incredible story here). Sheri Lott started the Spearmint Baby Blog is 2009 after the birth of her first child. The blog reviewed products and gave advice, eventually earning her thousands of Facebook and Instagram followers –– many of whom were asking her where they could buy the goods. Three years in, Sheri decided to launch her own store, selling the items she most loved.
Today, Spearmint Love has hundreds and thousands of followers, and is about to relaunch the blog to continue educating and engaging customers for the long-haul.
Use Kickstarter or IndieGoGo
Kickstarter and IndieGoGo give you the crowdfunding platform and audience to build a customer base and an email list. The support you garner on these sites gives you communication access and eventually product-touting people who can spread word-of-mouth marketing.
Plenty of businesses have taken this route to launch, and even use it for new product launches as well.
Redshift Sports, for example, used Kickstarter to build support for their cycling-niche product, quickly earning all needed funds to build the product and getting press coverage as well. The team still uses Kickstarter to test new ideas and launch new products.
Native Union follows a similar strategy on IndieGoGo. New products are launched on that platform, and when they gain enough support, the team builds the product and launches it on their site.
5. Leverage Your Networks and Get a Temperature Check
Leveraging your digital networks is a must, including your Twitter, Facebook and Instagram followings.
These folks are all potential customers who can help gauge interest, fulfill some test orders and offer valuable feedback at every step of the journey. Make sure to let them know you want real, honest feedback, not that sugar-coated stuff that serves no purpose.
Here are some great forums to get honest feedback:
- BigCommerce Community
- Ecommerce Entrepreneurs Facebook Group
- Marketers and Founders Facebook Group
- Startup Slack Channel
- Bootstrapped Chat Slack Channel
- Side Project Slack Channel
- #SmallBiz Slack Channel
6. Scope the Competition
You’ll want to take a look at your competition at this point in time to get a lay of the land. Here are a couple questions to start you off:
- Is there a clear owner of the space?
- Is the market saturated with competitors?
- Can you spot a weakness in the competition that you can take advantage of?
Don’t get discouraged if the market feels full at first glance. That just means you’ll want to take a deeper look to see if each site is actually performing well or if there is an opportunity for improvement.
So often those businesses that come to market first make mistakes in the uncharted territory. Think about MySpace and Facebook or even Yahoo and Google. Often, the second-comer wins customer loyalty.
7. Google It
This may seem obvious, but many potential entrepreneurs don’t search for market data or surveys on their industry or specific business idea before launching.
By completing just a few quick searches, you can end up with a vivid picture of the market opportunity for your idea, which will help to justify or trash your proposed product.
Here are a few ecommerce and retail industry publications to check out:
In the next chapter, you’ll learn how to categorize your competitors before you conduct a complete competitive analysis.
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