Putting Your Finger on The Market Pulse
Twenty years ago, I had a boss that used to say: "There's only two mistakes you can make as a marketer. The first mistake is not to research your market... the second is not to believe the results."
Yet, in the many years since he offered me that guidance, I have found that very few marketers actually check the pulse of their markets through research. Instead, they believe (erroneously) that "they know the market."
This is rarely, if ever, true. No matter how much experience you think you have in your marketplace, you are not representative of your market! You are therefore prone to miss important dynamics of the marketplace.
How do you check the market's pulse? There are two ways to do this. The first, and simplest, is to arrange interviews with existing customers and existing prospects. I generally try to do at least ten of each. When I'm done with that, then I dig through files and get the names of prospects who decided against my product or service -- sales that were lost. I make a point of talking with them, too!
The second way, the more structured way, is to construct a formal survey and administer it to an appropriate sample of prospective consumers. Many marketers balk at this because they know enough about statistics to be afraid of the math and to avoid the slippery slopes of sampling. But surveys aren't has difficult as they might seem and it doesn't take a particularly large sample size to get useful information.
Most often, what I do is a combination of the two. First, I will talk to customers, prospects and lost sales with a goal of identifying what factors matter in their decision making. Then, if the anticipated product marketing investment warrants, I will apply those factors in a formal survey to determine how meaningful those factors are, and how my competitors fare against those factors.
In a market of 50,000 potential prospects, I might look to survey as few as 25 consumers -- perhaps 5 from 5 different regions of the county. While a sample of 25 seems small, it yields a surprisingly good perspective offering a 95% confidence level (certainty) and a confidence interval of no greater than ±20%. This means that, statistically, 95% of the 50,000 potential prospects would pick an answer within the confidence interval of ±20%.
For example, if the survey reveals that 50% of the participants thought price was the significant decision factor for a product, the sample is big enough to ensure that of the entire 50,000 prospects, at least 30% and as many as 70% would agree. That might seem like a broad spread to some, but when compared to making a shoot-from-the-hip guess, it provides sniper-level accuracy. If it's too broad however, merely increase the sample size. See the tools at http://www.surveysystem.com/sscalc.htm to determine what sample will give you the accuracy and precision you seek.
Administering a survey is also no longer as involved or cumbersome as it once was. Previously it was a major logistical effort involving printing, mailing, and hand tallying. But new, inexpensive, on-line tools like Survey Monkey (www.surveymonkey.com) and Snap Surveys (www.snapsurveys.com) make it quite easy to create and administer high-quality surveys.
Moreover, if you use direct marketing methods like telemarketing, web-based ordering, or direct mail, it's often quite easy to use those activities to get better market data. With telemarketing, either inbound or outbound, it's often just a matter of adding one or two questions at the end of each call. With web-based selling, a pop-up web survey can intercept normal user dialogue and ask for participation. Lastly, with direct mail, split testing can be a very effective means of surveying. For example, if I'm researching price sensitivity, I might send 5,000 mail pieces with a price of $85 and another 5,000 with a price of $100 and compare the results.
With today's technology, there is no excuse to ignore the wisdom offered by my old boss. Surveying your market, formally or informally, is easier than ever. And if you're not putting your finger on the pulse of your market, then you're putting every dollar your company spends on its products and communications at risk.
Click KLynn Business Consultants to link to the KLynn consulting site.
