You thought up the perfect product. The design turned out better than you had imagined in your head. Your friends and family sport it whenever you’re around. There’s just one problem: No one’s buying.
The solution to this problem may be hidden way back before production in the fine print. I’ll give you a clue. It has to do with those significant people who are at this moment the ones not buying. Yeah, the buyers, consumers, whatever you want to call them.
Do you know if they were actually in need of the product you spent the last three years and way too much of your 401K developing?
Many small businesses overlook market research in the throws of developing a new product or service. It’s easy to get carried away with the products you want to make rather than the products the market wants to buy.
We’re all familiar with one classic violation of this rule. I’ll set the scene for you.
I tuck my arms in. It doesn’t really help. My head is situated perfectly in the center of the headrest for the first 23 minutes of the ride… that is until the guy next to me starts to dive bomb from his headrest onto my shoulder.
I would wake him, but I don’t speak Korean.
Poor guy, he was out like a light before the seatbelt sign went red. I calmly try to readjust my positioning while ignoring the chorus of snores he’s now emitting.
To my left sits a tiny woman. She’s now giving me worried looks as if she doesn’t want to get caught up in this leaning tower of human, either.
I think about calling over an attendant and offering cash for an empty first class seat, but we both know that’s not going to happen.
No one ever asks for the middle seat on an airplane. We can squirm all we want and push the panic button but it won’t make the airlines reconsider this undesirable product.
We see this in the business world, all the time. Hugh MacLeod, one of my favorite entrepreneurs, calls these businesses the ‘Middle Seat Guys.’
Just like airlines that offer passengers a seating option that no one wants, MacLeod says there are plenty of products out there that have no appeal to the market they are intended for.
The ideal situation for a small business is to find a niche to operate within their market segment.
How does that work exactly?
- Look at the market and the competition and figure out what the potential customers want.
- Discern trends in the market that aren’t being addressed.
- Calculate changes in the market environment.
- Define areas of business your competition or market leaders fail to adequately serve.
Yeah, this is hard. But, you can make a place for your company if you can find a niche market where these two principles are met: There is actual demand AND There aren’t many other competitors in the market already.
In you’ve checked both of those boxes, you’re on your way. You can avoid most other market-related pitfalls by answering the following questions based on the biggest part of your market.
- If buyers and sellers could do business any way they wanted, what would that look like? If you asked them what delivery system, what buying channel, what compensation method, etc. they preferred, it might look different.
- Are buyers really satisfied with the current product offerings? Many times buyers think they are satisfied because they get the best that is available. If you offered a slightly different product that saved them money, was packaged in a way to be more efficient, had a different delivery method altogether, might your product move up the priority list?Yes, this means you’re going to have to actually talk to your customer, maybe even sit down and meet with them and their team. This isn’t a social sharing activity.
- What trends in your industry will affect how business is conducted in the future? Can you get out ahead of that trend and start doing business the new way today? It might require investment in equipment or technology, but if you can better satisfy the customer, you’ll win their business and probably their loyalty.
- How will new laws, governmental or environmental regulations affect how business is done in the future? Again, can you get out ahead of the coming regulatory changes? Small businesses have the ability to move quickly to respond to changes in the industry. While big businesses can see the road ahead, they’re usually not very good at guiding their huge ship on a tight course to manage change in a timely manner.
Is there any way for us to operate in a small portion of the market that our competitors think is too small or too much trouble?
If you can find that niche market, you no longer have to compete on price. You’ll have a differentiator that’s worth the price.
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Originally published on: Apr 14, 2015