Online Market Research Scorecard
Discover a Market's Profit Potential
Part 3 of Online Market Research
By Persuasionworks Team
Market research is the foundation of all areas of marketing. It is absolutely vital before jumping into any market.
Conducting market research removes the guesswork from how to enter a market successfully. You get objective, scientific data so you can make decisions based on facts, not hunches and feelings.
If you don’t do market research, you can spend a huge amount of time and money getting into the wrong market, or creating a product that no one wants.
Research helps you minimize the risks of this happening, and maximize the probability of success.
Market research can tell you:
- Which markets have the best potential – The markets that are most likely to be successful are those with money and buyers in them. This minimizes your risk of spending a lot of money and time going into a market, only to find it’s not a good one.
- What people in the market want – In order to persuade prospects to buy, you first have to know them. Market research is basically a process of asking prospects what they want, so you can give it to them.
You can discover the most-desired product features, and the emotional benefits that drive prospects to buy. This gives you a strategy to create products that you already know people want, and messages that will persuade them to buy.
Persuasionworks has created a highly effective process to do market research online. It’s made up of two parts:
- Identify the best markets – Assess the possible markets you could enter and assign a score to each market according to how many success criteria it has.
- Survey your chosen market to get in-depth insights – Conduct an online survey to dig deep into what the market wants and how to give it to them. This is the best way to get specific, detailed market insight. It provides a blueprint for your product creation and marketing messages.
You should have a medium-to-high level of personal interest in your market. Personal interest is crucial to sustain your passion to grow and improve your business. If you don’t have personal interest, you will quickly find that running this market becomes a boring chore.
It’s a plus if you have experience in a market. It’s not a deal-breaker if you don’t but you’ll need a high level of interest so you gain an in-depth understanding of the market.
Market Worth Indicators
Determining whether there is money in a market is absolutely critical before you jump in.
Just looking at traffic numbers won’t tell you if there are real sales happening.
What you need to check is whether there are a significant number of merchants – this tells you that there are buyers out there.
Another indicator of money in a market is the cost of traffic. Markets with a high average cost per click (CPC) on Google AdWords almost always have more money in them than markets with a low CPC - because advertisers are making more money and can afford to pay more.
Don’t be afraid of competition, though.
It’s virtually always better to go into a proven market with money and competitors and get a slice of the pie than go into a market with nocompetition – this usually means the market also has very few buyers in it!
Market research will help you define a strong unique selling proposition to set you apart from competitors.
Here are some indicators of whether there's money in your market ...
AdWords Ads for Major Keywords
There should be at least 5-10 AdWords ads running on Google for the market’s major keywords.
Use the Google Keyword Tool to find the keywords, then simply enter them into the search box at Google.com and check the number of ads.
Ads may appear above the free search results and also on the right-hand side of the page. If there are still ads on the second and third pages of results, the market is quite competitive and probably has a significant amount of money in it.
Okay, there are ads running in your market, but are they making money? It’s quite possible that there are amateurs in the market and they are distorting the Adwords statistics.
To find out, you need to look at persistence – how long an ad runs before being removed. In some markets the churn rate is very high and the advertisers who aren’t making money drop out.
You can keep track of ad persistence yourself by simply noting down which ads ran on the first page of results for each of your major market keywords.
Do this every day for at least two weeks (preferably three-four weeks) and see which ads are left at the end. If there are very few ads left that were there at the beginning, the market may be difficult to make money in.
Check out spyfu.com – it will help you do this task relatively easily. I am not affiliate of this business – though I should be! It’s a very useful site.
PayPal Shops and Yahoo! Stores
Take a look at whether there are any PayPal Shops
(https://www.paypal.com/cgi-bin/webscr?cmd=_shop-ext) or Yahoo! Stores (http://shopping.yahoo.com) serving your market. This is a good indicator that there are real buyers in the market.
Are There Offline Books in the Market?
You can research this on Amazon.com. If there are books, this is another good indicator that the market has buyers in it.
Are There Offline Magazines in the Market?
You can research this on magazines.com. I am not an affiliate of this site.
An offline magazine is an excellent indicator of money in the market, because it’s largely supported by advertising.
A magazine also usually indicates an enthusiastic market that you can build a long-term relationship with to create high customer lifetime value.
Is There Paid Online Content in the Market?
You can research this on Google – content may include paid eBooks, membership sites, and newsletters.
Enthusiasm in the Market
The best kind of market is one exhibiting strong passion and enthusiasm. Customers in these markets will buy more often and spend more per sale.
Because of their interest in the market, you can also build strong relationships with them and create high customer lifetime value through backend sales.
Hobby and business development markets are examples of topics that tend to have strong enthusiast and passion.
If the market has an offline magazine, it usually indicates a highly enthusiastic market, especially if it’s an information market.
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