04 July 2010 ~ 10 Comments

Starting Own Business Online – Know Your Market

Starting Own Business - Market ResearchWhen starting your own business online you possibly feel tempted to dive in the operational aspect of your business. You are excited about the website or blog building, how to create a good looking site, and you may spend hours or days testing and tweaking graphics and sales copy in order to make your site as nice as possible.

Then you jump to the task of driving traffic to your newly built website. You work hard applying all the techniques you have been studying or the strategies you bought from the experts and after some weeks or a couple of month your website rank in the first page of search engines and you get a few hundreds visitors each day.

However, to your surprise there are few or zero sales. You even notice that you have an acceptable bounce rate and that your website visitors spend some time in the website. Why they do not buy your product or service, or the affiliate products you positioned strategically in your site?

There is one of two possible answers: your visitors are not buyers or your product is not saleable.

You can prevent all this work for nothing if you do a little market research prior the website building. You already know that all the courses and e-books you can get regarding doing business online talk about niche research, how to identify a niche with hungry buyers.

What you also must have noticed is that the majority of those courses and e-books usually present dog training, weight loss and playing golf as examples, repeating, course after course, e-book after e-book, the same old tired strategies and examples.

Market research is not difficult and it does not take too much time or effort. In fact, you can follow a simple set of three rules to perform a basic market research to realize if you have a market or not.

Rule #1: Know your market dimension. That is the first test you must do to determine if you have a market. You can easily see how many people search for the keywords related to your product using the free keyword tool provided by Google. Test not only your main keyword but also some related keywords. For every search, please uncheck the “use synonyms” option. You want to know if people are searching for your keywords and not for other similar keywords that can relate to a complete different type of market. A monthly search volume greater then 3,000 gives you a good indication that it may be a profitable market.

Rule #2: Know your market demographics. You want to assess the age, genre, education level, and any other possible information about your potential customers. In addition, you want to know if people that search for your keywords are buyers or they just use to browse for information. To get a quick information about demographics find a website that sells a product similar to yours and use Quantcast to analyze the demographics for that site. You may repeat for the first 10 sites you find in Google when searching for your keyword. To get a feeling about if people are spending money in your product, or similar, when searching for the keyword in the Search Engines see how many ads are displayed. Go to Adwords program from Google and see how much may cost you to step up a PPC campaign using your keywords. To find at least one page of ads and a PPC value greater then one dollar is a good sign that there is people spending money in your market.

Rule #3: Know your competition. How many competitors do you have? What are they selling? How are they selling? Are they long established websites or very new? Do they offer free stuff to get their customers attention and to build a list of customers? Do they just try to hard sell? Do they have affiliate programs? In order to get a good overview of your competitors you may use some SEO analyzers in the market. A lot of them are free and they provide you with valuable information about your competition. The best ones are paid and if you see that your marketing is too much competitive it may justify buying one of those SEO analyzers to get as much detail as possible.

These are simple rules but unfortunately, a great number of entrepreneurs do not follow them. They try to build a business selling products that they believe people will buy, or that they would like people to buy.

When starting your own business online you must reduce as much as possible be driven by guessing and wishing. You want to be as certain as possible that there is a market for you, with people that buy your product, and that you can overcome your competition. If you jump online without knowing your market, you may have a great luck and find the gold in your first dig, but chances are you will loose time and money to achieve poor results.

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10 Responses to “Starting Own Business Online – Know Your Market”

  1. Anna Haller 6 July 2010 at 2:00 am Permalink

    Some good rules you outlined here Jorge. It’s definitely key to know your market and what they are hungry for and that there is a demand out there for the product you are going to promote. A lot of time can be wasted if you don’t do so.

    Anna
    Anna Haller´s last blog post ..Do you wANT to succeed

    • Jorge 6 July 2010 at 2:07 pm Permalink

      Hi Anna

      Thanks for your comment, your visit is always very appreciated.
      I’ve seen in some forums people complaining they get traffic but don’t make sales. Sometimes is a conversion problem, the site is not done properly. But I’ve seen so many people trying to sell what nobody wants or what you can get from free so easily… Obviously these people didn’t know their market, so they can’t have success, although they have been working a lot for traffic.
      Cheers
      Jorge

  2. giofranco 7 July 2010 at 10:22 pm Permalink

    Hi Jorge,

    Your post has made it so clear and well defined the three basic rules
    before we start our business online. Well done.

    Giofranco
    giofranco´s last blog post ..How To Choose A Niche To Make Money Blogging

    • Jorge 8 July 2010 at 10:59 am Permalink

      Hi Giofranco

      Thanks for your comment, I hope people can take advantage of my posts. Following will be articles regarding the remaining five gold rules.

      Cheers

      Jorge

  3. Sally Neill 9 July 2010 at 7:49 am Permalink

    Hey Jorge

    Great post.

    Wayyyyyyyyyyyyyyy too many people jump off the deep end and enter a market without checking to see if it is a profitable one first, then they wonder why they fail.

    It’s very important to test the market before you create any product, will save you a whole lot of time.

    Sally 🙂
    Sally Neill´s last blog post ..Alex Jeffreys Student Blog Competition Result

    • Jorge 9 July 2010 at 9:21 am Permalink

      Hi Sally

      Thanks for your comments, it’s always a pleasure to have you here reading my posts.
      I think that all of us, one way or another, already suffered from starting a business without knowing the market.
      But that is what this blog is about: to give good advice, as far as my knowledge go, usually on top of experiences and mistakes I did myself.
      Congratulations for the traffic competition prize, you really deserve it.

      Cheers
      Jorge

  4. Peter Beckenham 14 July 2010 at 4:06 pm Permalink

    Hi Jorge,
    What a really great post – full of common sense and practical advice.
    By the way thanks for the tip about Quantcast to get to know our demographics.

    It is all too easy to think we know what a market wants and as soon as we go down that path without fully researching the reality, we are doomed to fail!

    Well done Jorge –

    • Jorge 14 July 2010 at 4:15 pm Permalink

      Hi Peter
      Thank you for your visit and your comment.
      Sometimes common sense is just what is missing to reach success. We are so full of ideas and information about how to do thousands of different things that we forget what is just common sense. In this case, to check if we have a market for the products.
      And sometimes when you find a market you just offer the wrong product. Check my next post on this 🙂

      Cheers

      Jorge

  5. Louis 20 July 2010 at 12:33 pm Permalink

    Hi Jorge,

    Great post on market research. One thing I will add is Compete.com and Quancast.com give good information about gender interests etc …

    The other aspect of a profitable market is to check if the ads displayed are showing up regularly. If they do, it means that the advertiser is likely making money in that market, and well worth looking into.

    Louis
    Louis´s last blog post ..Article Marketing Automation Review – The Recommended Backlinking Tool For Internet Traffic Building From Search Engines

    • Jorge 20 July 2010 at 2:45 pm Permalink

      Hi Louis

      Welcome back and thanks a lot for your contribution. That’s a really valuable comment you made here, and the tip about studying the ads that are presented during your searches is gold.

      Thanks a lot, with this kind of contributions we’re really creating value to all.

      Cheers

      Jorge


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