Niche market research the cheap, fast and easy way
If you ever have to learn about an online market, there’s a fast and easy way to do it that doesn’t require fancy market research firms or lots of money. Usually the old saying goes: “Fast, easy, cheap: Pick two.” In this case however, you can can have your cake and eat it too. There’s one major caveat, though. This is an online trick only. If your demographic is, for instance, residents at assisted living facilities, then you’re probably out of luck. With that in mind, here we go…
Overview
The big idea here is that you’ve got an idea about a niche product that can be served online and you need to know what kind of market exists. You don’t want to hire a firm or wade through analyst reports or trust your gut (or someone else’s). You just want to find out whether there’s a viable market for whatever it is you’ve got to sell. The kind of market research I’m describing here will give you a sense of how interested the market is in your product. And you’ll even get to ask questions of potential customers before actually marketing to them. It’s not that tough to do, and it’ll probably cost you less than US$100 and maybe even under US$50.
Step one
Determine your keywords. Keywords are simply those words or phrases that people may be using to find products like yours. Use this site to do some research, or just sign up for an AdWords account and do the research there. Your keywords ought to relate to the market segment that you’re researching. Thus, if you’re selling to people interested in buying widgets, you’d use ‘widgets’ as a keyword. Play around with keywords until you’ve dug up all the ones relevant to your endeavor. Don’t mess around with keywords that have relatively low search volumes. You want to stick with the keywords that people are actually using.
Step two
Set up a survey. SurveyMonkey.com is my tool of choice. There are others out there, but this one is cheap, easy and has lots of analysis options. There’s a free version that allows for 100 responses for surveys up to 10 questions in length, or you can pay $20 and get a month’s worth of all the surveys you can eat. $20 is cheap, just pay the money. SurveyMonkey has all the question types you can ever want, so choose wisely, ask relevant questions, and don’t flog your Kindly Respondents with excessive or dumb questions. You can set up any field to be required, but understand that your results may suffer if people don’t want to deal with required fields. Also, if you’re asking for email, phone numbers or addresses, be sure to be clear about your privacy policy and why you’re collecting that data. Usually just a zip code will suffice.
The pay version of SurveyMonkey will allow you to set up a ‘Thank You’ page of your choosing (one that resides on your server, for instance). With the free version you can just create a final page within your survey that says, “Thanks!”. Either way, this is an essential step. Don’t forget to leave your potential customers with favorable impression.
Step three
Create ads. I’ve never used the Yahoo! ad tool, so aside from pointing to Overture, I can’t really help there. Maybe a Kindly Reader can enlighten us all. Google’s AdWords program will allow you to select your keywords and it’ll estimate both your impressions and clicks, based on the number of searches for those keywords. Set up your ads carefully–Google will alert you if you’ve offended them in some way with your ad. One notable point is that you can select a display URL and a destination URL. Be sure your display URL actually goes somewhere, otherwise they’ll stop running your ad. If you already have a domain, you can set that as the display URL and then the destination URL as your SurveyMonkey survey.
Step four
Let ‘er rip. Once you’ve got both your ads and survey built, turn it on for a week or so and start collecting responses. The actual time you leave your survey up will vary according to your requirements. A week is a good rule of thumb for small-ish projects. This is where the cost comes into play. The longer you allow your ads to run, the more expense you incur. This is compounded by the actual cost of your keywords. Keywords under US$0.10 are cheap and you can get a lot of mileage out of them. If your keywords are more expensive, you’ll pay more. I know it’s blindingly obvious, but it needs to be explicit.
Step five
Evaluate your results. The pay version of SurveyMonkey will export your data. If you’ve got more than a couple dozen responses (and if you’ve left your survey up for a week, you should) then it’s worth the ability to export the data. The free version will allow you to view your responses one at a time and you can copy/paste those responses into Excel, but surely your time is worth more than the $20 it costs to upgrade. Remember, “fast, easy, cheap.” Copy/paste only satisfies the “cheap” criteria (though it’s easy to copy/paste, it’s not always so easy to un-html-ize data pasted from the web, but maybe you’re smarter than me, in which case you get both easy and cheap.)
Simple, eh? I’ve done all this and I’ve got to say, it’s actually ridiculously easy to conduct niche research this way. And if you’re brave and your product isn’t too obscure or internet-ish, you might even be able to project your findings out into the broader offline population. I wouldn’t, but good luck to you. If you’ve got some experience with this kind of market research and have some additional tips, drop ‘em in the comments.
HI, Brendon–long time listener, first time caller here. I enjoy reading your blog, but feel compelled to chime in on this one before damage is done :) Research shows that only around a quarter of the online population has ever clicked on an ad, and about half of that number have done so recently (in the last month or so). So, to start with, you are limiting your universe to people who will click on ads–you might argue that these are exactly the people you want to reach, but it is a significant bias nonetheless.
The larger bias, however, is the fact that the survey is entirely self-selected–in other words, you are only hearing from the people who are willing to click on a banner ad and willing to take a survey online. Self-selected research is not by definition valueless, but it’s also kinda like, say, Pizza Hut only conducting research via the comment cards left on the tables. Chances are, you have filled one of these out only if 1) you had a lousy meal, 2) you had the best meal of your life, or 3) you are some combination of crazy/terminally bored.
So, in other words, you start with a fraction of reality–the folks who will click on ads (which is not the same as the folks who read/absorb ads), then take an odd fraction of that universe in the people who will sit down and take an uncompensated survey. So, definitely not representative or remotely projectable to the online populace under any circumstance. You might be encouraged to see that 500 people take your survey over a weekend and believe you have a smash hit–but it is possible that those 500 people represent your total potential audience–you have no way of knowing or even guessing if this is directionally accurate. I am not saying this approach is without value–I am suggesting that you could get fooled or pulled in dangerous directions unless you know how far from reality your respondents are.
Now, there is a lot of research done this way, and it isn’t without merit–you could argue that the folks who do respond to this sort of thing are exactly the people likely to be your best customers. It is true that if I click on an ad for widgets, and then take a survey on widgets, I probably loves me some widgets-so I am probably a prime candidate to sign up for widgtr.com or whatever your product is. But know that thousands of businesses have failed because they were unable to cross the chasm between the earliest adopters and even the early mainstream consumer on the consumer adoption curve. The folks who respond to this kind of research may lead you down a path that satisfies them completely, but fails beyond that. I know you said a “niche market,” but even in niche markets there is a full representation of the consumer adoption curve, with a representative bell-shape running from the earliest adopter to the folks who wait until last. Even if your product is fake plastic vomit, you cannot assume that the people who respond to this kind of research are remotely representative of all the people who might buy your yack.
Let me give this example–say Apple decided to follow this method in the initial tests of the iPod. What they would have ended up with, I would argue, would have been miles away from the iPod they launched with, which had fewer features and was more expensive than anything else on the market at the time. The “early adopter” iPod would have probably been another Rio, only with a built-in bottle opener.
So, am I suggesting this is worthless, or a bad idea? No—especially if you can get a quick head start by satisfying an early base, getting some seed capital, and then using that seed capital to grow your business-by doing some more research. By all means, do this–but know that there is no axiom in my business that states “even bad research is better than no research at all!” even though I hear it from time to time. Just treat it as a first step in the game–but be prepared to revisit it as soon as you can afford to. The Internet is littered with the corpses of various Flooz’s and Beenz’s who were probably fooled into thinking they had actual products by just this sort of research. But before you go and hire Whoopee to be your spokesperson, be sure you throw it out and go do some more.
Keep up the good work,
Tom Webster
Vice President
Edison Media Research
Thanks, Tom, those are great comments! Yeah, this approach is super limited in it’s scope and utility. This approach isn’t suited for all products, but like you mention, it’s a quick and dirty way to get a head start in some situations. Your warnings and red flags are spot on, thanks for taking the time to put them here…
For those readers interested to learn more about Step Three above (creating ads) you can learn more about this on my blog http://www.AdWordsAnswers.com where I answer any questions about Google AdWords sponsored links advertising program, and even provide a free trial service so you can see in advance how it could work for you. Thanks for reading!