10 Tips For Defining Your Market

By on October 20, 2014

One of the biggest mistakes that business owners make when starting out is skipping over market research. Many well intentioned entrepreneurs fall in love with their business or idea and in their excitement to get started, simply pass over doing real market research to see if there is a need or desire for the business they’re about to create.

Whether it’s service based or product based, you need to do your research to figure out who your ideal client is and there are many aspects to consider. Don’t skip this important step that will give you a vital snapshot of the feasibility of your client. After all, if you’re going into business, or even if you already are in business, you should be doing it to serve the needs or solve a problem for people. It’s important to consistently check-in with the market and see where you can improve and how you can better serve your clients.

The great thing about taking the time to do your research is that while you’re in business to serve, you’ll end up seeing a direct correlation to sales when what you provide helps people. They’ll spread the word and they’ll come back, so invest the time and effort required to define your market and figure out your client needs now.

Here are ten important tips for how you can get started defining your market.

Define Your Industry

What industry are you getting into? You’re going to need to know the rules, norms, vocabulary and general state of the industry you’re about to get into – so do your homework and figure this out. It’s not good enough to fake it, you’ll want to be able to talk the talk in meetings, with clients and as you network and build relationships with other business. Your clients, vendors and staff will need to have confidence in your ability to lead them in this industry, so take the time to learn all you can.

Here are a few tips on how:

  • What are the top 3 books written about your industry or market? A simple Google or Amazon search will produce the most popular, highest grossing book sales for industry relevant options. Buy the top three and read them.
  • Who are the top 5 leaders in your industry? You can research them at the global or national level, but also be sure to include your local authorities. Even if they’re smaller fish in the overall industry pond, they could have valuable insights. Now that you know the top five, research any articles, press, or interviews that pertain to them and read those. What about any books they’ve written or conferences they’ve attended? What they’re talking about and where they’re going are good indications of what you should know and where you need to be attending to stay on top of the relevant changes in your industry.
  • Set up Google alerts. Sounds silly, but get started now and set up Google alerts for the names of the top five people you discovered in your industry, as well as any major foreseeable competitors and any other keywords that are relevant to your industry to keep yourself informed of the latest goings on. You need to stay at the forefront of what’s happening, so let Google mine the internet to deliver once-a-day results of all the most important news pertaining to your industry.

Define Your Purpose

If you’ve heard the now infamous Simon Sinek TED Talk on “Start With Why,” then you already know the importance of this idea. If you haven’t, watch it and then sit down with a pad of paper and start brainstorming why you’re in business or about to go into business. Make sure you aren’t going off the rails with “how” you do what you do and stay focused purely on why you do what you do. The how will follow; don’t worry about that just yet.

Here are a few tips on how:

  • Ask questions: If it’s just you, ask yourself, or if it’s you and cofounders, ask them to participate to in answering some questions on the why. Start individually and then collectively come together to compare your answers to these questions; what problem will your business solve? How will the lives of your clients be changed, different or better because they’ve interacted with you?

Define The Feeling of Your Business

When you know why do you what you do, your business still needs to answer some more questions. As you know from your own experiences, how you feel during your interaction and continued exposure to a business or brand is why you choose to love them or leave them. Loyal United Airlines customers are walking away from the airline en masse this year after they changed their Mileage Plus Program. Devoted Nordstrom shoppers will continue to return to the upscale retailer because of their excellent service and no-questions-asked return policies for clients. All these continued interactions with a business can define you for good or bad in your client’s eyes, so establish how you want your business to feel for your target market and make sure you stick to ensuring that feeling stays.

Here are a few tips on how:

  • More questions: Brainstorm answers to these questions with others or yourself, then share with the staff and get their feedback; What will a client feel like after walking away from their first interaction with your business? Their second? Their third? Why will a client be coming to you in the first place and how will they know you exist and why they should use you?
  • Write it into a mission: Once you have your individual answers to those questions, come together as a group to vote on and collectively craft how that feeling will be for clients. Then create a mission statement surrounding it; even a code of conduct requirement, and all staff members should sign a commitment to upholding that experience. One person can make or break the experience for a client, so make sure this is collectively decided upon and upheld by your entire business to ensure great customer feelings in your market.

Hire A Pro

Once you’ve done this much of your target market demo, there’s still a little bit more to process before you jump into business, or make changes to your existing business plan. At this point, it may make sense to hire a pro to gather some market research for you and your business. Why? Market research is a very time consuming process and changes are good your time would be better spent hiring this job out and continuing to work on your business plan while an agency is compiling this information for you.

Here are tips on how to get started.

  • Find the right company: Start your search on Greenbook, which publishes a list of the Top 50 Market Research companies annually and you can start looking into which agency is right for your needs.
  • Define your budget: As mentioned already, market research can be very time consuming, so market research will come at a price tag. However, this is money well spent if you are clear about what your business is and who your clients are (which you should be after completing the above tips) and can keep your market research company laser focused on specific results.

Make a Decision

With your personal research work already completed, an agency researched and their results in hand, it’s time for you to make some important decisions about how to proceed with your business idea.

Here are some tips on how to decide what’s next.

  • Start or alter: Now that you know the hard data behind your target market, how is your business in line with the market you originally thought you’d be serving? If you market research agency backed up your assumptions with data that supports your business model, then it’s full steam ahead! However, if the data didn’t quite come back in line with your assumptions, congratulations! Why? You just discovered the incredible importance of market research and why it pays to do the discovery up front instead of trying to stumble and learn as you go. The good news about any perceived bad news from your agencies research is that it gives you the opportunity now to alter your approach. Odds are good there is a market that’s been identified that you can serve, so how can you adjust your business model to better target these individuals? You may have to let go a little of your original idea, but with the data to support you, you can move forward in confidence.
  • Get started: Not much else to say here but its time to put the pedal to the metal and get started! Done is better than perfect so use the research, mission and vision you’ve collectively gathered to get started with implementing your business now.

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Matthew Toren

About Matthew Toren

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right .