Big corporate companies hire high very expensive market research companies. You will have to do it for yourself. Here are some approaches that are cost-effective:

1. Chat with people individually

Make sure they’re not family and friends who are your biggest cheerleaders. You want to talk to people who would be your potential customers. And they must feel comfortable giving you honest feedback.

2. Hold focus groups

You can get a big chunk of information from multiple people in just an hour or two if you host a focus group.

3. Use social media to crowdsource your research

Create a Facebook group and includes surveys and information that people can comment on.

4. Do online research

Research similar or competing products, read online reviews and see where you find missing gaps that you can fill.

5. Run online surveys

Asking a lot of people the same questions can generate really dependable data.

6. Visit your local and provincial tourism offices

They can be a very rich source of information. Visit them in person, online or telephonically.

7. Check out your competition

Look at their websites. Check out their promotions. Conduct your own “mystery shopper” surveys. Park opposite their business and observe how many customers enter. How long do they stay? How many exit with purchases? Go in and browse the business. Check out their product/service. Check their pricing structure. Check out their customer service.

8. Do some testers

Host a very small event with some snacks and drinks and invite potential customers to test your product/service.

9. Talk to business owners on the opposite side of South Africa

If you are in Cape Town, contact someone with a similar business in Polokwane. The distance is far enough that the risk of competition is very low. Tell them what you’re doing and ask if you can talk about the industry.

 

Your target customers are the people most likely to buy your product/service. Your business will only be profitable if you have a good base of customers who want and need your product/service.

It’s important to note, you aren’t stopping others outside your target market from buying from you. Instead, you are choosing to focus most of your efforts on a group that represents your “ideal customer”.

Once you understand your target customers, you can ensure that your product/service is tailored to their specific needs and wants. Then you’ll have a satisfied pool of customers who will likely come back for more and promote you through word-of-mouth.

Unfortunately, many new businesses make three fundamental mistakes that can have crushing consequences. They think –

1. EVERYONE is a potential customer

Not so. Let’s say that you’re planning to open a restaurant and you think everyone is a potential customer and thus you plan on “pleasing everybody”. However –

• Some customers are 30 years old and older. They are wealthy, much more concerned with healthy eating than cheap eating, they appreciate good food and wine, and they like a quiet atmosphere.
• Some customers are 15 to 30 years old. They have limited budgets, and like a place with low prices, fast food and loud music.
• You can immediately see that if you try to target everyone, you’ll end up pleasing no one. Your food, atmosphere, music and prices must target one of the specific groups.

2. Everyone NEEDS my product/service, therefore they’ll buy it

Even if your product/service CAN help just about everyone on the planet, not everyone is going to buy it. Let’s say you are passionate about teaching Pilates and are opening a home-based Pilates gym. You spend a lot of time and money targeting people who don’t exercise. After all, do committed people who don’t exercise need to be doing Pilates? No question. Do they want to be doing Pilates? Probably not or they wouldn’t avoid exercising.

3. Everyone WANTS my product/service, therefore they’ll buy it

Certainly, everyone might want what you’re selling, but not everyone will be able to afford it. And indeed, your price may exclude a large number of people. So, if you target a customer base that desperately wants what you’re selling but can’t afford it, you’re not going to be in business very long.
 

It’s vital to understand that not all customers have the same needs or behaviour towards products. Demographics is the data about your target customers, such as the age, gender, employment, education, income, etc. Here are some examples of why demographics are important:

• A married woman with kids will need different marketing messaging than a senior male with no family
• Men and women generally have different likes, dislikes, needs, and thought processes. Their buying patterns and response to marketing are generally different
• Someone living in a rural area will respond to messaging differently to someone living in a big city
• Millennials and retirees think and act differently and will respond to different marketing messages
• Single individuals tend to prioritise themselves, while newly married couples are likely prioritising each other and their homes. Couples with several children have different needs than those who just had their first child
• Individual cultures have different interests, preferences, attitudes, and beliefs which impacts their response to marketing

Defining your target customers’ demographics will help you understand exactly who your customers are and what they want and need from you.

One of the most overlooked and intentionally ignored parts of a new business is the analysing the competition. Everyone has competition, it’s a fundamental reality of being in business. And ignoring them, or underestimating them, is the worst mistake you can make. By carefully researching your competitors you can evaluate what they are doing right and what they are doing wrong – and determine exactly what you need to do for your business to leave them in your dust!

There are three types of competitors:

1. Direct competition

These are the businesses who offer the same product/service as you and compete in the same market. They are your biggest threat.

2. Indirect competition

These are the businesses who offer a different product/service but compete in the same market to satisfy similar customer needs. Identifying how you can leave your direct competitors in the dust has the knock-on effect of making your product/service more attractive to consumers who may otherwise select to spend their money with your indirect competition.

3. Stealth competition

These are competitors who serve the same customers but in different and often unexpected ways. Their product/service usually serves as alternatives to yours. Let’s say that you’re starting a bakery. A stealth competitor can be grocery aisles, where customers can buy bake-it-yourself mixes. The knock-on effect mentioned above can also help towards directing sales your way.

In Step 9 you identified the features and benefits of your product/service and determined what your USP is. Use that information in your market research. The results of your market research will reveal to you some critical answers as well as highlight what you need to change.

There will likely be both big and small changes. Don’t be tempted to ignore the small details, you never know what will turn a customer off.

In business it all boils down to quality – the quality of your product/service and the quality of your customer experiences (which pretty much involves every aspect of your business). Therefore, quality control is a key component of a successful, well-run business. Defining your quality control helps to ensure your small business delivers a consistent product/service and customer experience. You simply need to:

• Set your quality standards 
• Figure out how you will ensure those standards are met

You want to ensure quality in every aspect of your business but take the most important measures – those that have the biggest impact on your profits and your customer experience are your first priority. This will ensure satisfied customers and also keep you and your team from becoming overwhelmed. What are your quality standards? And how will you ensure that they are adhered to at all times?