The Importance of Market Research
Your market research is one of the most crucial steps in developing your business plan and marketing strategy.
If you’ve been following some of the stories on Fast Company or Flying Solo (and as small business we know you are), then you would have come across an article on Justin Winter and his company, Diamond Candles.
The idea behind Diamond Candles seems simple – soy candles with a diamond ring hidden inside. What is remarkable about the business is that Diamond Candles made $1m in sales in its first year, and by the time the business was 2 years old they were making $1m a month.
Not every business idea is going to generate those kinds of returns, in fact, in someone else’s hands Diamond Candles could have been a complete failure. The important thing to take from their success is that they put time and effort into their market research and found new ways to build a customer base.
Finding the Marketing Hook
After coming up with the idea, Justin and co-founder David bought a cheap stove on Craigslist, watched YouTube videos to learn how to make candles, made a small production run and marketed to their friends and family’s networks on Facebook. After the first run was successful they researched their competitors to differentiate their product and used market data and personal experience to research their target customer’s buying habits. They then developed a professional e-commerce store and advertised a Valentine’s Day launch for their product.
They used Wildfire and Mailchimp as a basic marketing system to attract interest and ran a competition (the winner received 2 night’s accommodation in David’s beach house), while building awareness of their product. They sold 12 candles in their first 24 hours and after continuing to use the beach house accommodation as a viral marketing hook, they had a large marketing list to target their product to.
It was only a three month period between idea conception and product launch, but Justin and David used that time for market research and develop clever methods to generate a mailing list and ultimately, a customer base.
MyWork Australia came about from recognising a service gap in the market (affordable web design for small businesses.) Matt used his knowledge of his target demographic to select the right marketing channels and ensure the business was being promoted to the right people.
Think Outside the Box
You may think that your idea has been done before but I can guarantee you there will be one unique element about it. Find out what that is and go for it!
Once you have the idea, start thinking about how you can communicate it. Not every business needs a Facebook page and not every business should advertise in the local paper. Really think about what media your customers are using. This will not only help your marketing plan but you will be able to more accurately develop a start-up budget.
Diamond Candles’ viral marketing was carried out with tools that are free to use. They simply figured out a way to use those tools to their advantage.
Get the idea. Do your market research. Think outside the box.