When starting an online business, it’s essential to conduct market research prior to a website’s launch. The Web offers many opportunities for conducting inexpensive or free online market research, which you can do independently. Online market research makes competitive analysis and marketing plan development a cost-effective reality for online business owners. Market research is important for several reasons:
1. To determine an actual need for the products, services, or information you plan to provide through your online business.
2. To determine whether the market is already saturated with too much competition in the niche.
3. To determine the strengths and weaknesses of your competitors as compared to your own online business.
4. To gain a better understanding of your target market, their needs, and how to effectively market to them.
5. To discover potential problems or flaws with your website, products, or services of prior to a public release.
Here are a selection of online market research tools and tactics:
1. Search Engines – Search engines (like Google, Yahoo!, and MSN’s Live) are free tools that can help a great deal with online market research efforts. Their first use in online market research is in helping to identify online competitors. Simply search for variations of your business name, niche, industry, or names of products and services to see who is directly competing with your online business. Also conduct searches to help with marketing efforts, such as searching for incoming links to a competitor’s website, so you can target the same, or similar, sites in a link-building campaign.
2. Keyword Suggestion Tools – Keyword suggestion tools, such as those provided by Overture and WordTracker, are a simple online market research tool for gauging demand for a niche, product, or service with an online audience, by evaluating a keyword phrase’s search frequency.
3. Online Market Research Reports – It’s possible to find a great deal of relevant market research already conducted in online market research reports. These range from free market research reports on your location, market demographics of your visitors, or a specific industry / niche (often from government or educational research projects), to paid market research reports from private companies and researchers (sometimes costing thousands of dollars per report). For basic demographic market research online, check your government’s housing authority or industry / labor websites, or their equivalents.
4. Survey Sites / Tools – Whether using a free survey site or an integrated survey tool directly on your website, surveys are an important feedback-gathering tool in online market research. Surveys are an excellent way to discover your target market’s thoughts regarding customer service, new products or services, site design changes, policy changes, and more. Surveys are also an effective means of gathering demographical information on your target market.
5. BETA Testing / Focus Groups – Focus groups aren’t just for offline market research. Before launching a website or online business (or even a specific product or service online) publicly, recruit beta testers to test your products or site to report flaws or bugs, or hire or recruit a more general online focus group to provide feedback on anything from the Web design to site usability. Test and focus groups are a perfect example of how traditional market research methods can be tailored to an online market research model.