How Do I Find My Customers?

While medium to large sized businesses have a line item in their budget for market research, a sole proprietor or small business owner likely will not.  The sole proprietor generally starts a business based upon his or her personal beliefs about their product or service, and who they believe will pay for it.  Unfortunately, this is one of the main reasons that businesses fail.  The bakery cafe owner that opens up in an area of the country where the market is saturated with bakery cafes.   The messenger bag company marketing to students, in a part of the country where the trend is towards backpacks, not messenger bags.

What Can You Do To Avoid Misreading Your Market?

The saying in real estate may be “Location, location, location” but for any business that hopes to be successful, the real catchphrase is “Research, research, research.”  While your company may not be able to afford market research, it just means it’s another thing that you’re responsible for yourself.

Market Research is The Secret Sauce

Starbucks does extensive market research before putting a store into an area.  They research traffic patterns, income of an area, age demographics, and projections of what they expect the area to look like in 5 or 10 years.  This is why once in a while you will see a Starbucks in an area where you didn’t expect it.  But lo and behold, five years later, the neighborhood is gentrifying.  Are they moving there because of Starbucks?  No, they were already moving there, and Starbucks’ market research allowed them to get into the market before anyone else knew it was a market.  That is the secret of Starbucks success – it’s not coffee – it’s knowing their market.

Piggyback on Another Company’s Market Research

This is my absolute favorite marketing tip for small business owners.  Of course you can’t afford to do the level of marketing that Starbucks does, but you don’t need to.  They did it for you.  If your target market is the same or similar to Starbucks target market, then all you need is to see that they will be putting a Starbucks in a location, then that means that location is poised to do well for that market.  If Starbucks customers are affluent, well-educated, white-collar patrons (skewed female) between the ages of 25 and 44, and young, affluent, and tech-savvy,   your high-end electronics store, yarn store or independent bookstore will likely do well in the same neighborhood.

It doesn’t end with Starbucks.  Think about your business and who you expect to buy from you.  Families with school-age children?  If there’s a Toys R Us in your area, you can be they did market research before putting it in, so that’s a good neighborhood for you too.

The exception to this rule is franchises – the independent franchise operator is unlikely to have done market research, and the parent company doesn’t care since the risk is borne by the franchisee.  So make sure to do your homework!

(P.S. Here’s another way to use that Starbucks market research to your benefit. )

MJW LinkedIn photoMegan J. Wilson is a professional ghostblogger, commercial freelance writer and social marketing consultant.  She also blogs at Dirt Totem Productions, where she is an avid cheerleader for social media marketing for independent films.