Understanding your customers’ whereabouts and who else competes for their attention is critical for business success. Conducting your own market research, consulting existing sources, and looking into competitive analysis are equally important steps in identifying opportunities, carving out a market niche, and making advertising decisions.
Market research boils down to understanding your customers’ needs, resources, and preferences. For instance, if you’re selling golf carts to local golfers and families in a “golf cart community,” targeting areas dominated by apartments and lower-income housing wouldn’t be wise. Diving into demographic data such as age, income, interests, and location can gain invaluable insights into your potential customer base’s preferences and behaviors. Sales reps should have access to this and customize it for you, providing a clear picture of your target market.
Understanding where your customers are located and how to reach them effectively is crucial for making sound marketing decisions. Consider conducting your own research, such as using Survey Monkey and questionnaires, to understand your customers’ thoughts and pain points.
This is only half the battle, though. Conducting a competitive analysis provides insights into the strategies and positioning of your competitors. This exercise helps identify opportunities to establish a unique selling proposition (USP) and carve out a distinct market position. Identifying competitors by product line, market segment, and geographical reach is essential. Determine their market share, strengths, weaknesses, and what sets them apart. Warby Parker eyewear differentiated itself by adopting a direct-to-consumer approach online and in smaller stores, distinguishing itself from giants like Lens Crafters.
Simultaneously, it’s crucial to judge how easy (e.g., restaurants) or complex (e.g., new car dealerships) it is for additional competitors to emerge. Some industries face significant hurdles, such as government regulations (e.g., broadcast radio), while others benefit from tremendous brand loyalty (e.g., churches), which acts as a barrier to entry. Additionally, consider indirect or secondary competitors.
Does Walmart sell your product? Could they? Analyzing marketing and advertising spending levels for your competitors is also insightful. Where do they advertise, and how much do they invest? If competitors allocate no budget to print advertising and you’re questioning its effectiveness, it might be time to reallocate budget. Keep that media sales rep on speed dial. It may be time to re-do the advertising budget.
Utilizing market research and competitive analysis are invaluable tools to point your business in the right direction. By understanding your customers and staying ahead, you’ll seize opportunity and keep business in growth mode based on market intelligence.
Jeff Caves is a sales columnist for BSM working in radio and digital sales for Cumulus Media in Dallas, Texas and Boise, Idaho. He is credited with helping launch, build, and develop Sports Radio The Ticket in Boise, into the market’s top sports radio station. During his 26 year stay at KTIK, Caves hosted drive time, programmed the station, and excelled as a top seller. You can reach him by email at jeffcaves54@gmail.com or find him on LinkedIn.
