Category Archives: Market Research
How to Know if a Product or Service Idea will Sell
I have been chuckling to myself over the number of wire-frame and inflatable snowmen on lawns here in CALGARY, ALBERTA, CANADA!! WHY do people buy these things? I bet no market researcher in his or her right mind would have said anyone could actually sell fake snowmen to CANADIANS! But this is a perfect example for the point I have to make today.
We have often been asked to conduct market research in order to answer the question, “Will this product or service actually sell?” There are a few issues with it, because it is not a straight-up market research question. You see, Market Researchers can assess if the product makes sense or has potential to fill a need, but NOT whether it will actually sell. Here are some of the other factors that determine whether a product will sell:
Often with a new product, there is no good name, logo, branding, or packaging yet. Therefore, it is difficult to know whether these will be sufficiently executed to make the product successfully sell. Sometimes it is these very elements that make or break the products sales completely. Getting your ducks in a row (with good marketing) first can make the difference between selling or sinking.
Sales Ability and Persistence
If the product isn’t well pitched in a sales situation, it can fail no matter how good it is. Perhaps it is a politically sensitive sale, for example, a technology replacing a lot of the prospect’s employees. Perhaps the product or service just is too much of a reach for the sales team’s training – such as a furniture sales team trying to sell interior design. Or, it could be lack of persistence — I have had a start-up clients myself who have had wonderful products that they simply could not sell, despite training, nagging and coaxing (proven because we help them land their first few clients, but then they can’t or won’t sell it for themselves after that.) Sometimes it is less about feasibility than determination. A good reminder: if there are competitors doing it, it can sell — the factor then becomes YOU.
Getting a prospect to open up to a researcher is one thing, but if the researcher doesn’t really believe in the product, it can be too easy for the prospect to get a poorer representation than the business owner would have given. This makes it very important to choose the right researcher. You may need to train your researcher on the true value of your idea, and make sure he or she “buys in” before executing the research.
The bottom line is, if you either can’t sell it, or don’ t know if it will sell, a good marketing consultant, especially one with some sense of sales finesse, can really help you look at all the factors, and get your best possible result. Please check out our Market Research page for more information on feasibility research.
How to Build Revenue and Sales Forecasts
Developing a sales or revenue forecast can feel a lot like trying to magically see into a crystal ball – and is one of the most difficult aspects of creating a strategic marketing plan. After all, if you don’t know how much revenue you’re aiming for, how will you know how much to spend on achieving it?
On the surface, we’re talking about unit sales times the price of the sales to get a revenue number. But how many units of each aspect might you sell?
Here are three basic methods to develop sales forecasts, along with some good insight on the limitations of each.
1. Percentage of Market Share
This method is often the first-thought of the new businessperson. It is common to read in business plans, “the market is X billions, and if we get just 2% of that, we’ll have $x in revenue” which then amounts to some astronomical number, indicating overwhelming success. Using this kind of assumption alone is much to0 simplified.
What you’re not accounting for is how many competitors, their relative size, and how strong their market entrenchment is.
What needs to be considered is a concept called “Share of Voice.” (SOV). Share of Voice simply means the share of the total marketing spending that a company is undertaking, when compared to the industry as a whole. Theoretically, if none of your competitors is marketing at all, and you come out with a big marketing campaign and a team of salespeople, and are doing 100% of the marketing, then eventually, all else being equal, you should gain 100% of the market. However, the amount of time is a factor here —depending on relationship bonds, it may take several years for you to eventually gain full control of the market.
But it does mean that if you want to have roughly the same market share as the #1 player, match them on Share of Voice. And then assume that they might likely increase their efforts as well, which means you’ll need to follow suit. It might take a few years to overtake them, but it will come.
Need help on estimating the size and growth trends in an industry sector? Always look to your corresponding industry association for the latest data. Many of them post reports online regarding overall trends. In addition, chatting to the people running the association will yield great insight on the identities and marketing efforts of the industry leaders.
2. Basing Sales Forecasts on the Previous Year
If you’ve got some historical data, why not use it?
In this method, a business might go by last year’s results, and decide whether certain factors will positively or negatively affect revenue. Some of these factors might include:
- Economic growth – Take a look at provincial forecasts, national forecasts, US forecasts, and any other global forecasts relevant to your business. If you have a retail business, ask the closest retailers nearby what they are forecasting, and if they are planning to boost marketing efforts which might bring traffic your way.
- Pricing factors – Can your pricing stay the same, be increased, or
- Competitive factors – Do your homework on your competitors. Do they have new innovations likely to steal market share from you? Or do they look tired and weak? One quick tool you can use is an online traffic estimation tool called SEMRush. This tool allows you to enter a competitor’s URL and it will tell you whether the site is growing or shrinking in traffic. This can tell you whether or not a given competitor is on top of its marketing.
- Your improvements – Have you developed anything new and exciting lately? Can you go to your existing client base and sell them a new element of your service? Or, are you sitting still?
- Interrelated products – Will an increase in one product or service line affect sales of another? If you are estimating several distinct products or services, consider the relationships between them.
The above factors will certainly be part of the puzzle, but you also need to look at the third method.
3. Forecasting Based a Marketing or Sales Funnel
Especially if a company is starting from scratch in its first year, often the best approach is to set a sales goal, make a commitment to a certain level of marketing, and then make reasonable assumptions about closing rates.
If direct sales is your core marketing method, this is basically a “sales funnel” – in other words, there are lot of people at the top of the funnel, but only a few actually become real clients. i.e. Contact 500 people, meet with say 100 of them, make proposals to 50 of them, close on 20 of them in a year. Now, is 20 clients enough? If not, you might want to start by contacting 1000!
Now, what if you are using indirect marketing or advertising? Traditional advertising typically has very weak statistics to indicate how many leads might come from a given advertisement. This is why few new businesses try traditional media advertising. The first year is kind of a gamble; only in the second year or so can you reliably forecast the affect it will have on your business. Sometimes it is best to wait until you have some money to gamble before using traditional print or broadcast media. That’s not to say it won’t work — it just takes money to refine it, and enough money to stick out until it is refined. And certainly, don’t do it without the help of an expert to give you the best shot at messaging and designing for maximum impact.
The sales funnel concept also applies to website traffic. And the good news is, there are tons of statistics on web traffic. A recent study by Google showed that getting your website into the #1 position on a key search term means you’ll get about 42% of the traffic for that term. And remember that I mentioned SEMRush? This will tell you how much traffic that is, i.e. you can find out how many visitors your competitors are getting, and if you see they are in #1 for several search terms, you know what kind of traffic that might bring to your website if you can match it. A good SEO expert will be able to give you quite accurate information on this, as well as how much traffic can be gained by ranking on various keywords (as can we, at Tenato). If you’re a real do-it-yourselfer, try the Google Adwords Keyword tool to search for traffic volumes on various keywords…however, make sure you’ve selected exact match in the correct “location” – i.e. country.
Once you know how much traffic you might be able to generate, you need only estimate the conversion rate – i.e. how many of the visitors to your website will make inquiries? Here’s a good resource for estimating conversion rates.
And from there, what is your sales closing rate? If you’re new to your industry, estimate 1/6 (which is a conservative closing rate across industries), and see if you can do it! If not, you might need a little sales training…
Sales Forecasting is a difficult task, to be sure. As you can see, there are benefits to all of the methods, and the best approach is to take what you can from all of them. Even as I write this, I continually think of more ideas, more ways to get better information! If you have any ideas to add, I’d love to hear them.
One final word of advice — when doing your research, be sure to triple-check your sources for currency, and make note of which sources you used throughout. And if you need a hand, please give us a call.
How to Market a Restaurant, Hotel, or Attraction:
10 Helpful Tips
We just became the newest members of Tourism Calgary! This is going to be an excellent way to build on our hospitality marketing base. So, we thought we’d give you some fresh and original marketing tips, designed for attracting visitors to your exciting destination.
- Do-it-yourself market research. Have you asked anyone you trust to mystery shop your restaurant, hotel, or attraction lately? It’s an amazing way to get brutally honest feedback – especially if you ask for it that way, i.e. “be brutally honest.” Perhaps tiny things such as how long the service took, the frustration of not finding a parking spot, or even the “funny smell” in the bathroom are undermining a whole ton of marketing effort you’ve been investing. Ask people of various ages if you can — maybe the door is too heavy for an elderly person, or the seats are too stubby for a tall person. Offer any incentives you have to in order to get the help you need. Maybe a prize for the most brutal feedback ?
- Meet the neighbours. Are you in a shopping district, or are there other businesses nearby with whom you could collaborate on marketing? Go and meet them. See what they’re doing to attract visitors to their locations, and see if you can direct your customers to them, and vice versa. “Friend” and “follow” each other on social media sites, drop flyers for each other…just help! The more collaboration, the more reasons you are giving people to come to your area in the first place. If you can get a bigger group of businesses together and form a team, then you can do some real events together for your zone.
- Capitalize on Tourism Calgary. Like an expanded idea of the previous point, your tourism association is gold. As a new member of Tourism Calgary, I got a big run-down today on all the marketing they’re doing to attract visitors to Calgary. Did you realize their website gets about 100 times the traffic of a typical business site in Calgary? Over 115,000 visitors a month! And people stay on that site awhile, looking for things to do in Calgary, and places to go. As a member you get a profile page within their site, and a link back to yours, which really helps your site rank better too. What’s more, it’s free to list your events, which gives people another reason to come on down and see you. And a final thought: Tourism Calgary is packed with hospitality marketers, who will give their time to you to help you make the most of your membership, advise you on marketing, refer you to other member companies with whom you can partner, and generally help you learn how to market your company (i.e. lots of excellent seminars)!
- Use your selling skills. If you’re waiting for business to just walk in the door, you’re missing an opportunity to tackle it as it’s walking on by. Just about any hospitality business can take in business groups or private events. Go out and meet event producers or wedding planners and pitch your location as a great-sized place for various types of events….suggesting those that would be a best fit. This will involve some cold calling and rapport building, but there’s a quicker way that we recently discovered: a membership at ISES Calgary, the International Special Events Society of Calgary. This is a great way to meet people who plan the thousands of events taking place in Calgary every year.
- Build online through offline marketing. When people come into your location, do you make them feel like a part of your community? Think about how you can transfer the offline (bricks and mortar) community to an online community. Consider taking shots of your best customers (with their permission) experiencing your offering, and posting them to your website, Facebook page, and Twitter. If this sounds like a lot of work, there are cool little cameras now that have social sharing features. Once you set up your accounts on such a whizzy camera, all you have to do is snap the picture (or video), then you hit “share” and up it goes to your social sites. That makes your customers feel like they’re on a celebrity wall! And of course, getting them to then “Like” or “Tweet” about you is a no-brainer.
- Use your networks to boost rankings. Did you know that when a big, credible website has a link back to your website, it really helps you rank better on Google? Most businesses are members of various industry associations, but never have bothered to go make sure their listings include their website links. What’s more, you can boost that by getting your best suppliers (and friendly neighbouring businesses, as per point #2) to link back to you. The more of these good quality links, the better your site will rank, and the better you will do online.
- Professional photography: more, more, more! I am convinced that photographers’ businesses are going to start booming in the next few years. Why? Because most websites look pretty much the same — templated layouts of some sort, standard. What makes them different is the quality of the photography, and the uniqueness of it! It’s where people’s eyes go first (and I’m talking about the main page banner images here, and feature images of your rooms, facilities, or dining.) You cannot, and must not, scrimp on photography of your destination. What’s more, get it NOW, when the weather is so beautiful, before it starts “snowing in the city, and the streets are brown and gritty” to quote Gordon Lightfoot! The more beautiful photos, the more they will sell for you, a thousand words at a time.
- Strategic content. At the same time you need great photography, you need great text content. This brings the traffic in the door (while the photos go a long way to keeping the traffic on your site) because text is what search engines recognize. What words would people use to find you? Try punching some ideas into the Google Keywords tool, and see what suggestions it makes. Or, give us a call to get some help with this. You can get a tutorial for this and other search phrase tools on YouTube.
- Write a daily blog about new things going on at your location. Talk about that new menu item you’re working on, talk about what happened on the big ride today, talk about the deer who wandered through your field and stole all the apples…whatever. Just make it personal, and give people a flavour for the character of what you’re offering. You want people to imagine what it’s like being there. Take photos as you go (these don’t need to be professional ones, but try to get good lighting) — just keep it coming. Who knows, one day you might use your blog to write a book about your adventures in running your business — and what a wonderful resource it will be!
- Track and Improve, Track and Improve. Whatever marketing you are doing — ads in the local paper, flyers, pay per click ads, radio, events — it is critical to track all the sources of your offline and online traffic. Use Google Analytics for online traffic monitoring, and use table-card surveys (say, to enter a draw) or other methods to ask about the foot traffic. This is the only way to hone your marketing into a science. Marketing is often a best-guess at first (unless you hire a great marketing strategy firm!) but if you continually track it, you can make it work over time. Just keep at it. Think about this question: Do you know a company that failed due to having too much marketing? Neither do I.
So there are our tips! If you would like a little more in-depth help on the marketing front, contact-us for a consultation. Details on these and our fees are on our Consultations page.
Could Social Media Monitoring Have Better Predicted the Alberta Election Results?
After reading Joanne O’Connell’s post “Why Were the Polls Wrong?”, I was intrigued by her insight and wondered if social media could shed some light on why there was such a difference between the polling vs. actual results. As Joanne stated, this election had a large undecided vote (which I believe were mostly former PC voters) that were conflicted emotionally. With that in mind and with the Wildrose controversy that played out near the end of the campaign, it reminded me of a US case study that examined how real time sentiment in social media can help overcome negative events quicker where traditional polling falls short. So did the negative events surrounding the Wildrose party leading up to the final week sway the undecided voters to vote PC?
To investigate this further, I used Sysomos Map and looked at sentiment over time and examined the first week of April vs. the last week of the campaign. What I found was different than the pollsters. According to mentions in blogs, Twitter, forums and online news, the PC Party seemed to always lead the Wildrose with fewer negative mentions and more positive mentions. (Red=Neg, Gray=Neu, Green=Pos)
To look at how this might affect voters, we have to look at each party’s reach and how that reach affected them based on when it was being utilized and what the sentiment at the time was. To best illustrate this, I looked at each party’s Twitter reach and when it was most impactful. This reach is defined as the total amount of users potentially reached by all tweets mentioning the party. As we can see, the tweets mentioning the PC Party had more reach than the Wildrose Party but not by a large margin.
PC Party Twitter Reach
Reach: 8.0 million impressions
Total Tweet Count: 4956
Wildrose Party Twitter Reach
Reach: 7.7 million impressions
Total Tweet Count: 5,576
With both parties having a large Twitter impression, it really came down to when each party made the most of its “impressions” to decide if it indeed had an impact on voter’s decisions. Reviewing the data below, a comparison of the two parties Twitter results shows them neck and neck for most of the race until the final week where some controversy hit the Wildrose Party. PC then took a giant leap on the final day, possibly due to the last few hours of the evening after the vote was decided.
In conclusion, using social media as a form of polling and with the benefit of hindsight, the social data suggests the Wildrose party made a bigger impression during a time when their negative mentions peaked. These negative mentions coupled with the party’s reach could be responsible for creating doubt in the Wildrose Party and thus swaying votes to PC or convincing undecided voters to stay put and have a movie night.
EDITOR’S NOTE: “Popularity” in the line graph is the total number of tweets pertaining to the subject. It includes positive, negative and neutral remarks. The Redford numbers consolidated above also include tweets related to PC and Conservatives in Alberta Election. Smith numbers include mentions of Wildrose party for the Alberta election. These charts, although created after the election for purposes of this blog, can be generated real time throughout the course of the election, making them a more immediate way of measuring immediate voter sentiment.
Insights on the Alberta 2012 Election
The poll slippage in last night’s election was certainly extraordinary, and all the pollsters on the evening newscasts were saying how surprised they were.
There are several common reasons why polls are “off”. The pollsters are going to have to (and they will) do their own research and then duke it out as to what happened. Pollsters live by reputation and their reputation rests partly on congruence with election results. So they will look in hindsight to see what happened. Because I personally didn’t poll this election, I can’t comment on the specifics. However, I can speak to where the reasons usually lie, and give some hints as to where to look.
First reason for “off” results is that there was a large undecided vote until very close to the election, and the polls closed down too soon to pick it up or account for it. That might have been largest factor this time. Several of the serious concerns about Wildrose surfaced only in the last week before April 23.
Second is – that the large undecided vote was conflicted emotionally, and in truth the undecided didn’t know how he / she/ they were going to vote so they couldn’t have told you anyway. That is very possible in this election. Many were very very offended by the PCs (an emotional reaction) but were also very very wary of the closest rival, the Wildrose (also an emotional reaction). And the PC campaign played up words like “scary”, “frightening”.
Third is – methodology matters, and relates to the other two. Some pollsters used telephone interview. Some used online. Some used “robo calls”. Some monitored digital and / or social media. All have their pros and cons. Telephone usually has a larger time gap from field calls to report. Robo calls are more immediate, but lack explanatory comment. Social media monitors have demographic biases. That’s what the pollsters will be duking out. How much to rely on single research media and how much to triangulate between multiple media? The best projections from poll results take all into
Fourth is – projections. Pollsters, unless they are hugely sophisticated, well-financed and poll very large samples, usually poll to “popular vote” statistics. The real issue, of course, is how that translates into seats. In Alberta, we of course have a “first past the post system”, and many of the poll results we saw tonight were very close. In other words, a small difference in popular vote made a big difference in seats.
Fifth is – pollsters (and others) were predicting a greater-than-average turnout. Early results (and I write this very early in the evening after the election) are that the turnout was not abnormally large. So some of the “intuitive” or “experiential” predictions (yes, pollster project their data intuitively and experientially as well as mathematically) were off again because the “don’t-usually-vote” people didn’t show up. This could affect the demographics of those who in fact voted, which likely relates to party
Sixth is – again putting previous points together, it is quite possible that the undecided vote turned to PC due to fear of the unknown (i.e, Wildrose being seen as “this dangerously upstart part with no governing experience”) and fear of the possible damage to the economy and good governance from “reactionary” Wildrose. Habit and the familiar won out in the polling booth.
So put all this together. In this 2012 Alberta election, we had an unusual situation with conflicted platforms, personalities and parties. It is very possible that the pollsters used traditional methodologies which weren’t strong enough to pick up the underlying dynamics.
I definitely expect one or more of the affected pollsters to do the research needed to find out what happened. How to do it? Maybe one or more of the pollsters did exit interviews (i.e, asking people after they voted what their choice was, and why) at the polling stations, and the exit interviews will eventually be made public. Or maybe the more experienced pollsters will relate the 2012 Alberta election to earlier ones when the results were “off”. In truth, however, there aren’t many such. Polls usually predict very well!
Alberta 2012 was an anomaly.
5 Techniques in Competitive Intelligence You Must Not Ignore
by Jacqueline Drew, BComm, MBA
Now, we’ve never done this, but it used to be that companies would have to go through competitors’ garbage or hack into their private networks to find out what they were up to. Today, with online “footprints in the sand” left all over the web, getting competitive intelligence is easier than ever, and is a must-include research step before developing any business or marketing strategy.
- Websites: Many companies post not only sales and product information, but things like employee lists, client lists, and supplier lists. Even the photographs used on websites allude to the type of work they prefer, or are targeting. By observing the page titles (grey bar at the very top of the web page), you can also see what types of keywords they are using to position the traffic they want coming into their websites.
- Employee Profiles: Whether or not employee names are listed on a website, employee names and profiles are often posted through LinkedIn, Twitter or other online social sites. This makes it easy to look closely at the resumes and backgrounds of key personnel to see indeed whether a company has depth of experience in a given area.
- Employee Blogging: Many people post notes about where they are, and what they are doing at work. If you choose to post updates about what you’re doing with specific clients, you could be risking your competitors finding it. On the other hand, why not follow your competitors online, like them on Facebook, etc., and be first to know about what they are up to? There is really no reason not to do so.
- Traffic Patterns: SEO online software today tracks traffic going in every direction from all over the web. By subscribing to various tools (such as SEO Moz and SEM Rush) you can find out how much traffic your competitors are getting, the keywords that they are ranking well on, and what is making them successful online. Other tools such as Active Conversion and Lead Life Solutions actually tell a company who is on its website, and how often they have visited, so that sales calls and emails can be carefully timed.
- Social Media Buzz: There are reputation monitoring and social media tracking tools today that allow you to stay abreast of what people are saying about you, and about your competitors. By tracking competitor brands, you can find out what promotions are running well, and generating positive interest.
With so many tools available, you’ll be amazed how much better you can get at anticipating competitor activity. In fact, we strongly encourage you not to just track companies you compete with locally, but firms in other areas or other industries around the world who really set the bar…so that you can be inspired to continually improve and innovate. And be careful what footprints you leave yourself – every online activity is truly up for scrutiny!