Market Research: Know who your customers Really are
Fast-growing companies deeply understand their customers and communicate with them through this lens of understanding. Market Research is how they gain this level of insight into customer needs.
When companies grow rapidly, it is almost always because they have identified the right market for them and have built a complete product that fully addresses the need of that market, better than any competitors.
THE VALUE EROSION PROBLEM
Competitive advantage erodes unless relentlessly honed through disciplined market research.
Most companies were founded because they saw a compelling need they could meet. There first few customers were people they knew, referrals, and buyers who were actively searching for a solution.
Over time, however, they started diluting their initial focus by making their products general purpose in the hopes of appealing to a wider market. The products begin to be feature rich as sales people request more features in the hopes of closing this or that deal.
Products become unfocused, and sales people spend their time learning the product rather than their customers and hope to close deals by demo, hoping the “product will sell itself”.
The key to faster, more profitable sales growth is to deeply understand and serve a well-chosen market space--better than anyone else.
Four powerful reason why market focus is critical and why market research is the path to high growth.
1. Deals close Faster
Showing value and return on investment is much easier when products are focused on solving a compelling problem for a given well-defined market.
2. Deals close at a Higher Rate
When sales reps are focused on just a single market, they will have the time necessary to deeply understand that market and become a great resource to buyers.
They will be able to convincingly talk about real pain, how to solve it, and how to demonstrate that. As a result, they close more deals.
3. Higher Average Deal Size
Focused products that easily demonstrate ROI are also easier to justify higher cost. Sellers do not have to discount from list price since they can demonstrate the return on investment. Average deal sizes become larger.
4. Retain customers longer
When customers find products that fully address their needs, they begin to see the product as a “must-have”. Even during recessionary times, they will continue to buy since they greatly depend on the product for their core needs.
Can You Answer These 3 Critical Questions?
1. What compelling needs do your target customers have that they must solve now rather than later?
2. Who are the key decision makers and influencers, and how accessible are these to your marketing and sales efforts?
3. Who are the key competitors you must beat to win these customers, and how exactly will you do that?
SOMAmetrics Market Research Model
SOMAmetrics follows a rigorous market research methodology to understand the market space as a whole (secondary research) and then take a deeper dive to understand how end users are grappling with key challenges today, how long it takes, what risks and costs this broken process brings about; and what measures these end users are taking today to overcome the challenges (primary research).
The data and insights that emerge provide a prescriptive description of what the solution should do, thereby providing the requirements for the Minimum Viable Product (MVP) needed in the Go To Market Strategy.
At a high level, our research methodology has the following steps
- Conduct preliminary research to understand the fundamentals of that market
- Prepare online survey questions based on the preliminary research
- Launch the survey and analyze the macro level requirements
- Conduct the interview with 2-3 end uses and managers
- Create a detailed before and after scenarios capturing the frustration and challenges before the introduction of the MVP, and how the MVP will fully address this pain.
This research provides the necessary data and background for the Go To Market Strategy that will be developed in order to drive the MVP into a dominant position, leading to high revenue growth.