…to know what their customers thought about their products.#1
Market research has long been thought the bugbear of businesses, especially B2C#2 businesses.
Testing your product is a vital part of marketing but sample testing has always been expensive enough that only the deeper pockets can afford it.
Moreover having spent the money to have researchers stop a sample of people and ask them about your proposed new product if the results come back negative you are faced with a real quandary. Do you press on regardless and if so why did you waste the money on the research or do you go back to the drawing board and try again?
Worse still is a mediocre result. You have the same options but less clarity. You are never quite sure if environmental factors or temporary social factors have coloured the result except with the aid of more testing.
Social Media to the rescue?
For smaller businesses social media can be a godsend in judging reaction to a proposed new product.
Organising a product test through social media can let you test on a scale that you couldn’t have hoped or dreamt of and have hordes of customers queuing to sample your “free” wares for the cost of a Facebook marketing campaign#3.
Downsides – yes they exist too
Giving away free stuff – or even stuff at cost – can bankrupt your business, cause people to undervalue your product or both.
Take the example of this bakery “Need a Cake”. The Daily Mail reports that filling the orders on a Groupon campaign brought the business to it’s knees – click here for details.
How your customers view the value of your product is a complex subject depending as much on psychology as the cost of production.
Scarcity of a product plays an important part of how much people are willing to pay for your product. In fact it can be a key persuader – see this video for details.
Some large manufacturers are purported to use this technique to establish a products “must have” status at launch. If their customers know that supply is limited and they will have to wait weeks if they miss the initial stock at the store you can bet the true fans will be camping outside the shop the night before, rather than risk disappointment.
So give away too much product and even “free beer” loses it’s attraction.
Here’s an example of a concert violinist busking in a subway completely unnoticed whereas just days before seats at his concert commanded $100 each.
As with any important business decision starting market research on-line is not to be taken lightly.
Before diving in to market research on the social network of your choice you will need to know how to “turn off” or limit the offer and how you will evaluate the test.
The bottom line: As with any market research make sure you can afford it and that you have taken professional advice.
#1 Based on a sample of 1 owner.
#2 Business to Consumer as opposed to Business to Business(B2B)
#3 Via paid adverts on Facebook. I am not covering this here as the system is prone to change, If you are interested let me know for contact details click here
Disclaimer: Nothing in this piece should be considered as advising you on how to run a social media market research campaign or depended upon as such. The article is a discussion of the pros and cons of using Social Media for this purpose. If you are considering any market research take professional advice from an advisor you trust.