The best way to do a market analysis

So you have picked out a service that you want to research more and possibly offer. The customer base is growing, the competition is fragmented and the market isn’t a target for hobbyists and dreamers.

Your new business must provide a service either faster, better or cheaper to carve out a slice of the pie and be successful.

So your market analysis needs to be a deep look at the main companies offering the same service you plan to offer in your area considering these three criteria:

  • Accessibility / Digital Marketing

How hard is it to find the companies online? Are they buying adwords? Do they have any digital marketing? Do they have a social media presence? Online reviews? Is their business all word of mouth? What is their quality of customer service on the phone? Do they follow up with you? Do they try hard to get the sale?

  • Pricing

How much are they charging for the service? An arborist might charge $800 to take down a tree that takes 2 guys 45 minutes. Are the margins high or is it relatively cheap?

  • Speed

I have a full podcast episode on this (#13 never compete on price again). The most important factor by far because this is going to be your main competitive advantage and shows if there is a lot of demand on the market. How busy are they? How long would it take to get a quote and get service? Can they do it tomorrow? Or next week? Or the week after?

Call every company in your city and play a customer. Ask a ton of questions like:

  • How do you price this and that?
  • How do you quote jobs?
  • How do most customers find you?
  • How long have you been in business?
  • I’m looking for a reputable company with a lot of experience. How many customers do you service each year?
  • When could you come and get me a quote?
  • I might decide to do this later. Is it slower or faster during the busier months?
  • Are you generally totally booked or can you ever offer next day service?
  • Are your crews trustworthy? How many crews do you operate and how do I know I’m going to get quality service?

Get creative and specific. The goal is to learn as much as you can about a company and how they operate. You will be very surprised at what you can learn from a chatty customer service rep or a braggart owner.

Take detailed notes and you will spot holes. You want to find companies in that are backed up. Companies that are booked out a week or more. Companies that don’t have a website. Companies that don’t care if they get your business and don’t answer the phone and you have to work hard to get ahold of them. Companies that have work running out their ears and companies that are booked out a week or more. That is your main opportunity and tells you that there is more demand on the market than there is supply. There is space for you.

After a ton of research you’ve decided to pursue the venture.

Now as you model your business and build it study companies that offer your service very quickly and efficiently in another city.

Find someone in a major city that does what you want to do and does it really really well. They run a big operation. They get tons of customers. Their customer service is excellent. They can get to you tomorrow for service. They can get you a quote over the phone.

Study these businesses just as hard. You can learn a lot by picking and choosing what you like most from three or four different companies in different cities.

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January 25, 2019 6:04 pm