Sometimes I forget the amount of time and effort that goes into creating a new product or service to sell to the world. When I see a gizmo that's flying off the shelves (or the e-shelves, as it were) I say to myself 'wow!' I wish I'd thought of that. Or, maybe I could compete with them and find a way to get their customers!
Then, I get into the research... and the research is tough! It takes many hours of painstaking (and often boring) reading and researching to find a few facts that will let you know whether it's worth the next months of your life to put together a product. I really have to work on my discipline to get through it.
Most of the time, I'll decide that I'm just not interested enough in the product to justify the time it would take to put it together. Some of the time I decide that the market isn't big enough or motivated enough to justify it.
On a rare occasion, I decide to pursue it - and then a few months later I say to myself - '
DAMN - why did I decide to do this!!!' Then a few months after that, when the money is coming in I say '
YES - I sure am glad I decided to do this!' Although, occasionally I say '
Who the f*** decided to do this project!'
Anyway, I decided that I'm tired of people asking me if I think something would be a good business to start, or if I think a product would sell well, or if I think it's a good idea. Most people don't think the right way about their business - they're backwards - putting the product before the market. You must put the market before the product - always. If the market doesn't exist, or is not profitable, then the product should NOT exist either!
Most people make the mistake of creating a product and then try to find a market for it. They say "Travis, I have this idea for a doodad that would make it easy to perform a tracheostomy. Do you think that's a good idea?"
What they should instead do is find a market - a passionate, hungry market - and come up with a product for it. You say "Hmmm... I wonder if there are very many people out there that are really interested in tracheostomy and have purchased tracheostomy related products before?"
Why find a hungry market first?Gary Halbert has a standard story that he likes to tell to people at his seminars. He asks them what advantage they would take first if they were opening a new fast food hamburger restaurant.
Some people say location, others want superior meat, the lowest prices, etc... He says "whatever." He goes on to say that he'll give them every single advantage that they've asked for - he only wants one advantage in order to sell more burgers than anyone else.
All he wants...
Is a Starving Crowd!
When marketing a product, you want a starving crowd. Someone so eager and hungry to get their hands on your product that they'll do anything for it. They'll lie, cheat and steal just to get it. And, there are ways to find people like this. You can find people that have already demonstrated that they have a hunger for a certain type of product. Then, all you need to do is figure out a way to sell a new or similar product to the same types of people.
When you fall in love with your product (before your market) you're starting off behind the 8-ball. You may have gotten lucky and invented a product that has a massive market appeal, for a group of people with money to spend, that have proven that they spend money on that type of offering. But more likely, you've created a product that solves a problem for an unknown group of people that have never heard of the type of solution that you offer. That's tough to sell...
How do you find hungry markets?There are quite a lot of different ways to figure out if a market is hungry or not. You combine a few of them and you really start to get a picture of the type of person that's likely to buy a certain kind of product.
- SRDS - Stands for "Standard Rate & Data List Book". It's a huge book with a description of thousands of available mailing lists. You can find a list for just about anything in there, and break it down in all kinds of creative ways.
A mailing list is the best indicator of a market because all of the people on the list have bought (or voluntarily signed up for) something. This gives you a pinpoint target of your customer - you know how many people are on the list, what they purchased, how long ago they purchased, and what their basic demographics are. The bigger the list, the bigger the market! The higher the dollar amount of purchase, the more lucrative the market!
The SRDS book is not cheap! It is, however, worth the subscription price. Until you're ready for that, though, it's usually available at your local library.
- List broker - Like a real estate broker for people and addresses. They use the SRDS a lot, but they also have many other sources of lists and markets.
Sometimes you can ask your list broker for an example of a sales letter that has worked on a particular list in the past. This is very valuable!
- Magazines, Newspapers, and print products - A lot of web site and mail order ads are placed in space ads in magazines and newspapers.
When John Carlton (respected copywriter and direct marketer) and his crew are researching new markets, they will go into a Barnes & Noble, pick a magazine up off the rack (any old magazine, it doesn't matter because they're not reading it) and stare over the top of it. They look for which magazines people are picking up, and where in the mag they're flipping to. They study what people are looking at, and for.
Then, they purchase 20 or 30 magazines, take them home and pore over them.
They find interesting appeals and products, and buy the magazine for a couple of months in a row. When they see an ad appear over and over again in a magazine - they know it's profitable. Plus, they know what kind of marketing is already working to get that crowd to purchase the product.
Once you've identified a profitable niche, you do further reseach and decide what (if any) product to market to that crowd.
- Overture inventory and wordtracker - you can get a basic idea of the size of a market by becoming familiar with the overture inventory tool. You type in keywords, and the inventory tool will tell you how many people across the overture network typed that keyword into the search engines in the last month.
It doesn't give you any idea whatsoever if anybody is making any money off of those people that typed in the term - just how many are doing it. That's the job of the next tool.
- Overture bidtool bid prices of competitors (generally, the higher the bids, the more profitable the market) - The bidtool will tell you exactly what people are paying each time someone clicks an ad in overture. When you find a keyword that is getting a lot of people paying a lot of money for each click - you know you've got a profitable niche. When you combine that with a keyword that's getting a lot of searches (see the inventory tool above) you know you've got a profitable market. Another neat tool is Googspy.com. You type in a keyword or website, and you can find out who is advertising on what keywords.
- Alexa ratings of competetive sites - The Alexa rating of sites that are in a certain market are a fair indicator of how much traffic the site is getting.
Anything under 100,000 is pretty large (~2,000 visitors per day). Anything under 10,000 is enormous (~30,000 visitors per day.) When you've got a site that's paying a lot of money for popular search terms, with a high Alexa rating, you've found somebody that is making money - and chances are they're not the only ones in the market. Install the Alexa toolbar, and you'll never again be able to live without it.
Write down everything you find. Everything that may be of note later. I have found that Halbert's method of writing each individual note on a 3x5 card works for me. It allows you to shuffle through them all later and easily digest the data.
Once you compile all of this information, you'll have a pretty clear picture of the market opportunity. You'll know who and where your customers are. You'll know who and where your competitors are. You'll have a pretty good idea of what kind of advertising is already working on their customers.
You can take this information and boil it down into a information product. You can private label a product already on the market, or create your own. You can build a valuable service to sell. I'll try to write up a step-by-step article on 'how to create your own information product' in the near future.
In the mean time - go research some markets!
Travis
Labels: online marketing