So, before a company even considers things like their strategy and marketing spend, they must know where they stand in the market, which can only be distilled through research and due diligence. Here, we provide three simple tactics that will help you get a better grasp on the position you occupy in the market.
Nearly all organizations currently have a presence on some form of social media – 71% of small businesses, according to Clutch – but many are not capturing the full potential of the platforms on which they maintain a presence. Many businesses focus heavily on using social media to market, post, and communicate with both current and potential customers. But, as discussed before, one must first understand where they stand in the market before they can promote effectively.
One important, and often overlooked, element is listening. Customer surveys are great tools, but customers often do not answer them honestly and many customers don’t answer them at all. To more effectively take the market’s pulse, use social media to hear what your customers are saying when they skip the survey.
Doing a simple search for posts about your brand is a start, and it may be enough when your company is small. When both your company and customer base grow, however, you can turn to available AI tools that monitor your brand’s social activity and aggregate the results into actionable reports. Do a Google search for “social media sentiment analysis.” No matter your size, don’t limit your searches and analysis to posts about your company; take time to find what people are saying about your competition!
Social listening is a great way to get your feet wet with market research, as it is neither costly nor time intensive! A small investment in market research can go a long way. Though our other tactics are costlier, they can provide tremendous value.
Your Net Promoter Score (NPS) gives insight into the loyalty and satisfaction of your customer relationships. It’s known for its strong relationship with revenue growth, a relationship that’s even stronger than that of classic customer satisfaction scores. According to Bain & Company, a good NPS correlates with 20 – 60% of organic growth, and they observed through their client work that the NPS leader in an industry grows two times more than competitors.
This score is concerned with three areas of your company:
Promoters (customers actively encouraging others to use your product/services),
Detractors (customers actively encouraging others to not use your product/services), and
Passive customers (customers who are neither promotors nor detractors).
To construct a Net Promoter Score, a company must survey their customers. The percentage of customers who fall into the “detractor” category are subtracted from the percentage of customers who fall into the “promoter” category, and the constitution of these categories can be customized to a company’s liking.
If you have a positive NPS, your customers are not only your benefactors, but also your allies. They work both with you and against your competition; they are doing your job for you by marketing your product and steering others away from the alternative. Turning your customers against the competition and into unpaid employees is one of the keys to achieving exponential growth. Gaining a promotor means gaining their network, not just another sale. If you have a negative Net Promoter Score, on the other hand, you must work against the testimonies of your own customers, an almost impossible task in the long run.
A company’s general strategy and marketing strategy should both vary greatly depending on whether their customers are working for them or against them, so this information is key to making informed decisions.
This tactic is different from the others in that it is geared toward new or recently changed products or marketing. In this way, you can gain insight into where you will stand in the market, rather than where you currently stand in the market. Of the over 30,000 new consumer products introduced to the market each year, 80% of them fail. Leveraging a prototype and test approach helps you avoid being a part of this 80% by cutting your funding to doomed products before they have the chance to fail.
The purpose of this method is to examine the reactions of potential consumers to your planned product or service before you go to market. This should happen before, or in the very early stages of, any R&D spending. Before your organization finances a new initiative, a concept test will provide beneficial insight into the perceptions, desires, and needs connected with your product or service.
To illustrate, when an individual is asked, “Is the price too high?” the replies will always be skewed toward “yes,” because 1.) Everyone would rather pay less than more and 2.) Answering “yes” may lead the company to consider lowering their prices, an outcome all consumers desire. In the market, consumer preference for a product is always benchmarked against the value of the money paid for the product. The consumer must choose the product over whatever else they could buy for the money, and the company knows the consumer values the product enough if they make that choice!
One way to benchmark your concept tests, and know where you stand in the market, is to have potential consumers choose between your product and the competitor’s product, while holding all else constant. Then, and only then, can you ask your customers why they chose the product they did. This is the classic blindfolded Pepsi vs. Coca Cola test.
These benchmarked tests can be used for marketing, product adjustments, and product development. What’s more, though acquiring this information is costly, it is proprietary and unavailable to your competitors. These tactics are great tools for companies of all sizes to employ, but some are a serious investment of time and money. If you’d like to get a taste for using our processes for assessing your company’s competitive advantage, download our eBook.
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