Many entrepreneurs go into business because they have a great idea. But it’s important to consider the needs and wants of your customers.
Want proof? Take the story of the Mustang.
In the sixties, Ford Motor Company noticed a drop in sales of their Ford Falcon. They also noticed that two other major American car companies weren’t seeing success with similar small car models.
Based on this evidence, Ford could have decided that customers just didn’t want small cars. However, they decided to talk to customers and potential customers, and uncovered the real issue behind the low interest.
Through customer research, Ford discovered that they wanted sporty options and features like manual transmissions and bucket seats, but didn’t want to splash out on a sports car. To respond to this need in the marketplace, Ford launched the Mustang, and was able to achieve record-breaking sales.
Entrepreneurs use market research to figure out important things like:
- The number of potential customers for their product or service (the size of their target market)
- What price a customer would be willing to pay for their product or service
- Customer pains that need to be solved
- Customer motivation
- How satisfied customers are with what they’re selling and how they’re selling it
For more about understanding your customers, try an Empathy Map.