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The limitations of online market research

Online market research can only tell you what’s been happening in the recent past. There is no guarantee that it will hold true going into the future.

Things change. I’m writing this in the summer of 2009. Last fall we had what amounted to an economic collapse. Some markets that had been doing well tanked without warning and others increased dramatically.

So keep in mind that you are researching past behavior that may or may not hold true in the future.

The data you collect is just a snapshot in time. This is even more true with the competition numbers which tend to be much more fluid than the number of searches.

How to adjust for these limitations…

1. Test.

Once you have a group of keywords, test them. Throw up a no frills website (WordPress blog recommended) and see if you can generate the kind of traffic you thought you could.

Once you have the traffic, you need to make sure you can sell them something. Rather than developing your own product, think about selling someone else’s affiliate product through Amazon or Powell’s.

2. Use Google Trends

Though still a backward look Google trends can show whether the market is increasing or decreasing. It will also alert you to seasonal fluctuations that are typical for a particular keyword.

3. Watch your Stats

Google Analytics is one of the greatest tools out there and I highly recommend you use it.

4. Review your Research

Periodically review your research. I review mine every month or 2 with a particular focus on what the competition is doing.

5. Know your Market

Stay connected with your market so you know what’s going on, and be prepared to respond quickly to any changes.

6. Have Multiple Streams of Income

This may mean different products within the same market, different products in different but related markets, or it could mean products in a completely different market.

Having multiple sources of income is your insurance against market changes, Google whims and economic fluctuations

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4 Responses to “The limitations of online market research”

  1. Eric Says:

    Hey Susan! Nice article here!

    What is clear is that the uncertainty means that researching a business’ market has never been more important.

    These tools are good but have some limitations indeed. Another thing that is called “Online Market Research” is online surveys. DIY online surveys will be free so good to use but it may be hard to question your target market.
    Using an agency is definitely more efficient and faster to collect relevant feedback and information from your core target and it is not that expensive! A pity that many entrepreneurs don’t do it – not least because of the supposed cost.

    Starting a business? Launching a new product or service?
    Test the market first!

    Eric

  2. admin Says:

    Thanks Eric!

    My problem with surveys is that people often say one thing and do another. Glenn Livingston has done a tremendous amount of research on how to use surveys effectively. I like his work a lot.

    Though a well constructed survey can tell you a lot, you still need to know what keywords people are using before you even begin.

  3. Primary market research for startups Says:

    Hey Susan,

    I agree about your point don’t worry, keywords are definitely really important as well!

    Thanks for the website, interesting indeed.

    Regards

  4. admin Says:

    Yes, everything online begins with keywords. It’s amazing to me how many people skip right over them and then wonder why they’re not getting any traffic.

    Susan

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