McCombs School of Business
Knowledge

Testing the Market
Survey Potential Customers

Entrepreneurs planning to launch a new product or service should conduct a market survey to evaluate its feasibility (Clark). Surveys are powerful tools that, if used effectively, can show important insight into the world of doubt.

Travis Landers, a recent University of Texas BBA graduate and entrepreneur, uses surveys as a benchmark for successful market analysis. After receiving funding for a business plan offering travel-planning services, Landers conducted an in-depth email survey of 180 college students from around the country. He used the survey to ask his prospective market what they thought of his business plan and idea. From the survey information taken, Landers completely reshaped his business model to match the needs of the market. Again, the key to success is knowing the customer. Surveys help inventors more easily shape their product offering and feel to fit the needs of their target customers.

Surveys ask important questions from a random sample of the target population, and are one of the easiest ways to judge a potential market (Landers). As mentioned above, surveys can help figure out how much the public is willing to pay for a product, which is often more than it costs to make it. There are numerous reasons to use a survey, a few examples include finding:

  • What services are most important to customers?
  • How much would customers pay?
  • Where do customers go for products?
  • What product attributes affect consumer purchases?
  • What form of payment do customers prefer?

There are several methods for conducting market surveys, but they all stem from the same purpose: finding useful information. Most surveys ask quantitative questions to allow easy statistical calculations (Landers). For example, one question might read, "On a scale of 1-10, how much do you like going to the movies." The survey participant answers with a one through a ten. Asking questions quantitatively also makes it very simple for users to take the surveys and doesn't leave much room to make up answers (Landers).

Surveys can be given in any form. The most popular mediums are via telephone, handouts, email, web sites, and in person. One inexpensive but effective technique for assessing the strength of demand for a proposed product or service is conducting in-person or telephone interviews with potential key customers. Direct mail surveys and participation in trade shows also help an inventor gauge the market while a two-tier approach involving cold calls allows them to solicit more accurate, in-depth responses from target customers (Clark).

By implementing a market survey, and correctly understanding its results, an inventor will have an understanding of what needs to be done for product success.


Paper outline

Check out the Silent Timer Web site to see the product Erik took to market. Contact him with any questions.

 

 
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