If you’re about to open a business, then there are several steps that it is logical for you to take.
Foremost among them is where you are getting the financial backing. Do you have the capital to get it off the ground, or are you getting a business loan? Are you looking for investors, or are you running a GoFundMe or Kickstarter campaign because you feel your idea is worthy of crowdsourcing?
Once you have the idea and the money, you’ll next need to compile some data. Why does data matter so much for your startup? We’ll explain in this article.
Data Lets You Connect with Your Potential Customers
Data is what allows you to respond to customer behavior. If you compile data on your potential customers, then you can:
- Figure out what population segments are likely to buy your products
- Learn the best avenues through which you can advertise to them
- Learn their “pain points,” which you can then address
If you take the time to compile data on your potential customers, you can figure out their age, gender, ethnicity, income level, etc. You can then come up with ad campaigns that make the most sense. You would not advertise to teenagers in the same way as you would to older adults.
You Can Determine Where to Focus Your Marketing
You’re only going to have a limited marketing budget for your startup, so you have to make those dollars count. Based on market research and data, you can set up a targeted ad campaign that reaches as many potential customers as possible. You might focus on:
- TV ads
- Radio ads
- Social media
Even if you decide that social media makes the most sense as the channel through which you can reach your customers, you still need additional data. For instance, the crowd that hangs out on Facebook is likely to be different from the one on Pinterest or Instagram. Data compilation tells you where to focus your marketing efforts so you won’t waste money.
You Can Use Data to Find Brand Ambassadors
Many startups like to use brand ambassadors or spokespeople if they have the budget to do so. But how can you know which individuals will get a positive response from your base?
Again, data is the answer. If you do market research, or you have focus groups, then you can learn which celebrities or potential brand representatives get positive reactions from customers within your niche.
If you miscalculate who your base likes, then you might not get the engagement numbers you want.
Even worse, if you choose someone who your niche actively dislikes, then you could get negative publicity. That sort of miscalculation can sink your brand before you ever truly get it off the ground.
You Can Use Data Compiled from User Testing
You can also learn much about your base from data compiled from user testing. For instance, maybe you have a product in the beta phase, and you want to see how some of your potential customers would interact with it. You can bring some of them in and watch as they try it out for the first time.
Then, you can do a focus group and ask them what they liked or disliked about it. You can put the data you compile to good use when you’re ready for the actual product rollout.
You Can Find Out What Parts of Your App and Website Work
You don’t need to have a physical product to use this strategy. You can also do this same thing if you have a website or app in the beta phase.
For example, you can use heat mapping to see how long your potential clients linger on certain parts of the site. If they express frustration with the site mapping or another aspect, you know that’s where you need to make changes. You can pay the group you bring in to test your product or give them gift cards or other compensation forms.
If you jump into a product launch with no data, then you are surely doomed to fail. Testing your products, compiling and analyzing data, and seeing what your competitors are doing are all process aspects that you cannot afford to overlook.
When you see a new product hit the market, rest assured, it never got there without data analysis. Take the time to do the steps we’ve laid out, and your success chance is much higher.