There are multiple businesses in the market that have managed to discover promising markets for their products or services that will tackle the existing problems. However, they have been restricted in their stride by thinking what if they invest huge amount of time, energy and cost in to this segment and the outcome results in failure? This is a very important consideration for the business. It demands a process which is skipped majority of the time. It is the process of validating your market in its entirety. This is a crucial step in the identification of the profit potential for your market. Although there is no hard and fast rule that can guarantee you success, nevertheless, there are certain steps that can be followed in order to give your business a promising chance. These steps are briefly mentioned below.
Is there a demand for your product or service?
This involves the calculation of the total number of potential customers that will be purchasing your product. Are the customers in the segment have overcome the problem or still suffering from it? This gives an idea of the amount of people interested in the product. a lot of surveys have been conducted on various products and people's taste and preferences. You can take the assistance from these surveys in order to analyze your 's profit potential.
Secondly, the internet has become one of the most economical commodities in the modern world. It contains vast amount of information on variety of issues and subjects out of which majority of them can be accessed freely. Hence, typing your product keyword in the search box of popular search engines, you can get a fair amount of idea of how much profit can be earned for your product.
Furthermore, if the product is an online product and you are promoting on your blog or website, you can check out whether it involves the adequate advertiser's base in key PPC (Pay per Click) Advertising networks. It is known that Yahoo Publishers Network (YPN) and Google AdSense are the two most popular PPC programs on the internet. Thus, you can make use of the above programs to track down the amount of traffic and average CPC for your important keywords for AdWords/AdSense.
Is there any competitor that is already targeting your segment?
It is very important for your business to know in advance the products that have been sold by your rivals. If you come across the competitors that are already selling your product, it is advisable to analyze their business and products more deeply rather than switching your product. This strategy involves the SWOT analysis of their product in order to identify the elements that you can improve, enhance or modify. This move will put you ahead of your rivals and would give a solid reason to the customers to switch to your product.
Does you product has a high lifetime value?
The term lifetime value implies the sum of the value of each consumer to your product as they are perceived to buy from you on a regular basis. The questions that you need to ask yourself are the following:
1) Is it easy for you to transform one-time buyer into regular buyer?
2) Will there be related products beside your main product for your customers to build long-lasting and valuable relationship with them?
The fact of the matter is if you are selling out one product, it is not at all inappropriate to come up with other related products as it is much easy to sell to regular buyer than finding a new one.
Visit Brian's website, http://www.BusyEntrepreneur.com and learn all about business plan writing for your online business!