Plan to Keep Product Development Moving Along

 
With everything that goes into starting and running a business – even a small one – it’s easy to get so wrapped up in the new, exciting things that you let something slide.

The solution is to develop a comprehensive business plan to begin with, along with a schedule for implementation. Of course, then you have to remember to check it regularly so everything stays on track!

Fortunately, my product development lapse was not a major one. Since I’ll be selling my own art in my online gallery, there’s a bunch of it lying around, ready to be promoted. But, I’m also planning on selling limited edition prints of some of my work. And, after doing initial research on vendors, I hadn’t followed up on the details to make sure everything would work as I’d planned.

Turns out, at least one of my assumptions was incorrect – the time required to make the prints – which will adversely affect production and delivery times. For example, it takes three to five days to make a print and I had assumed one or two. I plan to wait until I have my first order for each print to produce the entire edition, so my planned production and shipping time from receipt of the order – at least on the first print – has gone from my projected five to seven business days to a minimum of seven to ten business days.

While this isn’t an insurmountable problem, one of the basic rules of customer satisfaction is to under-promise and over-deliver. I certainly don’t want my customers to be upset because their prints don’t arrive when I say they will.

To resolve it, I’ll do two things: (1) Manage customers’ expectations by changing the shipping information on my website to allow for the longer production time, and (2) Locate secondary vendors of the same quality to ensure I have a backup if there’s a problem like an unusually large volume of orders.

Implementing the first is easy, since I haven’t even created the website yet. With the second, although I don’t anticipate a lot of orders, it’s good to be prepared and I might even find someone faster and better to become my primary supplier.

Every business will have problems, but the better you plan, the easier it is to see them coming and minimize them.

On Wikis, Websites, and Cloud Computing

 
I promise, this is the last thing I’ll write about wikis – at least for awhile. But several posts from the last couple weeks all came together for me and I thought I should share my insight.

First, a final (for now) word on wikis. After my wiki frenzy which resulted in my failure to launch due to both hardware and software inadequacies, I checked with my planned web host provider and guess what? They support both PHP5 and SQL4. This is good news because, when you launch your business website, all the hardware and software you need to support a wiki will probably be right there.

I also received a comment from Aaron Fulkerson directing me to download the free and open source MindTouch Core here: http://mindtouch.com/Community. Thanks, Aaron!

That’s one of the great things about having started this blog – the more I write, the more things come back to me. I’m looking forward to experimenting with the download.

I didn’t see specific wiki software listed as one of the features, but I’m sure – since the hardware and software are there to support it – that you can add one to your website. Which, believe it or not, brings me back to the idea of cloud computing.

Cloud computing – if you’ll recall – provides storage for both your software and files on the Internet, allowing you access from almost anywhere at any time, even if you’re not using your own computer. So, if your website is hosted online and your wiki and blog are hosted online, and almost all the research and news content you need is online, is it such a big step to running your entire business from a simple Internet portal, letting someone else handle all the hardware and software hassles?

Except for production, in my case creating the art, digitizing it, and loading it to the website, you really could do it all.

Determining Product Positioning and Pricing

 
One of the biggest challenges facing a business is how to position and price its products and services.

Of course, if you’ve developed solid business and marketing plans, and have created a workable brand image for your company, establishing positioning and pricing may almost be automatic. However, if you’re still struggling with the development phase of your plans, determining the right mix can be a real headache.

I know, I’m in the midst of it now.

My initial idea as I began the plans for my online art gallery was to promote my own work at a low price and to have as broad a “product line” as possible. Good as far as it goes, but requiring a lot of work to create the site, load the images, track the inventory, handle a large number of orders, etc. – all the boring business stuff that I don’t like to do.

Then, in the course of my web hosting research, I discovered another roadblock to that plan: the e-commerce capabilities offered by some sites are limited in the number of products they can manage, as well as several other things. This from the review of a disgruntled user.

The work-around is to use a third-party vendor for the e-commerce software, but the hosting services don’t provide support for that software, so unless you know what you’re doing, you could have serious problems. After all, we’re talking about money here – yours and your customers – and there’s nothing that upsets customers more than paying for something and not getting what they expect.

So, I went back to the mental drawing board to try and find a solution.

In the meantime – somewhat serendipitously – I visited a couple art galleries – doing market research, you know.

If you’re ever in Carpinteria, CA, I can highly recommend the Chalk Gallery. It’s a tiny place, but has an excellent selection of first-rate work – really nice people, too – and can also be visited online at:

www.chalkgalleryart.com

But I digress, somewhat….

As a result of my gallery visits, I realized that galleries have to show new work all the time to keep prospects and customers coming back. I know, that’s a great big “DUH, of course!” But for some reason, I had it in my head that I had to push as much art onto my website as possible; something for everyone’s taste, and then just keep there.

Obviously, I’ve changed my mind or I wouldn’t be writing about it now. Instead, at least to start, I’ll be providing a much more limited selection, at higher prices to create a sense of value and exclusivity, and will be rotating the work more frequently. Pieces that don’t sell go out of circulation for awhile and return periodically, along with new work, to keep the site fresh.

Also, to keep the site high on search engine lists, I’ll also be writing frequently about art in general and mine in particular, something I hadn’t planned to do. After all, you’d think this marketing blog would be enough to keep me busy!

The point of this rambling is that, within certain parameters, you may have a lot of flexibility in how you price, position, and even promote your products and services. Increasing the price and reducing the availability may generate the same revenue from fewer sales, resulting in less work for you.

When I first started as an ad agency account executive – moving over from the creative side – I spent a lot of time going on calls with senior execs.

Two concepts became very clear to me, which I intend to incorporate into my online gallery. First, it takes about as much effort to sell a small account as it does a large one. And, second, the large one will not only generate more revenue for you, but will also be more likely to hire you because your cost to them is a much smaller percentage of their operating budget than it is for the small client.

Hopefully, this approach will attract more affluent customers. At any rate, it should enhance the brand image I’m developing of upscale sophistication. Of course, I can’t compete with top galleries and artists, but the Internet is a great equalizer, allowing me to present an image of the gallery and my work that rivals businesses with much larger budgets.

Market Research: Primary and Secondary

 
In addition to qualitative and quantitative, market research can be separated into two other categories: primary and secondary.

Primary Research

Primary research is what I usually think of first when research comes to mind; focus groups, surveys, etc. where the researcher gathers information directly from a sample of the target audience. While this is great to have and can provide many specific and useful insights into your market, it can also be very expensive.

It’s also possible that the information gained from primary research is available in other forms, and much less expensively, if you just know where to look. And, for a business on a budget, this can be critical.

Secondary Research

Which brings us to secondary research. This is data that can be gathered without having to go to the time, trouble, and expense of doing primary research. All it really takes is a little of your time and knowing where to look. There are many resources for secondary research, both free and for sale, and their value to you depends on just what data you need.

Source Directories are just that: directories of data sources. Some are quite expensive, a good university or public library will have them available so you don’t have to incur an unnecessary expense.  Others can be purchased at bookstores or online, and some are free.

Industry Experts and Trade Publications can be another good source. You can request media kits from trade publications – or download them from their website – to gain insights into their audience demographics. Experts in an industry may also be willing to provide their perspective.

The Internet has become the catch-all for much useful information. Many “traditional” sources have websites with information, many consultants offer free white papers and reports to entice you to purchase their products or services. Often the free information they have is adequate for the needs of a small business.

Company Data that your business has already compiled may be very useful. Often this is older research or was gathered for a different purpose. With a little manipulation, it can possibly be modified to meet your needs, it’s at least worth reviewing it.

The Government can be a wealth of information, including census and industry data, much of which is free and accessible online.

The Media can be useful as well, although it will probably require more digging on your part to come up with specific actionable data. Internet search engines can help you narrow down your search.

As valuable and interesting as primary research can be, there is probably something already out there which can be modified to fit your needs – at minimal expense. Consider doing some of the digging yourself – or even hire a research firm to do it for you – before you commit to the time and expense of primary research.

Market Research Types: Quantitative and Qualitative

 
Now that my market research caveat is out of the way, we can dig into the details. I feel a little bad about doing that, because most of the market researchers I know are nice people; very ethical and professional.

I guess it’s more for the business executives who order the research and often seem to think that just because there are numbers, it’s accurate and correct. You really need to understand the whole process to be able to put those numbers in context and draw any meaningful conclusions.

Quantitative Research

Speaking of numbers, quantitative research is all about the numbers. It’s used to calculate market size, buying patterns, brand awareness, etc.

Using secret market research formulas, which are only taught at an undisclosed location, a sample size is determined which will give a certain degree of accuracy to the data. For example – and these are not accurate numbers – if you wanted your data to have 95% accuracy, you might have to survey 2.4% of the target audience to allow you to project responses at that level. If you want 80% accuracy, you might only have to survey .3% of the audience.

So, the more accuracy required, the larger the survey group and the higher the cost.

Quantitative research will tell you what percentage, or how many, of the people in a target audience can be expected (within a certain margin of error) to do or believe something. You probably remember polls from the last election stating that Candidate X has a 38% approval rating, plus or minus 4%. That’s the essence of quantitative research.

Qualitative Research

Qualitative research takes the opposite approach. It’s all about ideas, feelings, emotions, and concepts, and cannot be extrapolated to project the behaviors of the target audience. That’s an important difference between the two: the ability to predict, using a limited sample, what the larger group will do. You can do it with quantitative research, you cannot with qualitative research. Ever!

You might be thinking that this limits the value of qualitative research, but the opposite is true. Qualitative research really should be done before the quantitative research because it can give you ideas about the behavior of your target audience which can then be tested with quantitative research.

Qualitative research allows you to talk directly to your customers and prospects to learn what’s important to them through focus groups, in-depth interviews, and other techniques. Remember, it’s completely subjective and – no matter how “true” it seems to you – only the quantitative research provides a level of “projectability” for the data.

Just because someone in a focus group loves your product, that doesn’t mean anyone else will. Let the New Coke disaster be a warning to all who use market research. I know, there are other research fiascos I could mention, but as a Pepsi drinker, I like to take shots at the other guy. Like they care what I think…