Imagine two entrepreneurs: Joe and Harry.
Joe started a blog about fitness. He wants to release a five-part video course on being a better runner because he thinks people might like it, and prices it at a high number that “feels right.”
Harry started a blog to help 30-something men learn how to build more muscle. He wants to release an e-book introducing the concepts of powerlifting. After sending out a survey to his list, speaking to 20 people he considered his target customers, he found out their biggest pain point was not knowing what movements to prioritize — and they were willing to pay more than $50 to solve it.
Both guys just started a fitness blog and soon want to release a product — BUT only one of them is going to make more money.
Can you guess which one is more likely to be successful?
Hint: It’s the one who studied the market.
In fact, since Harry spent time to both niche down his offering AND study his market, he’s much more likely than Joe to sell his product because Joe just went with his gut.
This is a proven method too (see past posts we’ve run featuring entrepreneurs like Luisa Zhou, GrowthLab CEO Ramit Sethi, and Clarissa Grace). Many have used market analysis to launch businesses and build products worth anywhere between six and seven figures.
This is the importance of a good market analysis.
But what does a good market analysis look like? What’s a solid market analysis template I can follow? Will I look cool if I say “market analysis” casually at parties?
(Yes. The answer is yes.)
Let’s dive into a few of the other questions now to see what makes up a good market analysis template — and whether or not you need one.
What is a market analysis?
A market analysis is all about one thing: Mitigating risk.
The risk of your product not selling. The risk of your business not appealing to anyone. The risk of investing a ton of time and energy into a blog/newsletter only to have no one read.
That’s because a market analysis takes an in-depth look at two questions:
- Who is my market?
- Will my market pay for my business?
By taking a look at those two questions, you’ll be able to uncover a TON of insights about your business that’ll help you down the road when it comes time to do things like:
- Creating new products
- Writing blog posts
- Creating email funnels
- Growing your audience
- Increasing traffic
Here at the ‘Lab, we call this the “Immersion Strategy.” It’s our method of getting to know your customers better than they know themselves.
Doing so makes everything in your business easier:
- You’ll know what products will sell with your customers.
- You’ll know exactly what to write when you sit down to create a blog post.
- You’ll know what sites to guest post on in order to grow your audience.
And the Immersion Strategy is behind any good market analysis template — which brings us to …
Market analysis template: 5 questions to ask yourself
There are five big questions you should be asking yourself if you want to use the Immersion Strategy as a framework for your market analysis template:
- Who am I going to reach?
- Where am I going to find them?
- What problems are they facing?
- What solutions can I offer them?
- What product can I create?
Let’s walk through each question and see how you can answer them.
1. Who am I going to reach?
So you have your potential product/business idea. Now you need to know who your customers might be.
At this point, you need to be very specific about exactly who your potential audience is.
For example, if you want to start an online fitness business, you could target:
- 20-something men who want to run a marathon in a year.
- College women who want to lift weights to grow their muscles.
- Elderly people who want to lower their blood pressure by walking.
These examples might seem hyper-specific, but they’re actually great business ideas.
We call this “niching down your target market.” It’s easy to think that you’ll reach more people if you keep your business general, you’ll attract a wider audience — when the opposite is true.
When you niche down your role, you’ll be able to focus on and attract your target market … with the added benefit of charging a premium price for your service/product.
So ask yourself, “Who is my customer?” and get very specific with it. Write down at least five potential customers who might be interested in your business before moving on to the next question …
2. Where am I going to find them?
Where you find clients is going to differ from business to business.
After all, the copywriter for SaaS businesses is going to find clients in a completely different place than the charisma coach for anxious CEOs.
To find your “fishing hole,” the ‘Lab offers this tried-and-true method: Go to where your customers live and talk to them.
We’re not talking about their homes, you creep. We’re talking about the places online and in real life where your clients might hang out.
- Facebook groups
- Quora forums
Friend of the ‘Lab and seven-figure entrepreneur Luisa Zhou did this to help grow her business:
“I started spending all my free time hanging out where my potential clients were online (free Facebook groups) and directly engaging with them by sharing valuable content and answering any questions I could about advertising.”
Don’t sleep on this. Consider where your readers “live” and start getting involved with those communities.
Found a subreddit about people who need to sharpen their camera skills — and you have a photography business? Jump in and start helping out the newbies.
Found a bodybuilding forum and you have a business focused on getting bodybuilders competition ready? Start answering questions and helping the contributors.
Answer questions that they might have. Engage in their conversations and communities at large.
You’re going to learn a TON of insights from your audience by doing so.
Those insights are going to come in handy for the next question…
3. What problems are they facing?
We like to refer to this as your customers’ “burning pain” — and it’s the kind antibiotics won’t cure.
There are three areas that’ll help you identify your customers’ burning pain:
- Hopes and dreams. Your customers’ goals. What is it they want the most? How can you help them achieve it?
- Pains and fears. This is what your customers want to avoid no matter what. What are they afraid of? What scares them?
- Barriers and uncertainties. The things in the way of your customers’ goals. What are they tired of? What’s stopping them from their desires?
This is going to lay out the framework for your Customer Desire Map — aka the heart of the market analysis template.
As you collect these insights, write down the exact things you hear from your audience. This will give you an in-depth look into their psyche and give you the exact language you need to speak to them.
I mean this literally. We’ve used exact quotations from our audience in our emails, blog posts, and product copy — and it’s worked wonders.
We once had a reader tell us, “Everyone keeps telling me to follow my passion, but I don’t know what my passion is!”
When we saw that, we thought, “That’s a great insight. I wonder if it’ll resonate with more readers …”
We used that exact quote for our Dream Job course, and it helped us sell more than seven figures in profit from it.
So collect as many of these nuggets and insights as you can. Then move on to the next question…
4. What solutions can I offer them?
We’ve answered the who, what, and where. This is now the how stage.
These are the crunchy tactics and solutions that’ll give your audience an immediate benefit — and it’s arguably the hardest question to answer. Some examples:
- Use this script to get your ATM fee waived
- Here’s a template for writing a remarkable blog post
- The seven tools you need to build a money-generating funnel
It might take you more than a few days to come up with some good solutions, since it takes a lot of introspection. Our advice? Find the x in this sentence: “This is how you do x.”
- This is how you find single men to go on dates with
- This is how you double your bicep size in a single semester of college
- This is how you do a five-minute plank by the end of the month
The solutions you come up with aren’t going to be your product either. These are actually things you’re going to give your audience for free via blog posts, YouTube videos, emails, whatever.
Why? Two things:
First, you’ll be able to see which tactics and solutions resonate with your readers and which don’t. This gives you even more insight into what your customers want — which will help when you create a product (more on this in a bit).
Secondly, you’ll become an authority. As a new entrepreneur, you’re trying to build goodwill and reputation right now. You want to show your prospective customers that you’re someone who can be trusted and an authority on whatever your industry is.
Once you’ve done that, you’ll have an implicit invitation to create a product that your audience will happily pay for.
Which brings us to …
5. What product can I create?
Once you’ve established yourself as an authority, you can maximize the goodwill your audience has toward you by creating and selling a high-quality product.
This can be anything that helps address the burning pains of your audience and prospective customers.
And the options are practically limitless here. Let’s stick with the fitness entrepreneur example. You might create:
- A basic weightlifting e-book ($29)
- A short video course on powerlifting ($199)
- A live 1:1 teardown on lifting form on Skype ($299)
- A premium course on becoming a professional powerlifter ($999)
- A weekend-long workshop on strength training ($3,000)
Write down at least five products or services you can offer your prospective customer. Pro tip: Don’t worry about price right now. At this stage, the point is to think bigger than just an e-book or course. This will help you see the different ways you can help your prospective customers.
If you need more help with your market research, be sure to check out our resources below.
- How a $100,000 sales page is made
- Why it took me six months to find my business idea
- Exactly how Ramit does market research
Also, here’s our 30-minute video to show you exactly how we conduct market analysis for all of our products.
What do I do with it now?
So you’ve answered the five questions — great job! Now you have a much better idea of who your market is and how you can cater to them.
If you want to take your market analysis template to the next level, I have something for you: An exclusive five-page guide to finding a profitable idea.
This VIP material includes three masterclass videos from our CEO Ramit on finding ideas that resonate and creating customers for life.
This is backed by more than a decade of research and experience in building two brands, creating hundreds of thousands of customers, and generating millions in profit.
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