Most inventors are convinced they have "the next big thing" -– but how do you really find out? Sales data certainly helps, when it's available. Without it, we rely on Market Research.
Market research is generally characterized as either secondary or primary. Secondary research gathers information mainly from publications and databases (secondary sources). It tends to reveal insights
about the market (industry size, significant trends, competitive activity, etc.). Primary research, on the other hand, gathers feedback directly from individuals, via focus groups and surveys (primary sources). Surveys can be particularly valuable for invention ideas—when you ask the right questions, the right way, to the right audience.
To support an invention idea, some inventors proudly report that their friends and family like it. While that’s encouraging for inventors, it’s not very helpful for the companies. Companies want to see feedback from individuals who are not just independent (they don’t know you), but also representative of the marketplace (reflect the target buyer’s age, gender, income, etc.). In addition, companies want a quantity of respondents (“sample size”) that is large enough to provide stable results (meaning that adding a few more respondents won’t change the results much). A number of variables can dictate the appropriate sample size, such as the amount of market or product segmentation you’re planning, but 300 survey respondents is typically a large enough sample from which you can derive meaningful data.
When working with invention promotion companies, you will find that few companies offer this service to inventors for fear of negative responses that could discourage inventors from purchasing their other services. And surprisingly, most inventors don’t seek such services – normally because they’re already sure that everyone will want to buy their product.
In addition to offering this type of research as a service, AbsolutelyNew uses the same type of research for our own products. And because of the volume of research we conduct, we are able to provide this service very cost-effectively.
Whether we’re conducting the research for our clients’ products or for our own products, our questions typically gather the following information (in addition to other basic data, like demographics):
- Demand. Likelihood of purchasing the invention.
- Distribution. Retailers they envision selling it.
- Preferences. What features they like and dislike.
- Price. Expected price points.
Typically report results are in a standardized “dashboard” format, for efficient analysis and comparison to other products in our portfolio (as shown above). But how do you know if your results are good? More specifically, how would you translate these results into a financial forecast?
Well, there’s a relatively easy way to get a rough estimate. If the survey sample is representative of the target market, and you know the size of the target market, then you could estimate the total demand. For example, if 5% of the respondents said they’d definitely buy the invention, and the respondents are representative of the U.S. population (~300 million people), that equals about 15 million customers.
Of course, there are many factors that impact the accuracy of that forecast – ranging from the projected distribution of the product to the price. Although unit sales tend to rise with lower prices, total revenue could rise or fall with price changes, depending upon what economists call “the elasticity of demand”.
Companies like AbsolutelyNew, with well-trained research professionals, can help you plan and execute consumer surveys, and make sense of the results. The bottom line: research that assesses demand for your inventions can help you both save and make money.