Best indicators in market research?

[FormerWageSlave]

I am new here and for the past two weeks I have been looking through this forum and scouring the net for the best methodology on testing your muse. Tim's suggestion regarding PPC/Adwords testing is reinforced in many places on the 'net as the way to go, but I am finding incomplete info on just what it is that tells you that you have a decent shot at being successful. For instance, this post (http://writetoright.com/2008/09/24/how-to-find-your-niche-for-an-online-business-opportunity/) recommends that your sweet spot for CPC is positions 4-6. While this guy (http://www.3arn.net/how-to-find-a-money-making-niche/) doesn't talk about that at all.

My questions are, what are the best indicators in the Keyword Tool that show you're on the right track with your niche/muse? Is it mainly search volume? How about competition? If there is little or no competition, then there might not be money in that niche, right? If the competition indicator is full, is that a red flag too?

If anyone has advice for me, it would be appreciated. Or if you can link me to a reliable source for a guide on this, that would be helpful too.

What else should I be considering?

Thanks in advance, fellow 4HWWers! :)

[kamakiri]

This is a crux that catches many many people. Many more fall into the analysis paralysis trap. Either way you look at it, google, ad words, and PPC are evolving daily. What worked for you last year will probably only be half as effective this year.

All of these guys selling 'the best' method are really just selling snake oil, because they all work. The secret is just picking one method and finding your 'sweet spot'. You will find that your results run about the same as the success of venture capital returns. One method will out produce the rest 5 to 1, 6 will be average, and 3 will be money losers.

You don't have to do 10 tests simultaneously (in fact, if you do it is a recipe for disaster), but constant attention to detail is necessary. Set a strict set of goals and parameters before the test. For example:


Spend $50 and strictly adhere to this budgeted amount
If you made $200 in sales(profits), then set this method on auto pilot and start testing a new method
If you lost money, then revise your method and try again
If you failed to generate profits after 3 revisions, dump the method
After you have 3-4 successful methods going on auto pilot, periodically go back and review/optimize your successful methods.


Knowing when to quit is more important than just about anything here, because 500 micro transactions feels a lot less painful that one big one.

In the second part you mention competition. You can have my tried and true favorite piece of advice: Never open a pizza shop in a town with no pizza shops, always open in a town with 10 pizza shops. The 22 Immutable Laws of Marketing states that you should be first to market, but the facts of business prove that to be false. The first burger stand was not Mac. Being the first PC maker, netbook maker, or cell phone maker sure didn't help anyone, and it will not help you. Competition is a good thing, and does prove a demand.

[FormerWageSlave]

If I am understanding you correctly, kamakiri, you are saying that I should set up a web page for my muse and run Adwords tests on what sells the most, yes?

Forgive me if I am misunderstanding your reply, but I think I am still one step behind that. I want to ensure that my muse is worth doing at all and I was under the impression that there were indicators in the market research that would tell me when I should move to the next step.

So, for example, say my muse will be reselling iPhone cases. By using the keywords tool, I put in various keyword combinations like iPhone cases, leather iPhone cases, protective iPhone cases, etc.

What should I be looking at in the data to decide whether a test site is worth the time? Search volume? Competition? Other factors?

Then let's say after looking at that, it looks promising. I set up a test site to sell my iPhone cases and run the steps you outline above to find what works best. Once I find that, I can go live and sell the product.

Are those roughly the steps involved?

Thank you.

[kamakiri]

You understood me perfectly, and you are not one step behind.

Not having a test site is one thousand steps behind. Quit wasting both of our time with that narrow minded thinking. You can have a site that beats 50% of the sites out there from a free template. you can have a sit that beats 90% of them for $300.

The only way to increase your success is to increase your rate of failure. Deciding if a test site is worth your time is pretty much below the threshold.

[FormerWageSlave]

I want to be a little more calculating than that. I want to feel good about my muse ideas before I spend time building out a site or even spending money on URLs.

Surely there are good niches to get into and there are bad niches to get into. I want to do my due diligence on every idea I have.

Thank you for your advice kamakari, I will take it under advisement.

If anyone out there has a muse testing methodology they would like to share, I'd appreciate it. Thanks!

[ccook029]

Hey FormerWageSlave,
I am in the same position that you are with the exception that I have decided to test my muse and have already purchased the URLs and am having a webpage design from Elance.

I am however finding myself overwhelmed with the amount of information from Google Adwords and really don't know exactly how to go about this. I am wondering if you/or anyone else has advice on anything relating to Google adwords. I know that might seem broad, but I have been reading google for a couple days and can't seem to get my head around everything.

Kamakiri, Are you recommending having a couple campaigns? I would like to set my budget at $10 per day for a 5 day test, but don't know how best to stretch my money to make the most of it using Adwords. Either way, I am going through with the test (I already have developped the content for the test site and it should be up in the next couple days), but I just want to make sure I'm not wasting my time and money. I understand that it's better to try and fail and then learn from your mistakes, but I'm trying to learn a bit more before wasting money and then trying again. Any advice or forums/blogs where I can find more advice would be great.
Thanks,

[Marcie]

Go to http://www.fourhourworkweek.com, click on resources>reader-only resources, log in, find the bonus chapter called "Muse Math". Read pages 2 and 3. I think it's safe to say that for a lot of products, the 1-2% conversion rate is more difficult to achieve in the current economic climate...which is why testing is so important. But I do think this is a good way to gauge interest prior to spending money.

(The overture tool is no longer available, I suggest replacing it with http://tools.seobook.com/keyword-tools/seobook even though their ads are annoying, you can get an "overall" search estimate and skip the extra math in step #1).

[ccook029]

Hey Marcie,
Thank you very much for those tips. I just used them to come up with my market.
I do have a question about something in Tim's bonus chapter - Muse Math... How do I know what the coversion rate will be for my different keywords. I have made a spreadsheet trying to calculate what my number of visitors from total volume per month and then for a group (8 Keyword), I used coversion rates of approximately 1.5% to come up with profit per month of only $1,600. This really doesn't seem like much, so I'm wondering if maybe there isn't as much of a market for my muse as I might have thought. I know I'm only using 8 keywords, but I just don't think it will grow that much with using a lot more.

My question is whether I am using too low(or high) of a conversion rate? I am assuming a click through rate (from total volume in google to get to my page) of 0.7% - 2% and a coversion (once on the site to buying) of 1.5% - 2%. Is this too high or too low? I am starting to think that my muse might not be out there cause there really isn't a market for it. This is starting to look a little dismal. I just want to make sure I'm not wasting my time and money testing (even though I am learning a lot in the process and I know that's invaluable).

Thanks,

Ps. sorry if I'm not using proper terminology, this is all very new to me.

[Marcie]

You're probably in the ball park but you really have to run a test to know for sure. But there are other people around here with more experience at this than I, feel free to chime in if you do...

[kamakiri]

Kamakiri, Are you recommending having a couple campaigns?

Absolutely! You wouldn't be testing things otherwise. Of course a bad shot is going to hit the target some times if he fires enough shots, and that is the same as testing only one thing at a time.

The real benefit comes from split testing different ads simultaneously. Then you are comparing apples to apples and can start to tweak your marketing. Read up on that subject, as it is pretty much applicable to any situation, and it is something that is pretty much unchanging, a rare piece of low hanging fruit on the web.

[ccook029]

Hey Kamakiri,
Thanks again for the advice. I will be researching the campaigns more and try to understand that again before asking more questions, but in doing my research, it doens't look like there is that big of a market out there for me (as mentioned above).

I have created a spreadsheet with approx 16 keywords. Using the daily number of searches for each (from SEO Book), I came up with an amount per month that would be searched on Google, so the ones that I can target. Using and average of 1.5% click through rate I'm only getting around 1,500 visitors per month and with a conversion rate around 1.5%, I'm only making profit of approximately $2,000 per month (and $1,300 is off one key word).

Does this seem within reason, and does this simply mean I need more keywords? Cause looking into my niche, there really aren't that many keywords that get a lot of hits (I've picked the top 12 that I can find). The product I am pushing is an instructional DVD that does have a market, I just don't know if they are necessarily internet savvy market. Either way, there is some demand out there, as evidenced by the 1,500 approx click through.

Just wondering if these numbers seem right. I was hoping for higher numbers, but maybe I'm pushing a market that isn't really the best.

Thanks again for all the helpful advice.

[kamakiri]

The next question that begs asking is what is your TMI? That will determine if $2000 a month is enough.

Either way, the process you will go though is invaluable. Doing this with one muse, makes muse #2 all the more easier to do, because if you are successful, others will be able to see it as well, and you will be copied.

The only guarantee, other than split testing producing good results, is that your sales will be eroded over time. The skills you gain are very translatable with the internet, and that is why failing is still winning in most cases, because you end up having spent some resources (time, money, or both) and gained knowledge that you can use over and over again.

[Marcie]

Either way, the process you will go though is invaluable. Doing this with one muse, makes muse #2 all the more easier to do, because if you are successful, others will be able to see it as well, and you will be copied.



Just wanted to highlight that, very true ;)

Thanks, Kam.

[ccook029]

Couldn't agree with you more. I am definitely going to go for it this time. I've already learned a lot and still have so much more to learn, but I know that this will be extremely benefitial afterwards.
Hopefully my muse works out, but if not, there will always be others!!

[Rossatron]

Google will allow you to test several ads at a time for no additional charge. check out Adwords as they have some new tools. This could help you a great deal in split testing.

[FormerWageSlave]

Marcie and Kamakari... thanks for your input and help with this. By combining your advice I think I have a good idea how to go about this phase of my project.

[FormerWageSlave]

Ok... actually I realize that I still have more questions...

What indicators point to a good niche? Obviously a lot of searches on a particular term, or set of related terms, are a good indicator, yes? But how about the competition indicator? If it's full, is that ok?

I guess what I would like to know is, when doing your initial research, keywords or otherwise, what are you looking for that tells you that you should proceed into the testing phase?

Thank you for your time.

[kamakiri]

If you have looked over some of my posts, you should have seen my favorite piece of advice. I repeat it like a broken record because it is so simple, yet easy to ignore. It is:

Never open a pizza shop in a town with no pizza shops. Always open in a town with 10 pizza shops.

Pizza shops are easy to open and at a cost of $100,000 for equipment, easy to finance. It is likely that every town on the earth at one point had a pizza shop, but the ones with no shops today are the ones that just don't eat pizza.

How does this apply to you? In many ways. Specifically, if there are a lot of people selling what you want to sell, then it will be easier to sell your product.

That being said, it is not all about the product. Anyone can make $10,000 a month by spending $20,000 on adwords.

In Japanese they have a phrase: Heta na teppou, kazu ucya ataru. In English that is: A person who is a bad shot with a gun, can compensate by firing many bullets. FYI: The original Japanese (sorry it took so long Tim) and some other interpretations are here. (http://home.alc.co.jp/db/owa/s_kaydic?num_in=398&ctg_in=3)

Basically you can get two things from that. First is that you will eventually stumble on your goal, but without a plan you will waste time and resources. A poor plan executed is far better than a great plan that is never acted on. The secret is in the action.