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You may think your customer is a 25-year-old third-shift worker, but what if instead, it’s a 45-year-old management executive with extra time and cash to spend? Sure, you may see the twentysomething hitting balls on your tee line, but there could be untapped profits in positioning your product to the well-heeled manager.
The only way you’ll know if you’re missing the mark is through market research. What? You did that when you opened your business five years ago? That’s great. But you need to do it again. In fact, every few years, you should be taking a good, hard look at your market to confirm your assumptions (or prove your suspicions) and fine-tune your product and price to meet demographic changes.
This type of market research doesn’t have to be as in-depth as your initial investigation, and it certainly doesn’t have to take a huge bite out of your budget.
The U.S. Census Bureau compiles all kinds of useful information, and much of it is available on the Internet. Here’s how you get to it:
 • Open your web browser and type in www.census.gov/main/www/cen2000.html.
• Click on American FactFinder for tables and maps of Census 2000 data drilled down to the block level.
• Type in the ZIP code you want data for—and ta-da!
This simple search will provide you with three primary types of demographic data:
• General market information: the number of male and female residents, median age, average family size and total housing units
• Social characteristics: education level and marital status
• Financial snapshot: median household income, median home value and number of single-family, owner-occupied homes.
Using these hard numbers, you can determine if your products are priced too low or too high for what the market will bear. For example, say there’s been an influx of affluent consumers who’ve taken up residence in your 10-mile market radius. You can capitalize on this income shift by bringing in products that appeal to these buyers. People with more discretionary income will look for places to spend money on themselves and their families, and they’ll often pay more for quality. Simple changes such as switching out your Folgers with Starbucks brand coffee and charging $1.50 per cup instead of the usual 50 cents can increase profits. Or, you can invest in better range balls or turn over your inventory more often to upgrade the perceived quality of your facility.
On the opposite end of the spectrum, if your facility is upscale but your market isn’t, you can downgrade the product offering, lowering your expenses, but still charge the same price.
Once you’ve done an internal analysis, the next step is to gather competitive intelligence. Knowing how other ranges fit into the same market can reveal unmet needs, giving you an obvious advantage.
Of course, demographic data is just a starting point. You’ll want to supplement what you learn from the government with your own assessment of the community. Just remember that although your location may have been ripe for a range five, 10 or 20 years ago, markets change. How you roll with those changes (or don’t) will ultimately determine whether your business succeeds or fails. |
