The term ‘market research’ often invokes images of telemarketers, focus groups and online surveys - mass media methods that cost a lot of time and money and are out of reach of the average small business. The truth is that small business owners conduct market research all the time. At its most basic, market research is asking someone other than an employee how they think the existing business is performing or whether a prospective product or service would appeal.
The most easily accessible respondents - friends and family - are the usual sounding board for business owners. Depending on how close these people are to the profile of your customers, friends and family can be a cheap way to get feedback - or they can give an inaccurate idea of how the market is likely to respond. Independent responses will give a truer picture.
Every business has a ready-made base for market research - its customers. Customers are often more than willing to tell a business whether their needs and expectations were met in the last transaction. Customer feedback can help fine tune your products, your service delivery or your overall business plan and strategy.
It’s important to note that a structured approach is more likely to deliver results that more closely match market behaviour. Offhand conversations with customers may give you interesting anecdotes, but a set list of questions can help you quantify the overall customer experience. Questions should reflect the goal of your research. Ask open-ended questions (called exploratory research) to get ideas about additional products or services your customers would like to buy from you. Ask specific questions to determine what exactly that product or service should look like.
Other sources of primary (or direct) research include suppliers, competitors and focus groups. The method of collecting data can vary from one-on-one interviews to phone surveys. The results can reveal trends through statistical analysis (called quantitative research) or provide more human anecdotes of a customer’s relationship to the business (qualitative research).
Secondary research looks at published information such as government reports and statistics to provide a broader context to your business. It can help identify competitors, establish benchmarks and identify target segments. However the data might be outdated and it certainly won’t be tailored to your business, which limits its relevance.
Finally, your website can provide a lot of data for market research at minimal or no cost. Google has free web analytics tools that will tell you where your website’s visitors have come from, how long they stayed and what they looked at. Market research is within the reach of a small business owner.