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No Better Time For Market Research

Wednesday, November 17, 2010   By Mike Reddy

 



Stop trying to guess what your clients are thinking. Before investing in gut feelings or past remedies, find out what your customers – and ex-customers – want. Just ask. It’s existing clients who offer the most potential for growth, and at the lowest cost. Talking to them is a good way to further develop or to start a customer relationship management programme.

Market research will enhance the informal feedback you gather every day and could prevent you from making costly planning mistakes. No longer just for the big corporations, small and medium businesses usually know their customers well enough to do their own primary research – information direct from the source – on a scale that can still reap effective results.

Here are some tips on structuring do-it-yourself market research:

1. Many ways to get in touch
A direct mail campaign is the ideal method to survey customers, if your budget permits. Or, email or internet surveys are good options. If you have time, but no budget, consider including questionnaires with invoices or statements, or with direct mail campaigns already budgeted in the marketing pipeline. For the personal touch, sales consultants could distribute printed surveys on client visits or do them by phone.

2. Design for answers that give direction
Prune any questions that don’t directly contribute to collecting and analysing information for making business decisions. If possible, design questionnaires with a single purpose, such as feedback on customer satisfaction or to test interest in a proposed new service. If seeking opinions on a few different topics, divide the survey into clear sections.

3. Plan for easy analysis
A plan for measuring results with uniformity is the first priority. Multiple-choice is popular because it’s easy to both answer and analyse, but you must accommodate all responses, including “don’t know” or “other”. A ranked answer system should include no more than five items for assessment because it becomes difficult to order preferences the more items are listed, making the answers less reliable.

4. Style for accuracy
Questions should follow each other with smooth transition. Watch the tone doesn’t pre-suppose a position or assume the respondent has particular information at hand, such as budget percentages, financial details or past purchasing statistics. Avoid vague terms like “most” and “least”, as everyone’s perspective is different.

5. Ask single focused questions
Each reply should be about one topic. Seeking a “yes” or “no” to “do you like our colour and size range?” won’t work if you need to know whether your size range in particular is on target with buyers. Short questions save people’s reading time and also prevent you inadvertently biasing answers or creating confusion through over-explanation.

6. Seek truthful answers
Anonymous versus identified participation will affect the honesty of replies. Some loyal clients might simply not want to hurt your feelings by expressing their legitimate complaints; others may hesitate to answer about spending intentions and prefer to under-estimate in fear of sales pressure. In general, make sure your questions are non-threatening and make privacy policies clear if seeking special details.

7. Keep it brief
One page is the best length for a written questionnaire, and a ten-minute commitment is ideal. Any longer and respondents might set the task aside or give less thought to their answers.

8. Consider incentives
Even token rewards are welcomed by survey respondents. Corporate gear featuring your logo is likely to be as effective as items with a high monetary value. For even better response rates, promise the gift on completion.  Tailor your ‘gift’ to the respondent. A CEO might require more than a free pen or movie tickets to be tempted to complete your questionnaire.

9. Cover letter essentials
Your personal introductory letter should be friendly, brief and persuasive. If there’s no tangible incentive to participate, appeal to their business integrity with your willingness to listen, particularly if you are looking for suggestions on how to keep your business growing in slow times. Include how long the questionnaire will take to complete to increase response rates, particularly if it’s genuinely in the five- to ten-minute range.

10. Edit for variety
Change the question style throughout the survey to keep it lively. If 20 questions start with “do you think ...” the respondent might develop a rut of responses to match. Be creative in the writing style to keep the reader’s attention.

11. Ask why
It’s the most powerful question of all. Many respondents will be keen to elaborate on their opinions and their qualitative responses could prove to be highly valuable. Even complaints are important opportunities for business improvement, so make it clear that further comments are welcome. Provide a place to include it on the survey or an email address for sending additional feedback.


Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.