How to Conduct Market Research

Analysing and Researching Customers and Competitors

Research is a vital skill for small businesses. It is a stage before starting the business. Wouldn’t it be great to see yourself as others see you? You can for your business – using research.

You can use research techniques for lots of things, including;

1. Identifying what makes people buy from your business

2. Gaining a clear picture of your target audience

3. Finding out what your competitors are doing.

If any of these are important to you then there are a number of research techniques you can use to help you do it.

Surveys

A survey allows you to find out the views of a large number of individuals. One simple way to do it is to set up an online survey. Visitors to your web site can be presented with a pop-up box inviting them to take part in the survey. Results can then be gathered to provide a picture of what visitors think about something. You could also email your customer database with a link asking them to compete the survey, which is also a useful way of keeping in touch with them.

Alternatively, you could mail or telephone customers.

Market research surveys are a great way to get information quickly. They can help identify what customers think of products, company and service levels as well as providing comparisons. Now you can know whether they would prefer your product in red or blue without the time and expense of producing both and waiting for sales.

Types of Surveys

Online, mail or telephone are the main methods available, unless you commission a market research agency to carry out what is known as field or primary research. This is the market research most people are familiar with, from being stopped in the street by someone with a clipboard.All surveys allow you to find out the views of a large number of individuals. The more individuals researched, the more reliable will be the results.If you use telephone or mail, you’ll need to factor in the time and costs of contacting each and every single person in your list, whereas with online you can set it up practically the same day as you decide to do it and then do nothing else until you get the results.

Online Surveys

Visitors to your web site can be presented with a pop-up box inviting them to take part in the survey. Results can then be gathered to provide a picture of what visitors think about something. You could also email your customer database with a link asking them to complete the survey, or include it as part of a regular newsletter.The downside with online surveys is that only those with Internet access can take part. Unfortunately, many businesses don’t operate that way, e.g. builders, plumbers, electricians etc. Even car garages or other workshops are unlikely to spend long periods on a computer.

In-depth research

The disadvantage of surveys is that they only give you a statement of how someone feel at a particular moment of time, but not why they feel that way. For that, you need in-depth research in the form of individual interviews or focus groups.You don’t need many people to take part, you’ll probably find that in-depth interviews with 5-10 people or 2-3 focus groups with 6-10 people in each will give you enough information. Use a framework covering the areas you want to investigate and then allow the respondents to talk freely. They should tell you things that you never even considered. If they say something that interests you further, investigate it by asking additional questions.

What Is In-depth Research?

There are two main types;

1. Interviews of one to two hours' duration with an individual where you probe, question and discuss areas of interest.

2. Focus Groups which involve a number of people in a room discussing areas of interest with a moderator, i.e. someone who can direct the conversation and ensure it stays within the topics.

Focus groups have the advantage of people feeding off each other. Sometimes discussing something can create new streams of thought or you can gauge general levels of interest. Their major downside is that they can be dominated by ‘group-think’, or opinionated individuals dominating proceedings and not allowing a free exchange of ideas. Individual interviews get around this.

How Many People?

Not many, you’ll probably find that interviewing 5 to 10 individuals or 2 to 3 focus groups with 6 to 10 people in each will give you enough information.If you’re wondering who to approach for this type of exercise then look at your own customer database. You’ll find that most people will be willing to give you an hour or so of their time to help you out. You might want to give them some kind of incentive though, either by paying them for their time or making a donation to charity.Using a market research agency can be useful if you want to investigate a larger group or to conduct the exercise if you don’t have time.

Techniques

Use a framework covering the areas you want to investigate and then allow the respondents to talk freely. They should tell you things you never even considered. If they say something that interests you, investigate it further by asking them additional questions.

Be creative in your use of techniques. For example;

1. Ask the respondents; “if this product were a car (or food, or a famous brand), which would it be?” You’ll then know if it has a low cost image, or quality, or a good all-round, reliable offering.

2. Give the respondents a number of photographs and ask them to choose which they think most closely represents the benefits offered by the product. So if they choose pictures of people relaxing on holiday, it would be something pleasant to help you relax. If it were busy people in the office looking confused, then they think the product is probably confusing or not simple to use.

Secondary Research

Many companies produce market research reports on particular market sectors. Although expensive, they can give you invaluable insights into developments in your market and your place in it. They can provide indications on market shares and how the market may be changing, including new products, new entrants and predictions of future developments.