8. Market Research is Not as Hard as You Think

IMG_1969The phrase “market research” sometimes makes people a bit nervous. There is a whole industry dedicated to conducting market research, using all kinds of scientifically designed polls and focus groups to gather information about specific industries and markets. When you say “market research,” small business owners may picture expensive consultants conducting interviews to provide a report which may or may not turn out to be helpful (New Coke, anyone?)

At the office, I used to work with someone who used say that what the company needed was more market research — “You should get more research.” I think he secretly thought that you went to a site called marketresearch.com and got all the information you needed; and he would be partially right — there is a specialized search engine at that web address that you can use to purchase marketing reports, but those reports are usually broad and the price on them can be cost-prohibitive for a small business.

For example, since Hubby and I talk about retiring and opening an ice cream shop one day, I did a search on “ice cream customers.” I received information about several reports on the US ice cream market, such as:

  • Ice Cream and Frozen Desserts in the United States: Opportunities in the Retail and Foodservice Markets – starting at $3995
  • Market Focus: Trends and Developments in the Ice Cream Sector in the US – starting at $1312

I suspect that neither of those reports would be helpful to someone opening a small shop at the Jersey shore; and the cost is pretty high. For a large business, $3995 is barely a blip in their advertising budget. For a small business, $3995 might be their entire annual marketing budget.

BUT I would also contend that small businesses are in a much better position to both gather and use their own market research. I am not suggesting that you immediately launch a whole separate project (and carve resources out of your schedule and budget) to conduct polls and focus groups. Rather, I would suggest that you start with small ways to integrate your market research into the activities you already conduct in your business.

Research can be conducted in two large audiences: those who are current customers, and those who are not. Real-time market research can be gathered from current customers at any customer touchpoint. Think about all the ways you interact with your customers and how you might turn those into a dialogue. Two of my favorites are:

  • When they shop in your store (products) OR when you do the work (services)
  • When they check out at the register (products) OR when you send them an invoice (services)

You can gather market research at these touchpoints by doing one very simple thing: asking.  Customers like to be asked how they feel about a product or service — people like to share their opinions (that’s why Amazon and other shopping sites are full of feedback).

Asking in person is always more effective than asking on paper, so it stands to reason that the people best able to gather your research are the people who are directly in contact with the customer: your employees. This requires three steps:

  1. Your employees ask the customers open-ended questions: What do you think of the new products? What do you like about this product/service? If we could add one thing to our products/services, what should it be? What would make your friends shop here? Making the questions open-ended will get you more information, so be sure to emphasize that the questions need to evoke “essay answers.”
  2. You give your employees a way to pass the information back to you. It doesn’t matter if you do it by having them write it down in formal reports, or if you just have a simple daily stand-up meeting — heck, it might even be effective to put up a bulletin board in the employee area where they can post them for all the employees to see.  The point is: if you don’t give them a way to pass it back, they won’t remember to do it.
  3. You reward your employees for passing along the feedback. This feedback can have a direct positive impact on your business, influencing your strategic buying or hiring decisions. You will get the behaviors you reward, so be sure to reward this one.

As for gathering research from folks who are not currently customers: this might require a more concerted project. The most difficult part is gaining access to the appropriate audience to ask. I would tap your local chamber of commerce (you are a member, right?) for help with polling their members or conducting a targeted focus group. You might even find that they have members who are practiced in market research and are willing to offer a discount on services to a fellow member.

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