How Marketing Research Can Benefit A Small Business

Default-Image-23

Editor’s Note: We are pleased to bring you this guest column by Joy Levin on the topic of market research, as a companion guide to the small business market research we conduct and make available here at Small Business Trends. Joy sheds light on the different types of research, how to get it and how to use it.

By Joy Levin

Small businesses often find themselves in a challenging situation. These businesses have a great need for reliable answers to important questions that all organizations face:

  • How are market trends impacting my business?
  • How does our target market make buying decisions?
  • What is our market share and how can we increase it?
  • How does customer satisfaction with our products or services measure up to that of the competition?
  • How will our existing customers respond to a new product or service?
  • How can we attract new customer segments?
  • What marketing strategies will work best?

In order to get answers to these questions, companies conduct marketing research using a variety of methods. This article will outline some of these methods and illustrate how they can benefit a small business. All have some value, but it is important to know the limitations of each technique.

I. SECONDARY RESEARCH

This type of research involves looking at information that has already been conducted and published, by exploring a few different types of resources:

1. Demographics and Statistics

This information can be helpful to businesses when trying to learn more about the geographic areas in which they operate, or those into which it would make sense to expand. Where are other people like my current customers? Where are there people who are a little different from my customer base but might find my product valuable? I’m introducing a new product to an entirely new market — where do these prospects live? Is the size of the potential market big enough to make the investment into a new product worthwhile?

Similarly, this type of research, called statistical profiling, also benefits business to business marketers. For example, if you are selling to businesses locally, you can expand your base by finding other areas where there is a high concentration of similar businesses. Or, you may have been selling to one type of industry, but you think companies in a different industry will also buy your product.

Here are some free online resources that can help you find these businesses and get relevant statistics:

Bureau of Labor Statistics
Internet Public Library
Fed Stats
American Marketing Association – Demographic Statistics
Demographic data by zip code for every U.S. state

2. Existing Research Reports

Often, businesses have questions that involve trends in their markets. For example, which customers are adapting the lastest technology? How is internet usage changing among mature adults?

There may already be a report that was conducted that can give you some general information into your industry and specific market. By doing a search on “online research reports,” you can find a listing of companies that provide these reports. Usually they do come at a cost, but may be less expensive than doing a study from scratch. A good idea is to first peruse the table of contents that often comes with these reports before buying, in order to get an idea as to whether the purchase would be justified.

3. Marketing Researcher tools

      Why not go where the pros do? By utilizing these sites, you can ask questions of marketing professionals and use the tools they do. There are some excellent resources available, again some of which require a fee, but others do not.

Marketing Sherpa
@ResearchInfo.com
MarketingProfs.com

 

II. PRIMARY RESEARCH

At some point, all businesses need to ask specific questions of their customers, as well as those individuals who are not their customers, in order to make decisions regarding their business and marketing strategy. This is where research can get expensive, though. Many small businesses do not have resources required for studies that deliver the most unbiased, accurate data. However, there are ways that companies can get guidance and direction for marketing strategy, based on customer feedback.

1. Talk to Your Customers

Is there any more direct, less expensive way to go? Ask your customers questions when they purchase from you, if you can do so in a way that is not cumbersome for them and doesn’t take a lot of their time. What made them purchase from you? How did they hear about you?

Make it worth their time to give you feedback — perhaps a discount on their next order. And let them know that their feedback will help you serve them better in the future — which it should. And many small businesses overlook or discount input from their direct salesforce, a resource that can generate some of the best ideas for new products due to close customer contact.

2. Web Logs or Blogs

This is a great way to get customer feedback. Start a blog on your company website, tell your customers about it, and post information about your products and services. I know what you’re thinking, though – what if my customers have negative reactions about what I post? Won’t my warts be available for all to see?

Marketing diva, Toby Bloomberg, recently had a post on her own blog about just this issue. As she points out, your customers talk anyway — isn’t it better to see what they’re saying so you can respond? And Toby makes a great point — negative comments are an excellent way of showing how you respond to customer concerns.

3. Yahoo Groups

Start a group for your customers. This is a great way for them to talk to each other and exchange information. At the same time, you get to see what they’re saying without them necessarily knowing that you’re peeking.

Additionally, some customers can start conversations that allow you to get insights into their interests — more valuable information that can help you in your product/service development efforts. These groups can also exchange tips about using the product or service – some which may have never occurred to you.

4. In-person forums/ conferences

This is a great way to educate and entertain your customers and provide them value for their attendance at an offline function. While the methods above can often limit the amount of information you get from your customers, these forums and conferences allow you to explore various issues in a more in-depth way.

User conferences also can give you a great opportunity to introduce your customers to new uses for your product or service, by highlighting customer success stories and case studies for presentation.

However, as noted above, these resources usually do not provide completely accurate and unbiased information, and to get this type of customer data, you’ll need to use more structured and traditional methods. Unbiased, quantifiable information can be very powerful in planning your marketing strategy. And every successful business needs to, and will get to this stage at some point. The trick is not to wait very long, because your competitors can start getting the answers before you do.

In general, there are two main types of traditional primary research studies, each with its own benefits:

5. Qualitative

These studies, also often called exploratory research, allow you to research issues with customers in an in-depth manner. While qualitative studies usually aren’t designed to give you precise answers, they can give you great insight into the behavior of your customers, their rationale for making decisions, and factors that can motivate them to purchase.

There are various forms of qualitative studies, including focus groups, one-on-one interviews, and newer techniques called ethnography. What sets these apart from the user conferences mentioned above, are several factors:

  • They are typically led by an objective moderator, so participants often will provide more honest and less biased feedback.
  • A trained professional can also handle different types of respondents, from those who tend to be very vocal to those who are less likely to speak.
  • They are in a controlled setting, and the moderator has a pre-defined script so that the most important issues at hand are addressed.
  • A variety of techniques can be used, in order to get at the thinking behind customer discussions and behavior.
  • These studies can be done both on the internet and in person. A qualified professional can help you to determine the right method to use, and the costs for your particular situation.

6. Quantitative

Often businesses need guidance on a set of marketing issues that require clearly defined measures, for example, advertising spending, distribution channel usage, pricing decisions, segmentation sizes, and the product or service message that should be launched first.

Surveys and questionnaires can give you a great deal of accuracy when asking marketing questions that require this level of detail for sound decision-making. For example, which product will generate the highest level of interest? Are there differences between different segments and how are these differences are best defined? What price should you set? How often will people purchase? There are some great online tools you can use to develop your own surveys — here are just a few that offer free versions:

Survey Monkey
Zoomerang
Cool Surveys

However, it is important to note that according to the Small Business Administration website, much primary research, particularly “… surveys, interviews, and questionnaires, is best left to marketing professionals, as they can usually get more objective and sophisticated results.”

CONCLUSION

Every organization needs to conduct research, and small budgets are no excuse for lack of a research plan. By starting out with some easily accessible resources, you can begin to develop better marketing strategies that can position you for market growth.

About the Author: Joy Levin is the President of Allium Research and Analytics, a marketing research consulting firm. With 14 years of experience, she works with companies of all sizes in various industries to develop and implement research solutions that give them answers to their marketing challenges and provide strategic direction.

8 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

8 Reactions

  1. This is a well-written article on the value of research by small business owners. One of the fascinating things about this research is that how much information is available and the author presented a number of excellent sources, Small business owners have tremendous advantages to use this information. Small business owners are nimble, and can be decisive to make valuable changes to get the most out of the new trends discovered in the research encouraged by the writer.

    Bigger businesses (read corporations) have committees, politics and many other large obstacles to adjusting to new trends, And when they finally do adjust it takes lots of time and effort to do so. By then nimble small business owners will be adjusting to the newer trends the corporations have pointed out themselves in the research they paid for.

    Keeping in touch with the trends can be very profitable and fun.

  2. As posted, it can be noticed that there are several ways to gather data for use in a businesses marketing procedures. From using the demographics and zeroing in on the target market, their are various useful forms to attain useful data.

    Now as far as gathering the research information, and now focusing on group studies, one must remember that the consumer can have various New ideas for creating a better product, and that can be extremely useful to the improvement of an existing idea. How? The consumer is the end user who will undoubtably know what he or she wants in the product. And that is very important as this creates a better product, which in turn will satisfy the end user and benefit the businesses that provide the items.

    So in conclusion, talking with the consumers and having the all the right questions to ask them is a key factor. If you don’t know what to ask, it is probably better to hire a company that focuses on this speciality research. They will be able to provide better results for a business.

    Ivan

  3. Very helpful article for small business owners especially the first time entrepreneurs. It’s scary to discover how much one might miss without proper market research.

    Thanks
    Indu

  4. A prime example of the power of marketing research *and* the internet is that while this post may be 2 1/2 years old, but it’s still relevant – and a great *find* for me this morning. Thanks.

  5. [...]http://smallbiztrends.com/2006/01/how-marketing-research-can-benefit-a-small-business.html[...]

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>



Who influences you? Nominate for the 2014 Small Business Influencer Awards.