There’s no limit to how much you could spend to study your small business’s market. But with a little ingenuity and savvy, you can learn what you need to know at bargain rates.
When done well, even inexpensive market research can systematically bring you detailed and valuable information about your customers, your competition, and your business environment.
Here are some suggestions to help you get started:
1. Use Government Resources and Research Tools
Local, state, and federal agencies — along with industry organizations — collect and disseminate reams of helpful information. These no-cost resources, often available online or at libraries that employ reference librarians to help you sift through them, include telephone books, U.S. Census Bureau reports and other federal publications, trade reports, and the like. The SBA offers a free online tool called SizeUp, which caters to small enterprises conducting market research.
Without spending a penny, you can uncover a great deal of information about potential customers, your competition, and the business environment in any geographical region nationwide. This data can include patterns of income and spending, ages and household demographics, and many other relevant characteristics.
2. Convene a Focus Group
Gathering a group of likely prospects for an hour or two gives you a chance to ask in-depth questions and learn people’s opinions, motivations, habits, preferences, and other information on which you may base changes to improve your offerings.
Compared with other types of market research, focus groups are somewhat complicated to organize and run. They also can cost more than other forms of market research, too, particularly if you enlist a top-notch facilitator. But they can yield in-depth information of immense value.
You can also save money if you ask for bids from several good facilitators, and compare fixed-price offers against hourly ones. To save money, view the session yourself and take good notes, so you can ask for only a less-expensive summary report on the group’s results.
3. Conduct Surveys
Well-crafted surveys can also yield valuable information without breaking the bank. When conducting formal surveys, you can target people at random (potential customers) in a particular area or concentrate on current and/or past customers. To make sure the research data will be useful, choose
a representative sample of the customers and prospects you’re targeting.
Your survey should include questions such as:
- How interested are you in our products/services?
- What features are most important to you?
- How much would you pay for them?
- How often do you purchase them?
Try to phrase your questions without loading them one way or another to skew the answers. For example: “Would you prefer to buy the quart size or the gallon size?” is neutral. “Would you prefer to buy the convenient quart size or the bulkier, heavier gallon size?” is loaded.
Answers to basic demographics questions like age, gender, marital status, household income, educational level, and so forth are important in every survey. They let you calculate how accurately the survey results reflect the thoughts and feelings of the prospects you’re trying to reach and convert into customers.
You can conduct formal surveys by telephone, by mail, or online (using a tool like SurveyMonkey). How much they cost depends on the size of your sample and the method you choose. When budgeting, you’ll want to factor in any long-distance phone charges and time spent recording verbal answers; the prices of return postage or post cards; and any fees associated with the size of your online survey.