Conducting Market Research for Small Businesses

Gaining an understanding of your customers' preferences is one of the first steps to running a successful business. Market research can provide valuable insight into what people like and dislike, their expectations and how satisfied they feel by your competitors. This information, used in conjunction with your small business software, can help you gain a competitive edge.

Benefits to market research

Feedback. Many times, if a customer is unhappy with a product or service, they look elsewhere. They may tell their family or friends about their experience, but they rarely give feedback to the business itself unless prompted. Conducting market research can help address this issue by giving people a forum for airing complaints and making suggestions.

Targeted marketing. If you have ever wondered how to effectively communicate with your customers, market research can provide some starting points. The information gathered can tell you where potential customers live, where they shop and how they prefer to do business. Use your findings to create targeted marketing campaigns that really hit their mark.

Opportunities and risks. Gathering information about your sector can give you insight about any unexploited opportunities or potential hazards. For example, if a particular zip code already boasts a dozen hair salons, is it wise to expand in that location? Or, would your organic food business be better placed to take advantage of market demand if it were modified to be an organic baby food business?

Measuring progress. A growing business that wants to succeed is wise to set goals for itself. Market research assists you in tracking progress on these objectives, using your small business software. Whether you aim to attract a larger share of a certain demographic or change your focus altogether, this is a great way to see how you're doing.

Secondary market research

There are two types of market research - primary and secondary. Secondary research effectively involves reading and analyzing data and statistics compiled by others.

For example, looking at demographic information can help you discover where your customers live and work. If you are a B2B business, you could investigate where the types of companies you sell to are located, in order to open up the customer base you serve. You can use your small business software to target these companies.

You can also read reports on trends that have already been compiled for your market. For example, if you sell vitamins to seniors, you may be interested in how older people view and use the internet. Or you might want to find the average amount spend by other small businesses on search engine marketing.

Primary market research

Primary market research involves going directly to the customer to collect data, usually in the form of surveys or focus groups. You can use your small business software to assimilate what you've learned and determine next steps.

Surveys. You can conduct surveys online, by phone and through the mail. These days, small businesses may find the first option most attractive. Why? It is less expensive, less time-consuming and can allow you to reach a wider base of respondents. There are a number of online services that can help you design and distribute your survey for free.

When creating your questionnaire, first consider exactly what you are trying to learn. Are you trying to gather a general idea of what people are looking for or addressing a specific problem or concern?

It is also important to think about how you word the questions in your survey. For instance, you could offer a range of choices to answer a question about satisfaction levels, and then include some extra space for further comments.

Also, take care to ensure you haven't phrased questions in a way that leans in favor of a particular answer. For example, asking people to select the product that most appeals to them from a list may elicit more useful results than asking them whether or not they like a particular product.

Focus groups. Focus groups can help you gather a large amount of information from a group of people at one time, as well as follow up on their answers. This a great way to get people to try out your product and provide immediate feedback, via a written or verbal survey.

To prepare for a focus group, make sure you have a convenient venue and have allotted sufficient time to arrange for a number of participants to gather on a particular day. A convenient way to run a focus group, which may also be less costly, is to solicit opinions from people you already know. Just make sure the group represents your target market.

In conclusion, however you choose to collect market information, you are likely to find it to be a valuable business tool. Market research can help you determine the next step for your business strategy.