There are many ways to conduct market research, from administering simple surveys to commissioning elaborate data-gathering studies with the help of a market research firm. Choosing the right method for your business — and then weighing what you learn in the context of what you already know about your customers — can increase the likelihood that you’ll get results you can trust. “Data can be great, but being alert to trends and considering your own experiences is the edge most small businesses have,” Foege says.
There are market research methods to suit every budget, time frame and question you’d like to address. Here is a look at some you might consider.
Speaking with target customers in face-to-face meetings or over a videoconference can provide more nuanced insights than you’ll get from a survey. Options include formal, structured interviews with set questions and unstructured interviews, which are more free-flowing and open-ended conversations that will help you gather both general and spontaneous reactions to your ideas.
Before you invest in rolling out an ad or branding campaign, you may want to determine how effective it will be. Campaign research involves taking a look at pre- and post-campaign performance to determine how it is perceived by your audience. Pre-campaign data will help you find out if your message is resonating with a test group before you roll out the entire campaign, and post-campaign data can help you fine-tune your message going forward.
Carefully worded questionnaires can help you gather information about what your target audience cares about. You can use surveys to learn about factors such as their beliefs, priorities, challenges, preferences, habits and motivations. Surveys can be conducted in person, by phone or online using free or inexpensive tools such as Google Forms or SurveyMonkey. A market research firm can help you to word the survey questions and analyze the data in a way that ensures greater accuracy. Or if you’re designing the survey yourself, you can learn how from Harvard University’s Tip Sheet for questionnaire design, which includes links to helpful resources.
This is a method of comparing your business to both direct and indirect competitors. It may help you discover new strategies or give you fresh ideas on pricing, operational efficiency, marketing, target audiences or building better relationships with customers.
For more information, see “Competitive analysis: What it is and how to do it.”
Pricing your product or service appropriately can increase the likelihood your ideal customers will buy. A pricing study can help you determine the right price range to achieve your business goals — making sure your offering isn’t too expensive for your target buyers or priced so low that it seems inferior to competing products. Pricing research methods can range from asking existing customers what they would be willing to pay to more sophisticated studies, which use a variety of methodologies, from a market research firm.
This is a process in which you create profiles of your target customers — such as “Ellen the engineer” or “Tom the tall shopper” — based on their pain points, wants and needs, and behaviors. It will usually include demographic information such as their age, gender, career status, goals, challenges and interests and may include quotes to illustrate who they are.
Dividing potential customers into groups based on similar characteristics — such as age, gender, geography, income or buying habits — in what is known as market segmentation research, can enable you to gather data that lets you customize your product development and marketing. By creating more personalized marketing, you may be able to achieve higher conversion rates and lower your customer acquisition cost.
Even the smallest business can build a valuable brand. Just think about the best pizzerias and bakeries in your community and the following they have among your friends and neighbors. Most consumers are aware of brands like Apple or Nike because of their multimillion-dollar ad campaigns, but achieving high brand awareness is more challenging for a small business. Using brand awareness research can help you measure how many customers know about your brand and their recall of your brand name, which can help you assess your current brand awareness and improve upon it in the future.
Bringing together a group of target customers for an in-person, moderated discussion is known as a focus group. Often focus groups are preselected based on shared characteristics — for instance, busy working moms in the local area or avid fly-fishing enthusiasts — so that the discussion can be targeted and produce details on their preferences and concerns. Even if a formal focus group is beyond your budget, you may be able to benefit from the general approach that is used in this type of research. For instance, if you run a bakery and are thinking of adding gluten-free muffins, you might ask a group of regulars who meet there for coffee if anyone would buy them at their next meetup.
This type of research tells you how much customers trust and value your brand and how likely they are to keep purchasing it, even if the price or convenience of doing so changes. It can also tell you if they are willing to buy your brand and nothing else or prefer your brand but are willing to try something else.
One of the most important things to measure in a small business is how happy your customers are with your products and services and the experience of buying them — or even returning them. Some methodologies, such as the Net Promoter Score, indicate whether customers are happy enough to rave about you to other potential shoppers like their friends and family, asking them to rate the likelihood that they will spread the word on a scale of 1 to 10. If you would like to generate more free word-of-mouth marketing, this can give you an idea of whether your customers are satisfied enough to make referrals. If you use a customer relationship management (CRM) software system, it may also have built-in tools you can send out when a customer buys something from you to get their feedback on what you sold them and the purchasing experience. Note, however, that overuse of surveys can decrease customer satisfaction.
