You’ve heard a lot about the importance of doing market research, but what is it really, how do you do it? Doesn’t it cost a lot and isn’t something for big companies with lots of money? Why even bother with it for a microbusiness? Let’s take a look at these questions
Market Research – a Definition
Market research really means getting info you can use to market and sell your stuff. Pretty simple.
Market research lets you identify target markets, find ways to stand out in the crowd, and learn about your customers and your competition. It helps you learn about the market, where it is now and where it is headed in the future. It helps you find opportunities and risks.
The 5 W’s
Market Research is really just asking basic who, what, when, where and why questions.
- Who is buying from you? Who could be buying from you? Who do you want to buy from you? This includes the people who actually buy your product/service, who actually use your product/service, and who influence the decision makers. Who is the competition? Consider for this that competition includes companies in the same market as well as everything that competes for your customer’s time, money and attention.
- What are people buying now from you and others? What are their needs? What are they looking for in terms of price, service, features? What is the competition doing?
- When do consumers buy? Is there a seasonal market or event driven behavior? Are there any other triggers? When does competition do things?
- Where are customers? Where to they buy? Where is the competition active?
- Why do people make the decisions they do, why do they buy or not? Why chose one thing over another? Why does the competition do what it does?
- How do customers and potential customers perceive you, the competition and the market? How can you get new customers? How is the economy affecting you, your customers and the competition?
Why Do It?
You know you’ve got a great idea, so why mess around researching it, why spend time and money on that instead of selling? You know your idea will work so just go for it. If it doesn’t work, it must have been something else going on that you could not possibly have known about. It’s possible that you have found a sure-fire business idea, but what are the odds of winning the lottery? That is what you are banking on. You’ll be facing other people who will take the time, do the research and probably beat you because they are better prepared and will execute better.
Time spent now doing research will pay off later when you go after the right markets and pass on the wrong ones. If your idea is flawed you can fix things and make adjustments before you go to market, when it is still cheap and easy to do. Market research will keep you from trying to sell something to people who don’t want it. It can also help you find people who might want your product/service that you had not thought of. It can also help you set the correct price and budget how to spend your marketing, sales and advertising dollars..
How to Do It
Believe it or not, you are already doing market research everyday just by talking to people, getting customer feedback and being aware of what is going on in the market around you.
There are two basic methods for doing market research: you can do primary or secondary research.
Primary means you get information directly. You ask people questions and gather information directly from them. You try to get answers to the 5 W questions. You can do this through surveys, questionnaires, focus groups and interviews. It can all get expensive and you can end up with a lot of useless data because you asked the wrong questions or talked to the wrong people. If you don’t know what you are doing and can afford it, look for some professional help.
There are some things you can do on your own, for free though. Talk to customers. Have a comments section on your website so customers can give you feedback, good and bad. Check competitors if they have one as well. Become your competitor’s customer and see how they are doing things. Talk to their customers.
Talk to people around you, in your community, in online groups. See what they think about your idea and the market. But you have to keep in mind that people will often tell you what they think you want to hear, or what they think is the right answer. That is where some professional help comes in handy. They can help formulate good questions to draw out the real answers.
Secondary research means looking at info that has already been collected and, hopefully, analyzed for you. You can find lots of secondary info, for free or for a fee. Both can be good or bad.
There is a lot of secondary data online. The government publishes tons of it for free. Think about demographic and statistical info breaks people into all kinds of groups you can look at. There are studies by trade groups, research companies schools and others all around. You can also find plenty of names and research in your local library. Just ask a librarian for help.
Steps to Get You Started
All this is fine, but how do you actually get started with market research? Here’s a simple plan:
- Figure out why you are doing the research? Maybe you are looking for market niches you can fill, or you are trying to find out why your marketing is not working, or you are looking for new markets.
- Time and money. Decide how much you can spend on market research and how long you have to do it.
- Figure out types of research you can do, primary or secondary.
- If you are doing primary research, decide how to do it and develop whatever tools you need, like questionnaires, surveys, user comments etc.
- Collect your research data. Go out and ask questions and find secondary data.
- Organize and analyze the data. It is easy to collect data. Figuring out what it all means – not so easy. Drawing the correct conclusions and making decisions from them is the whole point of your work here and needs to be done with care. Sometimes the data can just pop right out at you and your plans are obvious, other times there is nothing conclusive you can use. Then it is back to the drawing board.
- Put the findings from your analysis and monitor the results
Market research can be tricky to do right, not to mention costly and time consuming, but it can well be worth the effort as an investment in the long term success of your microbusiness.
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