Katalatto Asks: How Marketing Research is important for Small Business?
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 your business?
How does your target market make buying decisions?
What is your market share and how can we increase it?
How does customer satisfaction with your products or services measure up to that of the competition?
How will your existing customers respond to a new product or service?
How can you 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. Here you may find outline of these several techniques.
This type of research involves looking at information that has already been conducted and published, by exploring a few different types of resources:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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. Use facebook, twitter, instagram even snapchat to get in touch with your customers on a daily basis.
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.
- 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:
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.
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:
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.”
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 in a short time wise.