Easy and effective market research
To grow your business you have to know your market and your customer. Good market research will help you better understand what customers want to buy, what they are willing to pay and how you can better position your business to be their preferred vendor.
Market research need not necessarily be complex or time consuming. In fact, it is something that every business in Canada does; often without thinking about it or referring to it as market research.
Before you were a start-up, you probably gathered information about the feasibility of your idea, including customer preferences, demand for your product and the best location for your enterprise. If you developed a formal business plan, it most likely includes information about the marketplace, competition and your target customers.
Market research through secondary sources – information gathered online, in a library or through a trade publication – is important. But the most useful information is often what you collect first-hand, within your own market (or prospective market) and through your own operations and customers. With this “primary source” market research you can find out why customers choose your business, how you can retain them, and how you can grow your customer base.
Initially, depending on the size of your customer base, you are likely able to do this through person-to-person conversations with your customers (face-to-face, online or by phone). However, as you continue to add customers it becomes more difficult to be attentive to each individual’s needs. At such a point, you may want to consider additional means to gain customer insights.
For instance, come up with a brief survey to help you gain a fuller understanding of who your customers are, their reasons for choosing your products or services, and their level of satisfaction (or dissatisfaction).
Customer surveys can be administered directly (by a sales person) or distributed in a non-invasive way. This can include simple measures such as the visible placement of customer feedback forms or questionnaires at your place of business, or within mailed invoices. If you maintain a website you can also incorporate multi-level surveys for customers at little or no cost. There are numerous on-line options available for DIY surveys, and many of them are free. Links to the survey should feature prominently on your homepage and in e-mail and other correspondence with your customers.
Researching the preferences of non-customers can be more problematic – particularly due to consumer backlash and legislation against telemarketing and unsolicited e-mail. The direct mail approach is less restricted, but has a relatively low response rate. You can also use direct face-to-face approaches such as a booth at a consumer or trade fair where target customers will be present. Providing incentives can increase the response rate (for instance, offer a coupon, discount or sample for completed surveys).
Other methods of gaining primary research include focus groups (a gathering of consumers who are brought together to discuss a product) and personal interviews (one-on-one sessions with consumers). For such events, you can spur conversation by offering product samples and comparison products (your own product or those of competitors).
The range of questions you may raise during a market research exercise will vary from product to product, or service to service. It should include questions to determine preference (flavours or features), consumer behavior (“how often do/would you use the product?”) and pricing (“how much do you pay for…?).
A first and easy step you can do to improve your market research is to turn your customers’ existing feedback into data. Keep a record of the feedback you already receive from your customers and compare customers’ preferences and complaints. This will give you a data set from which you can start drawing conclusions and shaping strategy.
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