John Cradden offers tips on how to do lean and effective market research for your small business.
No matter what sector you operate in, understanding the context in which you’re trading is crucial. It might be about your local area, your customers’ profiles, who your competition is and what people are prepared to pay for your product or service, among other insights.
Market research can be broadly categorised into two types: primary and secondary. Primary research is first-hand information you gather yourself specifically for your own needs, usually through interviews, focus groups, questionnaires, surveys etc. Secondary research is about taking data that already exists from elsewhere and analysing it in a way that suits your needs.
“Market research will give you important information about your target market, but it’s equally important to interpret your findings as objectively as you can”
Good market research can help a firm of any size, but there’s no doubt it can be very expensive, particularly primary research. Big businesses will have whole teams dedicated to interviewing customers, arranging focus groups, conducting surveys, and analysing buying patterns from data.
But regardless of what type of research you focus on, it’s possible to do lean and effective market research for your small business by bearing the following tips in mind.
Be clear about the reasons why
Unless you have a clear objective in mind or know exactly what you want to find out (eg more info on your customers, analysis of your competitors), a market research project could end up going in all kinds of directions and end up being practically useless. Once you’re clear about your current situation and how research would help to inform your business or marketing strategy, then the specific goals for your research endeavour should become clearer.
Start researching early
Market research can be conducted potentially at any stage of the genesis of a new product or service (or even a whole new business), but doing it as early as possible will likely save you time and money in the long run.
Keep it small scale
As mentioned earlier, primary research can be expensive unless you keep it small-scale, regardless of the method you choose: focus groups, surveys, interviews, etc. If the aim is to get quality information rather than loads of quantitative data, find out what the optimum number of participants might be. The chances are it’s probably much lower than you think.
Exploit available resources or research
Secondary research can be a good option for businesses on a limited budget and can be done in a shorter timeframe. If you’re an Enterprise Ireland-supported firm, a really good resource is the Market Research Centre. But universities are often overlooked, too.
Mine digital media for what your customers are saying
Regardless of whether you do most of your trading online or offline, the internet and social media makes it easier than ever to find out what your customers are saying. Indeed, social media marketing has become a whole discipline in its own right, with one area of research now known as ‘social listening’ – the process of identifying and assessing what is said about a company, product or brand via social media. This includes monitoring online customer support forums, using software tools to extract any comments or mentions on the big social media platforms like Facebook, LinkedIn or Twitter, and analysing them in a systematic way.
Consider commissioning research
You could commission an external market research specialist to do some work for you, but it’s always a good idea to explore some basic DIY research first. This way you can start to get a feel for what you need and whether you have the skills and resources in-house to conduct it. You might conclude at some point that what you need might be too big or too challenging do yourself. If so, that’s the point to consider taking on some kind of professional service.
Understand the limits of market research
Market research will give you important information about your target market, but it’s equally important to interpret your findings as objectively as you can – particularly with secondary or external research that was originally commissioned for different purposes. If it’s primary research, there is always the risk that your sample might be too small (and therefore not representative of the whole market), or that people don’t say what they truly believe in surveys. There’s also the difficulty of factoring in new trends, or even gauging the real impact of your business on the market in question. In particular, trust your gut instincts, because they are often based on the experience you’ve gained working in the industry.