Small business market research is just as important as research for large multi-nationals. Every business, whatever its size, needs to minimise its risk by obtaining objective data on its customers, products, services and the marketplace in general. The difference, of course, is that you don’t have the resources to commission a professional market research company to do the work for you.
Fortunately, with a bit of time, common sense and initiative, there are effective ways to conduct market research on a budget.
1. Internal sources of information
Even if you haven’t been in business for very long, there should be data within the organisation that you can put to good use. Analyse past complaints and/or warranty claims to see if there is a pattern showing problems that need to be addressed. Ask your salespeople and front-line staff about the complaints, compliments and feedback that they receive – the chances are good that those at the coalface know a lot more about the day-to-day life of the business than you do! Also follow up with existing and past customers to find out what they like and dislike about your organisation – apart from yielding good research, it will also be a good PR exercise.
2. Set up formal systems
These will help you to gauge what clients think about you. Establish a proper register of complaints and compliments that must be filled in as and when these come into the business. Depending on the size of your operation, one register could be held at reception/switchboard, one by the sales manager and one by whoever deals with warranty claims. In a restaurant environment, the responsible person could be the maître d’ or manager, for example. Check these registers frequently. In five-star hotels for example, where customer opinion is a priority, guest feedback forms are typically read out at every morning’s heads of department meeting.
3. Attend trade shows and exhibitions
Events that attract the good and the great of your industry are an excellent place for small business market research. Visit your competitors’ stands to see what they’re up to and listen to the discussions going on at their stands. You’ll also be able to meet key customers and industry players and pump them for information about their likes, dislikes and concerns – whether about your company or your opposition. If you’re exhibiting yourself, it’s a good place to gauge customer interest in a potential product or service before launching it widely onto the market.
4. Go online
The internet can be a remarkable resource if you’re conducting market research on a budget. Visit websites like Hellopeter.com to see what complaints are being made by consumers against those in your industry (perhaps including yourself). There may also be blogs and chat forums that could yield valuable information about what your customer base is thinking. The fast-developing Group Buying industry in South Africa, for example, is finding that blog discussions are useful in identifying areas in which they need to improve.
5. Tap into existing bodies of knowledge
If you’re in an established sector, there are probably others who have already conducted market research of some kind, much of which is freely available for general consumption. Industry bodies, export promotion organisations, government departments and universities often have data available which you can adapt to your needs. Organisations like the Newspaper Advertising Bureau, for example, have a wealth of information on regional demographics, population trends, consumer buying habits, etc. Magazines and websites that cover business and marketing also frequently publish research articles.
Remember, though, that market research will only become effective when you use it properly. The insights you gain must be transformed into useful actions which will benefit the business. Avoid what’s commonly referred to as ‘analysis paralysis’ – the condition of being unable to make a decision due to too much information being available. Also steer clear of the temptation to ‘wait until more information is available’, which is usually an excuse put off unpleasant decisions for as long as possible.
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