Basic market research for small business
Market research is not just for the big corporations. Small and medium-sized businesses can also conduct market research with relatively little expense. All that is required is a carefully structured, properly targeted approach to obtain invaluable market information.
For many small business people, research is thought of as an activity for major corporations with deep pockets.
Most commonly they think of national surveys, long lead times and untold expenditure that may or may not pay dividends.
But research does not have to be like that. Carefully structured, properly targeted research can provide invaluable market information without being an ultra expensive activity.
That’s true for both quantitative research (that aims to give you a feel for the numbers) and qualitative research (that’s designed to maximize understanding and explore issues in some depth).
Essentially for any business, market research is a management tool. It can be used to reduce the financial risk inherent in marketing decisions. It can help in the gathering of factual data for predicting consumer behaviours.
Research can also help traders understand the strengths and weaknesses of competitor products or services.
In many situations market research is all about gathering information relating to the behaviour, characteristics and attitudes of consumers. It is used to facilitate the marketing of appropriate goods and services and to discover how such products rate in comparison to competitive offerings.
To uncover usable market information, without even talking to professional market researchers, there is a great deal that the small business owner can do with an up-to-date relational database.
By applying market research techniques to a customer database, companies can now develop a realistic picture of the buying habits of their customers.
The detailed information available from customer records, such as credit records, spending patterns and income levels enables companies to build a profile of good customers.
They can also segment their customer base into groups such as top value customers, repeat customers and new customers.
From that point, they can then angle their prospecting to attract the type of people who best match the profile of their top customers.
By using your database to gather information, you are dealing with actual customers. With such an approach your research is much more consistent and enables you to test new products in a controlled environment among advocates of your brand.
In the ideal world, if you use your database fully you can track the buying habits of your customers so closely that eventually you will be able to offer them only what they want. This is practical research at its best.
Apart from the value of the database, for SMEs there are numerous effective alternatives for collecting information. Some of these may not even be thought of as research. Yet they are generally available and in many cases they are free. Such techniques include:
Talking to customers. Your own customers can be an invaluable source of information about the strengths and weaknesses of your own product, how they use your product and the competition.
. They are involved in your business. Team members are usually alert to relevant internal and external activities and there needs to be a methodology for tapping into this source of data.
Warranty cards. If you receive these and you are not using them as a channel of critical information, you are missing out on detailed information about your current buyers.
Trade Associations. These can be particularly useful in relation to your competitors.
Governments departments. Each country has a department specializing in small business that can provide factual data about a wide range of business matters.
Chambers of Commerce. Similar to trade associations, but on a broader scale, these can be a great source of information.
Suppliers. Because they usually deal with your competitors and sometimes your customers, it is a smart move to develop an open channel of communication with as many of your suppliers as possible.
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