Every business needs market research. Without it you could end up spending time, effort and money developing a product or service nobody actually wants.
Conducting market research enables you to test your business idea with your potential new customer base and can provide invaluable information to fine tune your product or service.
Use existing market research
There are two main ways to approach market research. The first involves accessing existing research. This could come from government bodies or trade organisations and while this kind of research is always useful it will only likely deliver very general information. Alternatively you could consider buying research reports from any number of businesses. A google search will list the websites of businesses offering market research reports across sectors, covering various demographics.
Another source of existing research might be found on the websites of your competitors. If your competitors sell advertising space on their website they may provide potential advertisers a breakdown of the demographics of their visitors.
Carry out your own market research
The second approach is to carry out market research yourself which involves speaking directly to your market.
In effect, in the first method described above you are gleaning important information from the research of others. This is helpful but lacks detail specific to your business. The second method enables you to form the questions and tease out information relevant to the product or service you plan to sell. It also gives you the opportunity to gather more detailed demographic information which will be invaluable to you in the sales process.
At this stage in your business you are unlikely to have made many, if any, sales. So the options to carry out market research are limited and depend on the product or service you plan to offer.
Devising a survey or questionnaire
Consider first the kind of data you want to collect from your questionnaires. Do you want qualitative or quantitative responses.
Quantitative might be numerical responses. An example of a question designed to elicit a quantitative response might be How many times do you visit the osteopath a year? In this question you are clearly only looking for a number or number range. This kind of question is called a closed question.
Qualitative questions are designed to elicit a fuller response such as What would you change about this product to better suit your needs? Clearly here the respondent is being asked for their opinion. This kind of question is called an open question.
If conducting the survey in person you should consider that people may feel obliged to be polite. For instance, if you ask if they would refer your product or service to others they may feel obliged to say yes. This would be less likely to be the case if the person conducting the survey is not the business owner or the questionnaire is completed online. Be clear about how much of their time you will be taking up from the start and try not to exaggerate or under estimate.
The dos and don’ts of survey questions
Do
- Decide on what you want to find out before writing the questions
- Organise the questions in a logical sequence so they make sense to the respondent.
- Ask questions that are easy to understand and clear in what you are trying to find out.
- Ask open questions where possible to encourage full answers and closed questions only where necessary.
Don’t
- Ask multiple questions in one question. It will lead to confused responses.
- Ask leading questions. There is no point doing market research if you are guiding people’s responses.
- Ask questions with hypotheticals. This just leads to speculation on the part of the respondent
- Take longer to carry out the survey than originally stated.
Focus groups and interviews
The best way to approach gathering information from a questionnaire is to identify organisations or groups where your target market frequent. This won’t be possible for everyone but if you are lucky enough to find such a place you may want to take advantage of this.
Contact the organisation or group and ask if you can conduct a survey for a new product or service. Explain the benefits and perhaps offer a discount or free sample for each person who takes part. You could even offer a donation to the group. Examples include mothers and toddler groups, Women’s Institute, sports fan groups. You could also look at online groups and forums.
If you can’t identify an appropriate existing organisation or group you could invite people who fit the demographic of your target market to a focus group of your own. You would need to secure a venue and again offer an incentive, such as a free sample or payment in return for taking part. You would need to ensure the focus group was representative of your target market or run many focus groups to ensure representative feedback.
Clipboard questionnaire
Surveys may be carried out in town centres with a clipboard. If considering this option you will need to contact your local council first. You may be required to get a permit. This approach would work if the location you choose attracts the demographic you want to target.
Alternatively, you could try going door to door cold calling people for a response to your survey or telephone people in their homes. This option is more difficult. Some people may find it intrusive and be less willing to answer your questions. If you’re knocking on doors it is less likely that you would be able to focus on responses from a specific demographic.
Online surveys
If you choose to run an online survey you could consider using a service such as surveymonkey.com. This would allow you to devise a questionnaire using one of their templates and to distribute this to a defined target market via their website using a data list of email addresses.
This is particularly useful for a new start up which perhaps doesn’t have their own customer email lists set up. The advantage of carrying out your market research this way is that you can sit back and wait for the results to be returned to you. The disadvantage is that any follow up questions, which you could have asked during a focus group or interview, cannot be asked.