Every marketing plan needs to involve some level of marketing research to validate any marketing initiative and to understand what your customers really want. But what are the best research methods to use to suit your specific business needs?
Before I start, it should be noted that not all marketing research should only occur in big organisations with significant budgets. There are number of different research methods which small business can use to analyse their market.
By keeping your research methods as simple and focused as possible will help you collect, sort and analyse information without getting bogged down or disheartened.
Primary Research
For the purpose of this blog, I’m only going to focus on primary research as I’m assuming most people know how to obtain secondary research and information which is readily available from places such as trade unions, libraries, government authorities and departments, e.g. Australian Bureau of Statistics (ABS)
The four most common methods used to collect primary data include:
- Surveys or questionnaires
- Focus groups
- Personal interviews
- Observation
Surveys
Every small business can reap the benefits from using small scale surveys. SurveyMonkey.com is a smart tool to create and publish custom surveys, allowing the user to view results graphically and in real time. You should be surveying your customers at least every six months, or perhaps the next you send out an invoice. The cost to sign up is very cheap, so it’s worth a look.
But there is a definite art to designing good questionnaires. It is not the best method if the information you require is complex, if you need a lengthy response, or you are vague about the information you want.
So here are my top 10 common guidelines when developing the perfect survey:
1. Always place your contact details at the top of the first page.
2. Keep the layout simple, and break the page into sections where necessary.
3. Ask a maximum of 20 questions. No one likes to dedicate more than a few minutes of their time these days. If you need more information, think about developing two questionnaires and distributing them separately.
4. Make sure wording is clear, simple and concise.
5. Avoid asking two questions in one. i.e. Do you like the look and feel of the TX1000 broom stick? I may like the look, but it might feel awful. Hence it would be very difficult to answer this question properly.
6. Do not give a survey to your friends and family to complete. They will never give you an honest response!
7. If you’re begging the question, you will always get the answer you want, not the answer you require.
For example, I knew a lady who wanted to start up a new designer jewellery label whose main selling feature was that all her products were never made in offshore sweatshops, but only by certified and ethical jewellery makers. The survey question posed was, ‘How important is Ethical/Fair Trade to you generally speaking?’. Now of course I selected ‘Extremely Important’ – the top choice in the sliding scale.
I’m sure every person would like to think their jewellery, or any other product for that matter isn’t made in a sweat shop environment. But truth be told, buying behaviours are very different to consumer attitudes. This is something that’s very hard to identify in a survey.
Perhaps if the lady wrote the following question. It may have provided a more truthful response:
Please rank in order from 1 (Most important) to 5 (least important) what product characteristics are the most important to you when purchasing jewellery:
- Style
- Colour
- Price
- Quality
- Designer/Label
- If it was Ethically Made?
You could certainly drill down with these questions further. But essentially you may find that some consumers will find a style and a price that best suites their requirements. Whether it was made under Fair Trade practices may become irrelevant during the purchasing process.
8. Always ask at least one open ended question. This allows the person taking the survey to provide some insight into their own personal buying motives or challenges.
9. Give appropriate choices of answer – ‘yes/no, agree/disagree/unsure, etc. Choosing the right scale of response can get tricky. The larger the scale used, the harder it is to evaluate the answers.
10. Give a ‘return by’ date and always thank the respondent for taking the time to complete the questionnaire.
Distributing your questionnaire
You will get a better response rate if you are selective about whom you send the survey to. Only send it to people who you’ll know will be interested, who fit your customer profiles and are from the right geographic area.
Remember, the better the response rate, then the more credibility you can place on the outcome of your research. If you get more than a 60% response rate, then you’re doing very well.
Focus Groups
Running a focus group is a good way to find out what potential customers think of your product and service, and provide a great source of qualitative information. Participants are chosen for their willingness to contribute to a session. People to avoid are those who dominate a session and the sheep that will agree with everyone else.
If you ever choose focus groups as a form of marketing research it is better to outsource or delegate this function, otherwise you will spend countless hours of your own time trying to find the right people, and your time is more valuable than this. Market research companies usually pay participants travel expenses ($20 – $50) and give them small gifts or product samples.
I must also warn about the common pitfalls with focus groups. As they are very small, you cannot use the information as statistical evidence to support your marketing plan. For example, if 5 out of 10 people say they will buy your product, you cannot assume that 50% of the population will buy it. People’s attitudes also seem to prevail in a focus group, but their actual buying behaviour is very difficult to assess in this context. Hence, it should be on every small business owners agenda to take some time out of their work week to observe customer behaviour. Which leads me to my next research method….
Observation
Observation is an essential method of information gathering. In fact, so little time is dedicated to this form of primary research where you can actually study the purchasing process in real time. I would recommend that ever business owner spends at least half a day each week being an active or passive observer. You can sit away and count your competitors customers. For example, many airlines have a person standing at the queue of their competitor’s boarding gate with counters, measuring the number of people boarding the aircraft. This is just one method to help airlines determine ticket pricing and profitable markets.
Following customers through a shopping centre for example, allows you to see how people associate products with each other. For example, you may find those who buy electric shavers, may also buy electric tooth brushes. It also allows you to see how your competitors advertise and the pricing strategies they use.
You could even go to the extent of asking your competitors customers what they like and dislike about doing business with them. Make sure you record your findings as you’ll be amazed how much information you can find out. Plus, it doesn’t cost a cent!
Personal Interviews
A personal interview can be conducted in person or via the telephone. Face to face interviews allow you to study a person’s body language, while providing the opportunity to develop better rapport which is important if you want to establish an ongoing business relationship. Personal interviews are a great way to encourage people to provide more explanation, or suggest a better way of doing things. Just make sure you ask the same questions and record the results of each interview separately.
Final Note
As good research is the basis of a good marketing plan, an assessment of your situation must be performed before you proceed to set objectives. It should at least cover factors such as: markets, customer attitudes, culture and behaviour, competition, legal, economic, social, environmental and technological issues, distribution, demand, your product, your company, promotion and pricing. The wealth of information you gather means that no one is likely to read through it all, hence it is important to highlight the key issues and identify them in a SWOT summary to help make useful decisions for your business.
All for now.
Craig Pethebridge
