Ten Tips for Conducting Market Research On a Shoestring Budget

Note:  This is an article SJ Insights’ CEO Sheree Johnson wrote for KC Source Link several years ago and it seemed fitting to share it now as many businesses are retooling for a new normal and have limited resources to do market research.

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As a small business, many entrepreneurs and owners may feel conducting effective market research is out of their reach budget-wise. Yet done appropriately, research can be implemented for any business. Here are ten tips on how your business can use market research to understand how to best market, price, distribute and promote your product/service:

#1Start with some basic market intelligence gathering.

Use the Internet. So much information already exists – you can Google/search for general business articles on your product category, users/purchasers, competition and more. Go deeper than the first page of search results – many a research jewel has been found by looking at search results through page three or four. Sometimes these don’t surface to the top, so read the abstracts and scroll down for a few pages.

Review industry publications. Most product or service categories have a magazine published in the industry. It can be print or online, but in either case, it can provide some useful insights into industry trends, issues, resources, trade show events, etc. Look for an editor’s contact information and call or email them with questions you have about the industry. Editors are also great to network with, and will readily put you in contact with subject matter experts.

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Contact industry trade associations. Most industries have a trade association serving that market, and these organizations are great resources for insight. Start with their website and look under “Resources” or something similar – they typically conduct their own market research on trends and issues in the industry.

Start collecting competitive data. From pulling a sample ad out of the newspaper or a magazine, to doing a screen capture online of an ad, collect as much insight about your competition as possible. Go to their websites and review their product areas. You might want to do a competitive audit and set up a spreadsheet to compare products (features, benefits, prices), brand positioning and messaging.


#2 – Take advantage of free secondary research.

Census data, government reports, industry association research and other data exist online. In addition, local media like radio stations, TV stations and local cable systems subscribe to a variety of syndicated reports by market (typically Scarborough). Scarborough is a syndicated, subscription service owned by Nielsen, and they connect Americans’ media consumption with their lifestyles, demographics, product usage, buying behaviors and attitudes for 210 different markets. Just call a station and ask for a local sales rep, and build an ally who will share the data with you.

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#3 – Do some secret shopping.

Whatever your product or service, put yourself in the shoes of the buyer and do some one-on-one secret shopping – at retail outlets, trade shows, events, online, etc. 


#4 – Look to internal sources.

Don’t underestimate the power of capturing data from your current employees and customers before you do broader research. Customer service, call center and sales teams can be a valuable resource when it comes to competition, customer feedback, new products and new markets.


#5 – Use your trusted advisors.

Most small business owners have business counselors, advisors, mentors or former colleagues they rely on to provide help with operational issues. But they can also serve to be great, honest resources to help validate topics you would normally research.


#6 – Build/update your email list.

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Every business owner should have an email list. Make sure you are capturing customer’s email addresses at a variety of touch points so you can build an opt-in list not only for promotions but for research as well. To avoid the monthly fee that many email service providers charge you might want to try out those that offer free services for having a smaller number of subscribers. For instance, MailChimp offers its service for free for businesses with fewer than 2,000 subscribers, if your list grows beyond that, there are many affordable plan options to consider.


#7 – Set up customer panels.

Do a random sampling of your customers and invite them (via email) to participate in a customer panel for your brand, product or service. You might reward them with something of small value for participating (a coupon, gift card, etc.). You can run ideas by your panel via email and get qualitative feedback that typically proves quite insightful.


#8 – Survey your audience.

Most quantitative surveys are done online these days, and it’s very easy to set up a survey using an online tool like Survey Monkey to design your survey, collect your data, and prepare a report. You can do free surveys with 10 questions up to 100 responses, or you can subscribe to the tool for as low as $25 per month which gives you an incredible number of added features. You can also tap into procuring respondents from Survey Monkey and/or using your own email list to garner customer responses.
This is one area where you can spend a lot of money to get professional help, but if you follow a few guidelines, it can be very easy to design surveys yourself.  Also, Survey Monkey has some templates you can use as well as question formats. It’s up to you to decide what you’re trying to find out, so start by clearly defining an objective for the research. Make sure you test it out yourself and have several others test the survey as well.


#9 – Put together a focus (discussion) group.

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Focus groups provide a great way to evaluate products, concepts or brand positioning to learn how well they’ll be received by your target audience. However, focus groups are a highly specialized form of market research that requires a professional to organize and conduct them. It is almost impossible to conduct effective focus groups on your own, even if you are a trained professional in this type of research.

If you can’t afford to do professional groups with a trained moderator, and you’re really looking for some initial qualitative feedback, you can try and set up a simple discussion group (held at your office, or a trade show/expo) on your own. But do so with extreme caution and acknowledgment that you shouldn’t go to the bank with the results – they are directional at best.

To recruit participants, tap into your customer database, or recruit friends of friends/family, assuming you can assemble a group of ten to twelve people representative of your target market. Don’t directly ask friends/family, because they probably won’t tell you the truth.

Prepare a discussion guide about the topics you want to cover, and make sure you know how you plan to gather that information from them. Typically, you are looking for red flags or comprehension issues – ask them about the pro’s/con’s or what they like/don’t like. Don’t come to a consensus in the group, but rather take their feedback back for consideration and refinement of your ideas.


#10 – Use social media.

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If you have a strong following on any of your social media platforms such as Facebook, LinkedIn, Instagram, Twitter, etc., they can be a great place to solicit opinions. This will also give you valuable insight about who might actually care about a new product, etc., by who responds to your questions. You can pose a question or two, and seek comments/opinions of your followers. Be careful though, social media is public, so if you don’t want to reveal to your competition what you’re thinking, you might want to use social media for polling about things that don’t give away your plans.


Summary

Doing any market research is better than none, so if you are cash-strapped, hopefully some of these tips might work for you. The insights you gather at least could help you shape your short and long term business plan.

However, keep in mind, in order for market research to have any real benefit, it will need to be done accurately. Poorly executed research can produce results that lead you astray. This means that you should take the research you do with a grain of salt. And then at some point, the sooner you can start doing professional market research, the more money you will save in the long run by hopefully preventing misguided business decisions. If you are looking for some help in this area, contact us – we can assist in any of the areas outlined.

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Posted in Market Research

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