Market research is an invaluable resource to a business no matter their size or stage of growth, whether that’s concept/idea phase, start-up or an established organisation.
If you want to know how your business or idea could perform in the market place, or what your customers think of your products and services, or how to make that new idea come to life. Then market research really is the key to unlocking this important information.
Market research can be carried out at various stages but is often advised to be undertaken at different stages during a business’s lifespan. Whether you have a new idea, or you’re starting a business, or looking to penetrate a new market, or trying to stay ahead of the curve with your competitors, then research is the only way to capture this data.
It is particularly important to undertake when you are launching a new business, product, and service, to help identify any unforeseen threats or opportunities arising.
The process of a SWOT analysis (strengths, weaknesses, opportunities, threats) may be a useful tool, to help you focus your thinking, because there are always various factors to consider, to ensure you and your business, the customers, your products or services are relevant, competitive and your target market want to buy.
You cannot know the answers to these questions unless you ask your current customers and/or target customer. This is where market research comes in. It will give you answers to your questions, that will help make informed business decisions.
The information you are seeking will be about factors such as products or services, pricing, image and awareness, customer care, after-sales service and the competition in the market.
Here are some key points to consider:
- Where are the market opportunities not filled by competitors?
- What benefits of your product or service need to be highlighted, what and why are customers wanting this product/service?
- How can you reach and sell to these people or businesses most cost-effectively?
- What might the demand be, what price point are customers looking for, is it subject to seasonal or cyclical variations, is this innovative?
- What are the problems in delivering your product (sourcing components, design, legislation)?
- Who should you be targeting? And what is the potential within this audience? What other audiences are also interested in your product/Service?
- Is there are mark-up/profit you can make on the product/service and still be competitive? and what are the implications for your business plan and cash flow?
You need to know what your customers or potential customers are currently doing and what they want to buy/use or what complementary products/services would they would like to use, including what they think and what they believe they want or need from your business/industry.
How long will my market research take?
The time needed for primary research, where respondents are asked a series of questions, depends on the scale of the project (the sample size) and the method employed (doing it yourself or using an agency). As a guide, your minimum sample size should be at least 10% of your customer base.
Many small businesses can get useful results in a week or two by doing it yourself. If outsourcing, you should allow for longer.
Gathering hard statistics (via quantitative research) can take time. While this type of research is useful if a large investment decision is at stake, there is often a place for “quick and straight forward” lighter touch research which provides more emotional (qualitative) clues about the next action you should take.
What research methods would be useful for me?
Research methods are like tools in a toolbox, each more suited to one task than another. They include desk research (using the internet) and field research, which can include customer research (focus groups, street interviews, and mystery shopper or product trials & samples.)
The key to successful research is to first identify what information you are looking for, what questions do you need answers to. Then weigh up the priorities – eg speed versus detail, or analytical accuracy versus more emotional feedback and so on. These parameters will help you choose the most suitable research method.
For primary research, where respondents need to be asked a series of questions, the choice is between face-to-face interviews, telephone contact, mail or email questionnaires.
Face-to-face: This is useful if you need to show something and get a reaction (such as samples, photographs, a prototype or packaging designs). It is also appropriate if you are talking to people who are not already customers.
Telephone: Use the phone to interview established customers or if doing a business-to-business survey.
Mail or email: These can be useful but also have limitations, as you can not be sure how many responses you will receive on your investment to the research. Often offering an incentive or prize to win will really help make this approach work.
Should I do my own research or get expert help in?
There are pros and cons to both approaches.
- DIY will give you a feel for what people think.
- You could save money by doing it yourself.
- DIY research is time-consuming and could be a distraction.
- You will be inexperienced – even the design of a simple questionnaire can be more complex than it looks.
Outsourcing the research
- You should end up with a professional job.
- The project can be completed quickly and thoroughly.
- The task will not eat into your own time.
- You will benefit from the tricks of the trade.
- The cost is higher
- The challenge of vetting and appointing the right support
How much will I have to spend?
DIY research costs time, not money. Outsourcing can help reduce the time element, however, there will be a cost. Depending on the research activity/method, data sample size and time scale, the cost can vary from £250 up to £1,000. Day rates for conducting in-depth customer focus groups may well be more.
However, if you want to explore the survey option, you could consider adding a few questions to an existing survey that is being created for other similar businesses or industries. This is called being part of an omnibus survey.
You may ask what is an omnibus survey??
The survey is conducted on behalf of a number of different organisations, within the same or similar field, industry or provider of the same products/services, where each pay to join the survey, and add their own questions. This enables all of the participating organisations to share the cost of research overheads.
There are a number of different omnibus survey categories, each targeting different groups, so it is important you consider the audience involved before signing up. One of the most widely used omnibus surveys is a business omnibus. This surveys businesses and business owners and is the perfect tool for anyone looking to gain a competitive advantage in the B2B space.
Not all marketing research consultants, will undertake this, as there can be biased in the survey, if a particular business has more experience then another with the type of questions they wish to ask.
So it is vital that before considering joining an Omnibus survey that you are aware of the other questions provided.
Also, the time frame can be an issue as ALL businesses involved have to agree to the period of the survey taking place.
Therefore, you will find often that market research consultants, will prefer to provide surveys and market research specifically for an individual client as it can be tailored to their needs, demographics and more importantly their time frame.
Penny-pinching could jeopardise the quality of your market research. If you end up with misleading answers, the whole exercise could prove very expensive. The market research company of the consultant will guide you but it is your business’s market research so the information and questions will be agreed with each client.
Can I trust research results as a basis for business decisions?
The more information you have, the more specific it is and the more up-to-date it is, therefore more reliable and relevant it is likely to be, to support you in your business decisions.
It is important to understand, though, that market research can never entirely take the risk out of business decision-making.
Although Market research will certainly provide you with additional information to consider in your decision making it cannot determine exact outcomes, you need to rely on your own knowledge of your business and customers.
Making any business decision regarding a new idea, growth area, new customer market or any other aspect where you are considering a change in your offering, without research it could be considered a greater unknown and therefore higher risk.
Even so, Market Research is not an absolute certainty, you still need to employ common sense, personal judgment, your current knowledge of your business and market.
When should I stop researching and go for it?
There is no definitive answer, it is when you as the person with the idea, vision or owner feels they have enough data, information, and understanding from the findings to be able to make decisions you feel confident in and reasonably certain you understand the market conditions, customer opinions, product positioning and most importantly demand.
Often, we would suggest asking a few questions as a final check:
- Did your sample size, provide you with enough data you require? Remember the smaller the size, the more limited the results and therefore you need to consider if it gives you a fair and realistic view.
- Do you believe based on the results from your research participants were unbiased and were they given a full and open platform to offer feedback and opinions.
- Are you sure nothing has happened since the survey to alter the situation? If in doubt, re-test the survey questionnaire or run the whole survey again.
There is no simple rule to follow about when to stop the research and get on with the project. This is one of those areas where you must be prepared to back your own judgement and experience. Research is there to give you information and guidance. Ultimately it is you who must make the decision for your business.
But market research alone is not enough to stay ahead of the game!!!!
You need to stay up to date with changes in your market, industry, customer base and changing trends.
For example, you should always be aware of your competitor’s activities, new products to the market, changes in the industry, whether local, national or international.
The best sources for this type of information are trade associations, government websites, online research providers and trade magazine, local trade/business fayres. Online groups, forums, industry networking and finally business journals. This type of information is referred to as secondary research. But will support you and your business stay ahead of the game and your competitors.