To run a successful business, you must know your market thoroughly. Strong market research can provide you with a range of information about your customers, your industry, and your competitors. In your start-up phase, it will help you determine how feasible a business idea is. As your business expands, you can use research to hone your marketing program, target and differentiate your product or service, look for new growth opportunities, etc.
The challenge for many small business owners is to do your research on a tight budget. Here are five cost-effective methods you can try:
1. Speak directly to customers and prospects
While direct mail questionnaires, in-depth telemarketing campaigns, focus groups, and other techniques are effective methods of surveying your customers and prospects, they can also be quite costly. Instead, you might want to try some informal versions of these methods.
For example, instead of holding a formal focus group to evaluate how your customers might respond to a new product or service, you can hold an informal meeting to gather data. Invite 5-10 of your customers to lunch, and tell them that you're looking for an off-the-record, informal appraisal of a new product or service. Then give them a presentation and ask for their input. Similarly, you can have someone in your office phone 15 or 20 customers and ask them the same survey questions. While you won't get scientific results, you will get some input on general trends and may even get some new customer-driven ideas
2. Use students
Get in touch with the marketing department of your local college or university and ask if there are marketing classes or individual students who might be interested in working on a market research project. These projects are often welcomed by students as a way of gaining experience or special course credits. In addition to saving you money, working with students could also net you fresh ideas about ways to design and conduct your market research. When contacting the college or university, direct your request to the university administration or the marketing/management studies department.
3. Take advantage of your library
Reference librarians are one of the great untapped resources for small business owners. Your public library has a wealth of facts and figures available through various industry directories, government abstracts, and other reference guides. Visit the reference section and speak with the librarian. Explain as precisely as possible what you're looking for, and this person will be able to direct you to the appropriate resources.
Some local public libraries will not have the depth and breadth of business information you're looking for. If that's the case in your area, try the library of your local college or university, which tend to have this type of data.
Finally, Small Business Development Centers also tend to have research libraries focused specifically on the needs of small businesses.
4. Call your trade association
Trade associations regularly gather information about their respective industries and make it available to association members. These surveys often cover issues like typical company operating costs, industry growth trends, new market opportunities, etc.
These research reports are often available only to association members, so you may have to join to get access. To locate the trade association for your industry, look in the "Gale Encyclopedia of Business and Professional Associations" (Gale Research), available at your library reference desk.
5. Read trade publications
Reading trade journals, magazines, newspapers, and industry newsletters is an excellent way to learn about trends in your industry and keep ahead of the curve. They often report on industry trends and other key issues before they're picked up by the general press. You also will find a wide array of information about your competitors. In addition, trade publications also commonly write articles about recent research data (for getting trend figures) or may even conduct proprietary market research.
You can look up the names of relevant trade and business publications in directories such as "Bacon's Guide to Periodicals" or "Standard Rate & Data" (available at most libraries). Call the publication and ask for a subscription form – many are free to qualified companies in the industry. You can also often find subscription forms and recent articles at these publications' Web sites.
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