If you’re a small business owner you’re probably wondering how soon you should start conducting market research — or if you even need to do it at all.
The answer is a resounding yes, but only if you can find ways to do it affordably — otherwise, you probably won’t get a high enough return. Yet most experts agree that the sooner you start market research, the more money you will save in the long run by preventing poor business decisions.
Whether you’re trying to acquire new customers, launch a new product or enter into a new market — high quality research is crucial to your success. The insights you gather on product design, customer service or branding, for example, should help shape your short and long term business plan.
With that in mind, here are three tips for conducting market research while on a shoestring budget.
Look To Internal Sources First
Don’t underestimate the power of mining data from your current employees and customers before you outsource the work to an external agency. Your sales and customer service teams can be a valuable resource when it comes to competition, customer feedback, new products and new markets. There is a wealth of data already sitting at your front door, you just need to know how to access it and then interpret it.
“I wouldn’t commission anyone to do anything for me until I’d done the basic DIY research,” advises Paul Mooney, director at Blue Orchid, a small business support service.
The best way to end up with reliable internal data is to survey your employees and customers regularly. This may not result in a high quantity of data, but its quality will be unmatched.
Take Advantage Of Free Secondary Research
Census data, industry associations and other local authorities can give you insight into the bigger picture of your target market and where you will not want to invest. These secondary research sources collect information on consumer demographics, industry trends and market share — all things that will immediately impact your business and any new initiatives you undertake.
And don’t forget that a simple Google search can go a long way.
“It’s not like the old days where you had to dig around for information about your competitors on the internet, it’s usually there within seconds,” says Mooney. “You can do a lot of very quick, effective research just by spending an hour on the internet, looking at who your potential competitors are.”
Use Social Media To Discover Who Cares
Social media can be a valuable tool to test new concepts and uncover who actually cares about you and your products. Use it to ask questions about new launches and then carefully note who responds.
It provides key information about who’s following and interacting with your brand, says Hari Ghotra, former Tesco marketer and founder of online cooking website Hari Ghotra. She used social media, content campaigns and YouTube videos to get a basic understanding of her market when launching her beloved cooking website and was able to define key audience groups.
Keep in mind, in order for market research to have any real benefit to your overall business plan it will need to be done accurately. Poorly executed research can produce results that lead you astray. This means that you should take anecdotal and observational research with a grain of salt. As beneficial as they may be, you don’t want to make major decisions off of the opinions of one lone wolf.