Do-It-Yourself Market Research
Market research need not be costly and complicated.
Ask owners of small B-to-B businesses whether market research is essential and what you’re likely to hear is something like this: Sure, market research is critical for selling soft drinks and bathroom tissue, but when it comes to designing and marketing our products to other businesses, we know all we need to know.
These business owners are missing the point. If they have survived in their niche, it’s clear that they are smart and they have a handle on what customers need. But they are cheating themselves, because they aren’t getting the information that can help them figure out how to expand—perhaps by adding new products or delivering services in ways that the business owner never thought of.
The biggest misconception, says Lynn Altman, owner and president of Brand Now, a branding consultancy in New York, is that "this huge endeavor that requires an entire department to get it done properly."
Not so. "You can do all market research informally," says Altman, who wrote Brand It Yourself: The Fast, Focused Way to Marketplace Magic (Portfolio, 2006). You can use one-on-one interviews, create your own focus group, send customers a formal questionnaire or contact clients by phone or via email. All that matters is that you are getting input from current or prospective customers and asking the right questions. .
Ask and Listen
What are the right questions? Altman suggests starting with very basic ones, such as what the client likes or dislikes about your current product or service. Then, there are the "what if" questions, such as "What if I had 24-hour service—would you pay extra for it?" Use this opportunity to test your hunches about the business, too. As an expert in your field you’re probably right, but it really helps to get confirmation.
Also, you can use market-research techniques to get at the root of business problems. Emerson Smith, president and CEO of Metromark Market Research, based in Columbia, S.C., describes how one client figured out why one part of the country showed poorer sales than another.
Emerson called around to distributors in the poorer sales regions and said he was conducting research on how the distributor sold its products. In the course of the interviews he gleaned a critical bit of intelligence: A salesperson at one distributor only offered the client's products—tubes used in construction—if contractors asked for the brand specifically. Otherwise, contractors were sold the brand that the salesperson preferred. The reason for the salesperson's bias? He liked the other manufacturer's sales rep.
Emerson advised his client to get his sales rep to cultivate a better relationship with the salesperson and to emphasize the design features of the tubing that perhaps the salesperson didn't understand. Solving the mystery was part of a larger project, the type of engagement for which Emerson charges between $25,000 and $35,000. However, he says this work could have been done by the client.
When you get into market research with customers, be prepared to hear some things you might not like. Emerson recalls another client, a hospital, for whom he had done extensive research that revealed serious customer dissatisfaction. His clients dismissed the findings, but Emerson insisted they hear what patients had to say. He had several of the hospital's top officers make the survey calls themselves, disguising their true identities. They got an earful. "The CEO said it was the hardest thing, hearing that from their customers," Emerson says. "It’s amazing how much people will tell you, if you just ask them and listen to them." The key is to listen—not go into denial or look for reasons why the customer is wrong, Emerson adds.
Conducting Your Own Marketing Research: Getting StartedIf you’re new to conducting market research, here are some resources and tips from the experts to get you started.• Learn from the pros. Visit the Marketing Research Association web site (www.mra-net.org), which features a resources section for consumers. Emerson Smith, CEO of Metromark Market Research, advises small business clients to check out local federal small business development centers (www.sba.gov). |
Make It Worthwhile for Your Customers
A common impediment to market research is the fear that the customers won’t cooperate. And there is something to that. Altman suggests making market research a relationship-building experience by offering something free. "Even the littlest thing, a screwdriver with your name on it, can be valuable," she says. "People then think, ‘I’m not spending my time for nothing.’"
The cost for one of Emerson's 90-minute focus groups is about $5,000, which includes the rental of the venue, audio-visual services, food and paying the partipants between $60 and $75 apiece. For those business owners doing market research on the cheap, he suggests at least taking participants to dinner afterward—where the owner must resist the temptation to turn a social occasion into a sales event.
It also helps to follow up, to let survey and focus-group participants know what you did with their responses. If the research is aimed at fixing a problem, the B-to-B should then tell the research participants how these problems are being addressed. The customer will see that the business – even if it’s a mom-and-pop operation – has gone to the trouble of doing research, which shows a desire to give the client more satisfaction, Emerson says.
No matter how deep your knowledge of your industry is, no matter how technical your field, your customers can always tell you something you need to know. That’s what market research is all about. "There’s always room for improvement," says Emerson. "It’s in the mind of your clients, and it should be in your mind, as well."
