Market Research For Beginners http://www.marketresearchforbeginners.com A step by step guide to designing and conducting market research Thu, 17 Oct 2013 05:43:17 +0000 en-US hourly 1 http://wordpress.org/?v=3.8 Four Ways to Conduct Market Research Online You May Not Have Been Aware Of http://www.marketresearchforbeginners.com/four-ways-conduct-market-research-online-may-aware/?utm_source=rss&utm_medium=rss&utm_campaign=four-ways-conduct-market-research-online-may-aware http://www.marketresearchforbeginners.com/four-ways-conduct-market-research-online-may-aware/#comments Thu, 17 Oct 2013 05:26:49 +0000 http://www.marketresearchforbeginners.com/?p=1594 You know that as a small business owner, start-up or entrepreneur you need to conduct market research, but where do you start and how much is it going to cost?

If you don’t have a lot of money don’t worry, there are a number of ways you can conduct research into your chosen industry while sitting in front of your computer, at very little cost.

This post will show you where to find useful information about your industry and your business on the internet.

Online Research Tools

Here are four online research tools you can start using today to find trends.

Keyword Search – If  you have an online presence or you conduct business online you want to      find out what keywords people are using to find products and services such as yours.   There   are several keywords tools that you can use to see how many people are  searching for certain keywords each month, and you can see how many businesses  similar to yours are competing for each keyword.

Longtail Pro is a keyword tool can be used to find keywords that get a high number of searches, but have very little competition.  If you are in business already you can find keywords to use to optimise your site and attract search engine traffic.  Or as an entrepreneur you can find profitable product niches you may not have considered.  Longtail Pros developer Spencer Haws provides very thorough training videos where he explains exactly how to use the tool.

fencing guyCompetitor Links – We have all heard of      back linking as an SEO tool.  It      still works.   A great way to      compete with your competitors is to check out which sites are linking to      them, and monitor your competitors PR Campaigns.  An easy and free way to find out who is linking your competitors is to visit backlinkwatch.com and type in your  competitors email address and it will produce a list of websites that link to your customer’s website.

Read Blogs – Blogs are a great way to find out what people are discussing the most, and thus potentially uncovering emerging trends that you can tap into early.  It is a great way to find out about a  new product, or an unfulfilled need for which you could provide a solution.

There are several places you can go to find out what is being discussed on blogs and other social platforms some examples are Technorati and Social Mentions.

Conduct your own online survey – A great way to gauge public opinion on a      certain topic is to ask them.  There  are a number of online survey platforms available that you can use to survey customers such as SuveyGizmo or Fluid Surveys.  You can easily email your customers or  list with a link to your survey or have a pop up survey on your website  set the timing so that visitors are there for at least one minute before   the survey pops up).   If you are yet to find customers you can place your links in forums or chat groups where your audience hangs out.

These four tools will help you find what people are searching for and how, and what is trending at the moment.

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Three Uses for Market Research You May Not Have Been Aware of http://www.marketresearchforbeginners.com/three-uses-market-research-may-aware/?utm_source=rss&utm_medium=rss&utm_campaign=three-uses-market-research-may-aware http://www.marketresearchforbeginners.com/three-uses-market-research-may-aware/#comments Fri, 04 Oct 2013 05:38:00 +0000 http://www.marketresearchforbeginners.com/?p=1569 In this blog I have talked about how market research can be used to improve customer satisfaction, or find out if there is any market for your new product or service idea.  However, there are a number of other ways that market research can help your business.

In this article I want to talk about some of the other ways you can use DIY research to inform your business decisions, and with the number of online survey tools available you can do these surveys quickly yourself.

Three ways a market research survey can help you that you may not have previously considered.

 

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1. To help you understand consumer jargon

When you have been working in a particular industry for a long time you know all the technical jargon, and you use it without a second thought.  However that does not mean your customers will automatically understand what you are talking about if you use this jargon in your communications.

 

Several years ago I worked for an insurance company and we needed to find out what language we needed to use in an advertising campaign.  We where trying to create an advertising campaign to inform customers that our company automatically insured all the added extras on your car.  The extras we were talking about were items such as the sunroof alloy wheels air conditioning and tinted windows etc.   We needed one word to describe all these features that customers could understand so it could be used in the campaign,

So we asked a simple question, here is a list of items you may find on your car, how would you describe these items in one word?

We got one word from customers that described the items which meant customers understood what we were talking about in our campaigns.

2. Increasing your media return on investment

Market research can tell you exactly how to target your advertising to ensure you reach the right people with the right advertising message, leading to a high return on investment for your advertising dollar.

Insights into which media your target market consumes and finding out what messages appeal to them you are in a position to create a strong advertising strategy using the most appropriate channels.

 

3. Crisis management

If your business faces an issue that could potentially damage its public opinion market research can be used to quickly gauge public opinion and suggest an appropriate response.

Many years ago I worked for a company that provided superannuation funds. Due to a miscalculation they were not going to have the funds to provide all fund holders with the pension fund promised.   As they thought about various ways they could pay out people’s retirement funds they tested each idea on their customers until they found one that most fund holders could agree upon.

In another job I was working with an airline.  They had a panel of respondents that they would test all their communications on first before sending it out to the media to ensure that any press releases and communications would not have a negative impact on them.

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With the number of DIY tools available on-line it is easy to monitor results as they come in to ensure you are up to date with the latest consumer opinion.

There are many ways in which market research can be used to effectively understand your customers and potential customers.

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How to use Market Research to Launch a New Product http://www.marketresearchforbeginners.com/use-market-research-launch-new-product/?utm_source=rss&utm_medium=rss&utm_campaign=use-market-research-launch-new-product http://www.marketresearchforbeginners.com/use-market-research-launch-new-product/#comments Tue, 24 Sep 2013 11:14:36 +0000 http://www.marketresearchforbeginners.com/?p=1562 Do you have a new product that you want to add to your existing range?  Or perhaps you are thinking about starting up in business and you want to know if there is a market for a particular product you are thinking of selling. It doesn’t matter if you have invented the product yourself or if you are selling other people’s products you are more likely to succeed if you have done some market research the among potential customers first to ensure there is a market for it.

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Market research will

  • tell you if there is likely to be any demand for your product
  • tell you who your target market is, allowing you to target them more effectively
  • tell you how your products compare to similar competitor offerings and whether customers would potentially switch

Below are six steps to investigating a new product idea

How to Investigate a New Product

1.      Define the objectives of the research

This means define what you want to find out from the market research?   In terms of new a new product launch your objectives might be:

  • Is there a demand for my new product?
  • Who is most likely to buy it?
  • What are the strengths and weaknesses of the product?
  • How does it compare to similar competitor offerings?
  • What is the best way to market the product?

 

2.      Define your target market.

You may not know exactly who they are and where they live but the more you can find out about your potential customers before you start the quicker and easier the rest of the research process is going to be.   For example if you are thinking of importing dresses then at least you know that a good place to start is to target women.   Market research will help you profile them, for example how old they are?  Which shopping channels do they use etc.

Secondary research is a good way to find out who your target market could be.   Try government websites such as the Bureau of Statistics, or report providers such as Ibis World

3.       Develop your questionnaire

For each objective outlined above, develop two or three questions to ask customers that will give you the information you require.  For example if you want to know who is most likely to buy the product you will require some demographic responses.  We have our own questionnaire template that can help.

4.      Gather your data

If you have a simple quantitative questionnaire you may be able to conduct interviews online.  However, if you want to spend more time discussing a potential service and how it could be used you may prefer a face to face meeting.

5.      Process your data and interpret your findings

This step is so much easier if you are using an online software provider such as Fluid Surveys.  Even if you are not carrying out your research online it is handy to program your data, then all counting of individual responses is done for you.

When organising your data consider the following

  • Chart your responses so you can quickly identify trends.
  • When you find something then investigate further by using cross breaks and filters
  • Read all your comments in detail, to find out why people answered the way they did.

 

6.        Make Decisions

It is always good to have your objectives in front of you when you are analysing your data in order to ensure you have answered all your questions.  And keep in mind your goals.

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Market research is a powerful tool to help you understand your target market; it is worth doing some research to before launching a new product or service to save yourself a lot of stress in the long run.

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The Most Common Survey Errors http://www.marketresearchforbeginners.com/the-most-common-survey-errors/?utm_source=rss&utm_medium=rss&utm_campaign=the-most-common-survey-errors http://www.marketresearchforbeginners.com/the-most-common-survey-errors/#comments Wed, 05 Jun 2013 10:41:19 +0000 http://www.marketresearchforbeginners.com/?p=1309 When carrying DIY market research careful planning is required to avoid potential errors that can bias your data and lead to incorrect decision making.

errors

A common error made by DIYers is surveying the wrong respondents, that is interviewing those who do not accurately represent your target market (population). By understanding how some of these errors occur you will more likely be able to avoid them in the future.  Here I would like to discuss four of the most common errors

 Four of the Most Common Survey Errors

  1. Sampling Error – This situation occurs when the sample of the target population you select to participate in your survey does not accurately represent the target market for your business or your product.

For example – Let’s say your target market consisted mostly of those aged 25 – 50 years.   You want to carry out a survey to find out whether your business should include another product in its range.   So you used twitter to find a sample of respondents.  However when you get your survey results in you find all your responses are from those aged 22-35 years.

Your sample will not be representative of your target market and may over or under estimate the demand for the product.

  1. Selection Error – This error can occur when you are not randomly selecting respondents from your target market.     For example when you are interviewing people in a mall, you may target those who don’t seem too busy or are sitting and having a cup of coffee.  Or you are only interviewing in the middle of the day.  This means your sample may only contain respondents not working which can cause a problem if your target market consists of those in paid employment as well.
  2. Sampling Frame Error – A sampling frame is a source of contacts for a population from which a random sample is drawn for surveying.  For example your customer data base could be used as a sampling frame if you wanted to draw a random selection of customers to be interviewed.   The perfect sampling frame contains all members of the target population.  Therefore if you randomly draw sample of respondent from the sample frame then your sample should be representative.

However, it is difficult to find a list of an entire population.  It used to be common to use the phone book as a sampling frame if your target market was the entire population of a city.  However, this method is flawed as many have unlisted numbers or only have mobile phones nowadays therefore this is not the way to get a random sample.

  1. Non Response Error – This can occur when those who participate in the interview are different from those who don’t.   There are two ways this could happen.  For example when some members of the sampling frame are not available for interviewing, such as families with children who may be away over the summer holiday break.

Alternatively non response error can occur when those who participate in the study have different opinions than those who do not.  This is more likely to happen when the subject material is sensitive i.e.  politics, race or religion.  Those who participate in surveys are more likely to have stronger views (either negative or positive) than those who don’t potentially polarizing results.

 

There is always the potential for sampling error in your study; however there are some steps you can take to minimise it.   You can

  1. Sample as many people as your budget will permit, the higher the sample size the lower the response bias.
  2. Ensure that your sample of respondents closely matches your target population in terms of demographic make-up (i.e. age, gender, location etc).

If you are launching a new business and your target market (population) is accountants in the CBD. Then you should have an idea of the demographic makeup of the population of accountants in the Sydney CBD.  Perhaps 25% are sole traders, 55% work in medium-sized firms and 20% work for large firms.   Therefore if you wanted to interview a random sample of 100 accountants in the CBD.  25 should be sole traders, 55 should work in medium-sized businesses and 20 for large corporations.

Having a truly representative sample will help ensure more accuracy in your data.

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How to Survey your Market – Thinking outside the Online Survey Tools Box http://www.marketresearchforbeginners.com/how-to-survey-your-market-thinking-outside-the-online-survey-tools-box/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-survey-your-market-thinking-outside-the-online-survey-tools-box http://www.marketresearchforbeginners.com/how-to-survey-your-market-thinking-outside-the-online-survey-tools-box/#comments Tue, 07 May 2013 04:19:44 +0000 http://www.marketresearchforbeginners.com/?p=1258 mrI am always going on about how much small businesses need to do market research, even those who are just starting up.   Market Research will tell you everything you need to know about your customers, such as how they buy your products, and what needs they have that can be fulfilled by your products.

Many soloist and small businesses rush out into the market with their new product idea without first answering these questions, and then wonder why nobody buys their product.

One of the main reasons that research is skipped is due to lack of funds to hire a research agency, however there are a number of tools and resources available to help you run your own research studies right here on this site.

Another  common reason for skipping research is not knowing how to find people to interview.

I have seen potential start-ups randomly tweet their survey all around the world hoping to get numbers.  Or place them in forums that have nothing to do with their industry.   Surveying the wrong people is worse than not surveying anyone.  After all there is no point in asking people who are never going to use your product what they like about it.

Finding People to Right Interview

First, you need to do a little homework as to where your target market hangs out, and then get creative.  A lot of DIYers are reliant on the online survey software tools available, but online interviews are not always the best way to reach some markets.

After all if you have a potential pet sitting business in rural Queensland and you want to find out what would make people consider using your service, there is no point in tweeting your survey around the world.   People with an indoor cat in a Manhattan apartment will have a different attitude to pet sitting than those who live in a small town with a large property, and they will probably choose a pet sitting business in their own area.

If your business provides a service in a certain geographical area, an online survey will only work if you have email addresses of people in that area.  Otherwise you will need to choose another way of finding respondents.    In the case of the pet sitting example you may wish to consider knocking on the doors of people in the area or ring them or even post them a survey.

Other ways to Survey your Market

Here are two creative examples of how others have targeted the right people.

  1. A friend of mine wanted to find out whether a new nappy bag that looked like a stylish handbag would be appealing to mums with young children.  So she found some mothers groups and asked them to participate in the study.  She made up some samples and the mothers each took one home for a week, and kept a diary on how they used the bag, and what they liked and didn’t like about it.
  2.  A software developer I know developed a piece of software designed to help law firms manage billing hours.   We interviewed a number of decisions makers and users at several law firms about the strengths and weaknesses of their current software.  Then after letting some of them trial it for a while we interviewed them on how my friends software compared.  We gained some real insights on the strengths (i.e. selling points) and some improvements he could make to make the launch even stronger.

Those are a couple of ideas of how you could find respondents, just think about where your market hangs out and find creative ways to reach them.

sign postIf you have a little money there are a number of companies that can provide you with respondents and survey them for you (for example Research Now and Pure Profile).   These companies have a panel of respondents who have agreed to participate in surveys.   They also know a lot about these respondents’ lifestyles and habits so they can target your ideal respondent quickly.

This option will cost you a bit more, between $500 – $700 per question, and you will have to develop your own questionnaire and data analysis.  However, small market research agencies also use these companies to target respondents so you know their panels are accurate.

If you are starting up with very little capital and want to do your own market research then get creative, and think outside the online survey tool box.

 

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What is the Net Promoter Score? http://www.marketresearchforbeginners.com/what-is-the-net-promoter-score/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-the-net-promoter-score http://www.marketresearchforbeginners.com/what-is-the-net-promoter-score/#comments Mon, 22 Apr 2013 12:24:51 +0000 http://www.marketresearchforbeginners.com/?p=1238 We are living in a fast paced world.  When we want information we want it now.   Our customers are also busy, they are happy to provide quick feedback to a company they have had a recent interaction with, but that’s the key, quick feedback.  Not pages and pages of questions.

So some loyalty experts (Reichheld and Brooks) got together and came up with a single question, which they believe is the only one you need to ask your customers to predict customer loyalty.  What is this question?  The only question they believe you need to ask is……..

On a scale of 0 – 10 where 0 is Not at all likely and 10 is very likely, how likely are you to recommend (business X) to your family and friends?

The results of this question are then used as a measure of loyalty in the following way:

Customers that give a score of 0-6 are considered a detractor, that is they weren’t particularly happy with your service, and they are not doing your business any favours in terms of promoting you to their friends and family.

Customers who give a 7 or 8 are pretty happy with your service.  They got what they needed from you but they are not necessarily going to phone around all their friends and tell them about your business.

Those who give a 9 or a 10 are considered Advocates.  Which according to Reichald et al, are the ones most likely to sing your praises to everyone they come in contact with.

Your Net Promoter Score is your total number of ADVOCATES minus the total number of DETRACTORS.

 

nps

 

 

Is it the only question you need?

 

I am going to go out on a limb and say no.

A question asking whether customers are likely to recommend you in the future is a great measure of loyalty overall, and having just one score to look at is certainly easy, but then you need to ask yourself so what.

What are you going to do with this score?  How will you know what you need to do to improve your score and therefore your customer loyalty?

You need to understand what is important to customers in terms of the service they receive from you.   These important services attributes can then be turned into questions for your customers to rate you on.   Then in order to improve your overall NPS score you need to improve the ratings for each of the service areas that are not achieving high ratings.

 

So is the Net Promoter Score useful?

Yes I believe it is a quick and easy measure of satisfaction.   However, I think it should be used with a number of other measures and not be used as the only measure of satisfaction.

It’s a great measure of overall customer mood but it’s the ratings of the other service attributes that will provide you the actionable insights.

We have included a Net Promoter question in our own Customer Survey template.

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