Marketing Survival Newsletter - Researching your Market
As a Response Services Group we have developed a rather sophisticated Research system that we believe benefits our clients through increased awareness of the market. In this issue I talk about what research is for the small business, how it benefits you, and how you can implement you own cost effective research activity.
Market RESEARCH
Market research is a critical but all to often neglected aspect of small business activity. The most obvious reason market research is important is that it tells you about your market. But, market research can also tell you about your product, your competitors, how to market and sell, and even how to distribute your products.
As professionals we can always make highly educated guesses that are somewhat right, but in order to have information based on empirical evidence, and improve our chances for success, we must first do market research.
Honey on Cheerios! - Whod've Thunk it?
Ever wonder how Ford knew the Mustang would be a good idea? No offense to Lee Iacocca, but he had some help making those decisions. He used market research. Ever wonder how the same company decided to make and name a car the Edsel? Same thing, research. And, have you ever wondered how General Foods knew that Honey Nut Cherrios would be a good compliment to plain Cherrios? You guessed it, research.
THE CORNERSTONE OF DECISION MAKING
Since the beginning of time people have been basing decisions on information. In the 20th century man has formalized this process and called it "research".
In the three examples I just gave, two are examples of situations where companies gathered and interpreted their research data correctly. Obviously the Ford Mustang and Honey Nut Cherrios have been huge successes. One is an example of a situation where a company gathered and interpreted their research data somewhat incorrectly. The Edsel didn’t do so well. None-the-less, big companies know that in order to be successful in their ventures they have a need-to-know, and research is the best way to find out. In fact, they spend hundreds of thousands to millions of dollars doing just that, research.
SO WHAT?
So what? You’re a small company with barely enough money to spend on marketing, let alone hundreds of thousands of dollars for research. You don’t have time or money to waste finding out what people like or want when you probably know already. Right? Wrong! You can’t afford not to do research. The smaller you are, the more important your research is. I’ll show you why, and how you can implement research that is both cost effective and productive.
A WINDOW,NOT A MIRROR
As companies begin new product introductions or new marketing campaigns they usually begin by relying on their past experience to determine their actions in the future. There is nothing wrong with this. We all must learn from the past. The problem occurs when we decide that we know more than we actually do about our markets.
Tracking your market is an interesting experience. One of the first things you will observe is that the markets change. Customer likes and dislikes change, the competition changes, market demographics change. In other words, what you learned two or three years ago may not be relevant today. The only way to anticipate these changes and be prepared is to know and understand today’s market condition.
By only using our past experience and guessing at our market conditions we restrict ourselves to working with only part of the information we need. The goal is to create a window into the prospective market, but we find ourselves looking not through a window, but a mirror. This mirror reflects what the developer thinks he knows. In order to be effective we must remove the back of the mirror and make it a window that allows us to see the reality of the market. Research allows us to do exactly that.
TOO BIG! TOO SMALL! AHHH - JUST RIGHT!
I always liked the story of the three bears, and so I named this the three bears theory of research. Most business people believe that good research must include a wide range of contacts, a large number of contacts, and cost a small fortune. I believe that research can be very focused, and can cost what you can afford.
A research project that is too little is a problem, a project that is too big is also a problem, but somewhere in the middle is a formula that is just right for you and your company’s needs.
Contrary to popular belief, research that contacts as few as five companies can sometimes tell you exactly what you want and need to know. Other times getting the information you need may require contacting a few hundred companies. In all cases, it is possible to create a research study that is affordable and provides you with the information you need.
PLANNING
As a business and marketing consultant I have a thing for planning. I like it and I teach it. So naturally my first step to creating a research study is planning. Here are some of the things I suggest you decide before you start a research project:
If you are able to answer these six questions you will have outlined a simple research study. Let’s say you want to know if a new mapping utility application has potential in a certain market. Your answers to each question might look like this:
Roll-Play & Budgeting
Once you have outlined your process, test it with in-house role playing. Role-playing is important because it lets you fine tune the process and make the survey process smooth, before actually speaking with customers.
In the role-playing process you can also time yourself to estimate how long you will spend on the phone. We estimate that it takes 2 to 5 calls to make contact with a company, before a single survey with a company can be conducted. Make sure you include time for attempted contacts as well as asking the survey questions in your phone time.
Once you have your phone time estimated you can then estimate your compilation and analysis time. Make sure you include time for database work, report formatting and report writing in your analysis time.
Now assign personnel to each activity and multiply the time by their individual hourly rates. Add this to the phone charges and you now have your budget for the survey.
Recording and Reporting your Findings
Most companies I work with, who have actually done in-house surveys, try to use the raw data in decision making.
I highly recommend you go through the process of creating a finished report of the raw data, showing your analysis and conclusions. This formalization of the reporting process forces you to look carefully at the data, consider it’s implications, and give serious thought to the recommendations and conclusions you draw from them. The report will also help you clearly communicate your findings to others. At the end of a research study I always compile a written report with my recommendations, and a copy of the raw data. I am always surprised at the information I discover during the writing process.
Use the Data, Maximize your Marketing Effort
So there it is, research 101 for small business. Quick, efficient, and effective. Now that you have conducted your survey, you have a wealth of information at your finger tips. Depending on your questions, you now have an indication of:
One more comment, train your telephone surveyors to be polite, and to the point. With practice they will be able to conduct effective surveys in little time. And, with practice you will be able to collect, analyze, and use information that will help you position your products, target your markets, and maximize your marketing efforts and dollars. Good luck, and good research. You never know, you might just find a hidden treasure out there.
~Nick Vasilieff
This newsletter was written by Nickolai N. Vasilieff; freelance writer and marketing consultant specializing in high technology industries.
For more information see www.nvasilieff.com. To contact Nick with questions or feedback, call 503-267-6339 or email vasilieff@mac.com.
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