Knowing your market and understanding your customers should be on top of your to-do list. Good market research will help you better understand what customers want to buy, and what they’re willing to pay, putting you in a better position to be their preferred choice.
Market research is commonplace
Market research doesn’t need to be complex or time consuming. In fact, it’s something that every business in Canada does, often without even referring to it as market research.
You’ve probably already gathered information about the feasibility of your idea including:
- Customer preferences
- Demand for your product or service
- The best location for your enterprise
- If you’re developing a formal business plan, it’ll most likely include information about the marketplace, your competition, and your target customers
The most useful information is often what you collect firsthand, within your own market (or prospective market) and through your own operations and customers. With this ‘primary source’ market research, you can find out:
- Why customers will choose your business
- How you can gain your customer base
- How you can retain them
Depending on the size of your initial customer base, you’re likely able to gain primary information through person-to-person conversations with your customers (e.g. face-to-face, online or by phone).
However, as you continue to add customers you’ll find it more challenging to respond to them individually. So, you may want to consider other ways of gaining customer insights.
Market research can also be gathered through secondary sources such as:
- In a library
- Through a trade publication
Using surveys to gather more detailed information
Customer surveys can be administered directly (e.g. by a salesperson) or distributed in a non-invasive way (e.g. visible placement of customer feedback forms or questionnaires at your place of business, or within mailed invoices).
If you maintain a website, you can also include multi-level surveys for customers at little or no cost. There are numerous online options available for DIY surveys, and many of them are free. Links to
the survey should feature prominently on your homepage, in e-mail and other correspondence with your customers.
Researching prospective customers
This can be a little more difficult. People don’t often respond well to unsolicited email and telemarketing. The direct mail approach is less restricted, but has a relatively low response rate.
Face-to-face approaches such as at a consumer or trade fair where target customers will be present are likely to be more successful. Providing incentives can increase the response rate. For instance, offer a coupon, discount or sample for completed surveys.
Employing focus groups
Other methods of gaining primary research include"
- focus groups: a gathering of consumers who’re brought together to discuss a product.
- personal interviews: one-on-one sessions with consumers.
Offering product samples and dispaly comparison products at these events is a good way to generate discussion.
The range of questions you may raise during a market research exercise will vary from product to product or service to service. It should include questions to determine:
- Preference: flavours or features
- Consumer behaviour: How often will people use it?
- Pricing: How much will people pay?
A first and easy step you can do to improve your market research is to turn your initial customers’ feedback into data. Keep a record of the feedback you receive from new customers and compare customers’ preferences and complaints. This will give you a data set from which you can start drawing conclusions and shaping strategy.
Before you take action on any of the information above, we recommend consulting with a qualified business advisor that understands your unique needs and situation for your specific business and/or personal plans.