If you’ve ever considered doing market research but the amount of money you’d have to spend upfront has held you back, you are certainly not alone.
Usually, only firms of a certain size have a budget consequent enough for market research. If you are a much smaller mom and pop business or even a one-person show, market research can seem so expensive that it hardly seems worth the effort. But come on, you’re not going to throw in the towel that easy, are you?
The reality is, there are lots of great options out there for sourcing solid business intelligence data without breaking the bank. Not having the cash reserves to spend is not really a good enough reason not to engage in market research anymore, especially these days.
We’re here to tell you it is possible! For those still in doubt, here are our top ideas to do market research on a shoestring.
1.Collect information from every transaction
Every company collects data on their customers, not to mention their customer transactions. But how many are using this effectively and are able to optimize the strategic and day-to-day operations of their business?
Your customer data is a virtual goldmine. It can reveal so much about who your most valuable customers are, where you can find them, what they buy from you most often and sometimes even what they are likely to buy from you next.
But if you collect it poorly, infrequently or inconsistently, you are never going to use it to your best advantage.
The first step is to acknowledge what you have, and regularly collect information. Do you know enough? If not, you need to expand the range of what you are collecting from each customer transactions.
Capture useful information from every transaction, systematically. Don’t be left wondering what might have been.
2.Focus on quality
The next step is to look at the quality of your collected data. This is an essential requirement for a small business database. Have you ever heard the saying, ‘Garbage In … Garbage Out?’ Well, that applies to your customer data.
If you can, have your staff at the point of sale ask customers if their details are up to date. If you operate primarily online, you might need to be proactive with systematic customer contact telephone calls or email.
You are aiming for 100% accuracy here … or as near as you can get … so it’s worth investing a little time and effort.
Having a regular set of data quality metrics that you collect on the same day of every month can help you keep track of how well you are doing with keeping the data ‘clean’ (i.e. without missing data, duplicate information or misspellings).
Producing regular data quality reports also helps to inform these processes. These are automatic functions in most CRMs, but you can also use a simple Excel spreadsheet.
3.Use your data to truly inform your business operations
You’ve collected as much data as you can manage and you’ve cleaned it as best you could. Now it’s time to take a moment to explore how you are actually using it.
Is there more you could be doing with it? Are there ways you could analyse it that would impact and boost your business? Are there any value-adds to be gained by looking at it a little differently?
If you don’t know, think about hiring a college student to run some reports or even enroll in a free online course yourself that will get you thinking about your business intelligence data and how to apply it. You might be surprised how quickly it will start paying for itself.
4.Take advantage of cheap (or free) available industry research
While it’s true that some aspects of market research directly relate to your customer data, it’s equally important to consider what information is out there about your industry.
Free information about industry trends abounds. It’s really about knowing where to look. Most industries regularly release economic outlooks, sometimes every quarter, summarizing key trends. While sometimes you can pay a fair deal to get a very detailed analysis in the reports, often the high-level overview and an executive summary are available for free.
Bloggers in your industry also offer a free source of information about the latest trends, sometimes uncovering new information before the official channels get up to speed.
Trade journals, social media channels and conference proceedings can also be a treasure trove of affordable industry information … and if all else fails, why not consider a visit to your local college or community library? There’s no telling what gems you might uncover there.
5.Utilise free tools to survey your customers
Half the battle with market research is not knowing where to start. And before free survey tools like Survey Monkey appeared, many companies would have given up at the first hurdle, daunted by the task of having to design, implement, collate and analyse market research survey data all on their own.
But the fact is, it’s just not necessary to reinvent the wheel anymore. Why would you, with the functionalities built into most online survey software now, pre-developed question sets and automatic reporting of results? The best part? It’s generally available free of charge. Sure, if you want to get fancy with it there might be a fee, but in general, the market insight and extra functionality you gain is well worth the asking price.
6.Share the love
Question: What’s harder than figuring out market research? Answer: Trying to figure out market research all on your own.
Many small businesses share customers with other businesses in similar, aligned markets. Think doctors and physiotherapists. Hairdressers and nail salons. Dog groomers and dog walkers. You get the drift.
Look to form alliances with other small businesses in the same boat. It might be that you can share information about your customer base that will lead to new insights for both of you (all within the bounds of your privacy agreements with your customers of course). Or perhaps you can club together to buy an expensive industry report or a few hours of researcher time.
7.Use your social media channels to best advantage
There’s never been a better time to engage with your target audience on social media, and every indication is that this trend shows no sign of slowing down.
The advent of social media changed the marketing landscape forever. Suddenly, individual businesses are able to reach many more potential customers in new markets, with messages tailored directly to those potential customers.
While some businesses are tempted to jump on the bandwagon of every new social media channel around, it pays to hold back and do your research first. This is one of those situations where spreading yourself too thin will certainly be counterproductive. Better to work out which channels your preferred customers like to engage with you on, and be sure to maintain an active presence there.
Be sure not to overdo it though – social media is a conversation, not a monologue. Be open to feedback about how and where you can improve, and demonstrate this in your public interactions with your customers. It will win you new fans.
With technology becoming ever so much more sophisticated and the channels across which you can connect with your market proliferating faster than anyone can keep track of, basic market research has become much cheaper and easier than it used to be.
In fact, so much so that one could well ask the question – can you afford not to be engaging in market research? Although the exact ROI is sometimes complex to trace, the fact remains that a better understanding of your target market, and by extension your ideal customer, is always one of the most effective ways to grow your bottom line.
About the author:
Parker Davis is the CEO of Answer 1, a leader in the virtual receptionist and technology enabled answering services industry. He believes that the application of data analytics, investment in technology, and fostering a positive company culture together create highly efficient and scalable growth companies. In 2016, Answer 1 will achieve record revenues while also being awarded the Top Companies to Work For in Arizona award. Parker is also the Managing Partner of Annison Capital Partners, LLC, a private investment partnership.