Successful Research Strategies for Your Business

Successful Research Strategies for Your Business

Introduction
All successful businesses need to have a close understanding of potential and existing customers and the marketplace they work in.
This understanding allows you to target customers, sell effectively, compete with
other suppliers and spot new opportunities. Performing market research on potential customers and your competitors will help you to gain this vital knowledge.

You can build a picture of general trends using published market information - from free government statistics and data to paid-for market reports from commercial providers. Your own contacts and sales records can also be a great resource.

You can add to your knowledge by using field research - from surveys and discussions to product tests - to investigate customers' attitudes and examine questions specific to your business.
This guide explains what you need to know about market and customer research, how you can use published information to build your knowledge and how using field research can fill in the gaps.

Customer research: what you need to know
Undertaking customer research on loyalty, satisfaction and service can make a big difference to your business. You'll need to focus your efforts on finding out as much as you can about existing and potential customers. If you can work out how they make their buying decisions, you can adapt your sales methods and techniques to fit your customers' needs.

For business customers, you'll want to know how big their businesses are, what sectors they're in, and who makes the decision to buy your product or service. If you're targeting individual consumers, it may be useful to know such things as their gender, age, occupation, income, lifestyle, attitudes or social class.

For your existing customers, try to find out:
• what they think about your products or services
• why they need your product or service - this may be different from what
you believe
• why they buy from you and not your competitors
• what they think of your prices
• what they expect from you, e.g. reliable delivery
• how they rate your customer service
• how they think you could develop or refine your products or services
For your potential customers, try to find out:
• who your potential customers are and what groups they fall into
• how many potential customers there are
• how much of your kind of product or service they already buy from your competitors
• the criteria on which they make buying decisions
• what it would take to get them to buy from you
• what developments they expect in your product or service
• when and where they prefer to buy
Information on market trends and competitor intelligence

Getting a good understanding of market trends is essential if your business is to make the most of its opportunities and remain competitive. You will need to understand your competitors and keep an eye on what they are doing.

To build competitor intelligence try to get information on:
• Demand for your product or service - is it growing or shrinking?
• General economic and market trends.
• How customer requirements and buying behaviour could change in the future.
• What new products are in your competitor's pipeline - could they make yours look outdated?
• How competitors are changing - what are their plans?
• What competitors offer and the prices they charge.
• How your competitors advertise and promote themselves.
• Any forthcoming legislation which could affect your market.

Using market reports and other data

Once you've identified the information you need, you can start to draw it together.
Initially it's worth looking at information that's already been published, e.g. market reports, official statistics, trade publications, etc.

Some of this information is free, but some you'll have to pay for. You can obtain market reports and other information from a wide range of sources:

• Your local business reference library is a good starting point.
• Your trade association will have information about your market sector and
about any relevant trade publications. Find your local trade association on
the Trade Association Forum website.
• You can read official statistics on the economy, population and social trends at the National Statistics Online website.
• Reports in business magazines and the business pages of national newspapers can be informative.
• Local authorities and Chambers of Commerce can provide local information. Find your local authority through the business link Directory, or find your local Chamber at the Chamber Online website.
• UK Trade & Investment is a useful resource for exporters, with sectoral information for more than 200 countries worldwide. You can read sector overviews on the UK Trade & Investment website.
• The Internet contains a wealth of business data. Search engines such as Google and Ask can aid searching, while directories such as Yahoo make it easy to look for information by sector.
• Commercial publishers of market reports include KeyNote, Euromonitor, Mintel, Datamonitor, The Economist Intelligence Unit (EIU) and Market & Business Development. Reports can often be purchased from the publisher's website.
• Don't neglect your business' own data. Analysing your sales records or levels of enquiries can provide useful insights. Finally, talking to customers and watching how they behave is one of the best methods of market research.


Interpreting market information
Though there's a lot of readily available market information, you need to be
careful how you interpret it.
External data might not be in a useful format to use easily. It may have been
collected for other purposes or be from a range that doesn't tally with your target
market.

Beware of out-of-date market information. This can be misleading, as the market
may have changed significantly since the information was published. It can be
particularly hard to tell how recent any information published on the Internet is.
Some information on the web can be unreliable or biased.
Remember that statistics can sometimes mask the true picture. For example, an
"average" income for the population in your area might conceal a mix of very high
and low earners - meaning fewer people can afford your product than it appears.
The same principle applies to your own sales records - one or two major
customers could distort the picture.

Most of all, don't make up your mind in advance. Finding market information that
simply confirms what you already believe is easy - but only a realistic picture of
your customers and markets will be useful to your business.
The basics of quantitative and qualitative field research
Published market information and your own data can tell you a lot about your
customers and your market - but it's unlikely to tell you everything.
Field research can be quantitative or qualitative:
• quantitative research provides statistical information - for example, how
many potential customers there are and what their average incomes are
• qualitative research examines people's feelings and attitudes towards your
product or service, and what motivates them

You'll probably need to carry out some of your own quantitative and qualitative
field research - talking, observing or carrying out product tests with customers
and potential customers. This can help you to:

• test customers' reactions to a new product, and adapt it if necessary
• investigate attitudes of customers and potential customers
• find information specific to your business or a local market, rather than the
market as a whole

Planning field research
Good planning is essential if you're to get the right results from field research.
First you need to decide how to collect the information you want. Popular
methods include:
• A survey, using a fixed set of questions - the most effective way of
carrying out a survey is typically with face-to-face interviews, but phone
interviews and postal surveys are also possibilities.
• A discussion - discussions are good for qualitative research as they allow
you to explore people's attitudes in more detail. Discussions are often held
in small focus groups.
• Observation - investigate what people do rather than what they say. For
example, look at how shoppers react when they pass a particular point-ofsale
display.
• An experiment - you might, for instance, run a blind taste test of your soft
drink against your competitors' products. Alternatively, you could lend your
new product to a customer and ask for feedback.
Once you've decided how you'll gather the information, you'll need to work out
how to make it happen. Budget how much time and money will be needed - the
time involved will normally be significant.

You'll need to design your research. For example, drawing up a questionnaire or
deciding how you'll run a focus group.
Then there are the logistics. If you want to carry out street interviews, make sure
your researchers have the required local authority licence and identity card. If
you want to run a focus group or conduct face-to-face interviews or product tests,
where will you hold them? Where will you find the participants? And who'll run the
session?

Consider carefully whether you've got the skills in-house to do this. If not, it's
probably a good idea to get a market research agency to do your research for
you.

Tips for successful field research

Ask the right questions
Badly phrased questions produce misleading results. Avoid closed questions
which encourage the answer "yes" or "no". A stationery shop that asks customers
if they intend to buy pens in the next year will find out just that - but they won't
discover what type of pens, eg specially engraved pens or cheap biros.

Talk to the right people
A survey at a railway station, for example, will get answers from commuters, but
if you're targeting people who stay at home with young children, this won't be
representative of your market.

Talk to enough people
A survey, for example, of two people won't get you enough information. Some
market research professionals suggest asking at least 150 people in order to get
a complete picture.

Keep research impartial
It's easy to encourage people to give the answer you want. For example, by
asking leading questions or smiling at the "right" answer. Discussions, where
you're not working from a list of set questions, are particularly easy to distort. And
in a focus group, individuals with strong opinions may influence the views of
others.

Interpret results with care
You need to make sure you draw the right conclusions from your research. Bear
in mind that people may distort answers in the hope of affecting what you do. For
example, they might say they would be interested in a product "if the price was
lower". Qualitative research - where you're investigating feelings and attitudes -
can be particularly difficult to interpret.

Be realistic
It can be tempting to pick out results that confirm what you want to hear, and
ignore the rest. But ignoring negative results could damage your business. Be
prepared to modify your plans if necessary.

market research agency.
Should I use a market research agency?
Though you may be able to do your own field research, it may be better to use
the services of a market research agency.
• It may be more cost-effective to outsource the job to professionals
Market research professionals are likely to get better results. They have
experience in designing survey questionnaires, running focus groups and
asking the right questions.
• Customers may find it easier to be honest with an outsider, particularly if
they have a complaint.
• Customers may worry you're trying to sell them something if you conduct
the research yourself.
• You may find it difficult to be impartial, particularly if people criticise your
business.

For small-scale field research, your best option may be a freelance researcher.
A Market research agency won't usually take on projects with a budget below
£3,000.

As well as recommendations from business contacts, you can search for a
market research agency on the Research Buyers Guide website.
Before taking on a market research agency or a freelance researcher, investigate
their reputation. Ask for a list of previous clients and contact them for feedback.
Check the agency has relevant experience and consider how comfortable you'd
feel working with them. And get a clear idea of fees for the services you want.
Check the agency's researchers fit the image of your business. If they'll be
carrying out street interviews, confirm they'll have the required local authority
license and identity card.

Make sure you provide a thorough and clear brief. This needs to cover areas
such as the business objectives behind the project, the information the research
should uncover and how you intend to use the results.

I can help you with this if you like.

My details are below:

Ken Ajoku
Business & Marketing Advisor

Website: TheKajokuGroup.blogspot.com
Mobile: 07956 515 868