4 Mistakes Small Business Owners Make With Market Research
Small business ownership presents a variety of challenges, and one of the most daunting can be formulating an effective marketing strategy.
Do you utilize paid advertising avenues? Do you stick strictly with free social media marketing?
Regardless of your platform, doing thorough market research can help you ensure that your efforts are worthwhile and highly effective. In turn, this can help you to better identify your customer base and determine methods to expand your business.
However, if you don’t know how to effectively implement and utilize your market research, all your efforts will be lost. Here are four mistakes small business owners often make with market research:
1. Not Asking the Right Questions
When undertaking a market research initiative such as a customer survey or comment card, make sure you’re asking the right questions. Keep your questions short and to the point, and limit them only to the specific data you seek.
Rather than asking open-ended questions, provide a multiple choice survey that includes relevant answer choices. And don’t just offer “Yes” or “No” for responses – include additional choices such as “Not Sure,” “Don’t Know,” and “Not Applicable” to ensure that you receive more detailed results.
Open-ended questions such as “How was our customer service?” are also unlikely to get you a specific response, and may often be left blank. Change this question to “How would you rate our level of customer service?” and include a list of applicable responses, from “Excellent” to “Poor.”
2. Not Using the Data
If you’ve been in business for a while, you may believe you have a pretty good handle on your target market and what kinds of products and services they want. Therefore, if your market research contradicts your opinions, you may be tempted to simply disregard the data.
This is a mistake.†Remember, market research generally provides no bias, and is truly objective data. Therefore, take the research at its word and use it to improve your business. For example, if your market research shows that there’s an untapped younger demographic that you’re not fully reaching out to, you could adjust your product line or services to engage that market.
3. Limiting Yourself to Qualitative Research
There are two distinct types of market research: qualitative and quantitative. Yet many small business owners limit themselves to the qualitative portion and nothing else.
Qualitative research, such as focus groups and customer interviews are great, but quantitative research presents a wide variety of benefits, including allowing you to collate and analyze your data in a more streamlined fashion.
Examples of quantitative research include customer surveys or questionnaires that have quantitative, number-based answers.
4. Overestimating the Cost
When you think of the term “market research,” you may envision expensive initiatives via third-party vendors. However, that couldn’t be further from the truth. In many cases, market research can be obtained virtually free of charge.
For starters, check the U.S. Census Bureau website, as well as the Business Data and Statistics page at the Small Business Administration website. You can also gather data on your own via customer surveys and focus groups, both much less expensive than traditional paid market research.
When it comes to market research, it is important to keep an open mind. Investing in market research is a great way to expand your business, but it only pays off if you have the wherewithal to institute changes in your business accordingly.
Act on the findings of your market research by adjusting your current business operations, and you will likely reap the monetary rewards in the long run.