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ajor corporations routinely spend hundreds of thousands of dollars on expensive and elaborate market research studies designed to help them better understand target markets and how their products are or should be positioned. These research projects often include mail and online surveys, telephone interviews, and focus groups. They take time and may not truly uncover the information to help management make better, quicker decisions.
Entrepreneurs running smaller businesses know that they also must acquire good market information to enhance their business development. Due to perceived costs and time requirements, this market research is often “deferred.” This can lead to constant worries that management will not know how to reach their prospects and will not produce more profitable sales. These worries may be well-founded, but they do nothing to solve the problem.
The question is this: How do smaller companies gain the market knowledge necessary to effectively compete and grow today? In normally good times and bad!
For many smaller businesses, the cost of even one study from one of the big market research companies, let alone the recurring reporting really required, would exceed their entire marketing budget for a year or more. In addition, there is well-placed concern that the professionals from such firms will miss the mark and not sufficiently focus the efforts to provide the marketing insights the business owners are seeking.
The good news is that focus groups and other involved formal market research studies can be completely unnecessary if small company owners think about what they are really trying to accomplish. It is certainly possible to ask, “How can I better understand my current and future customers and the markets they operate in?”
Little time-consuming market research is required, because you should already know these things about your current customers, and you can learn about your prospective customers. Your business is succeeding at some level and delivering part if not all of what the customers want. You would not have acquired the current level of sales with them without delivering benefits they value. Even if you have not precisely formulated what this is, you probably know more than you think and can certainly ask a select group of customers a few simple questions to get them talking about “Why they do business with you today.”
(As you do that, look for what it is that they “believe” about themselves, their company, their customers, and their market. Think about what it is that they “desire” to have happen each day. Ask how they are “feeling” about themselves and their actions in the marketplace.)
Trust yourself and your marketing team. You know more than you think you do ... and are closer to learning additional information that can make the difference as you design your marketing plans and develop new products for the future.
Management research has shown that many if not most decisions are driven by emotions and then justified analytically. (Think about the last few larger decisions you made. How did you really make them? And what did you do to “confirm” your decision?)
This can all be done with only a small amount of money spent on market research as long as the company constantly works to understand current and future customers. This same method can be applied to new markets by determining the answers to these questions: Who are the decision makers? Who are the key influencers? Then figure out what they believe in, what they really desire for themselves and their companies, and how they feel about the various personal and market relationships they encounter daily.
As the market changes, continuous improvement in collecting and organizing market and customer information becomes more critical. Seek to understand: What do they want? and Why do they want it? By uncovering new trends, every small business owner can add the information necessary to make better marketing and sales decisions.