Market research doesn’t have to be sophisticated and expensive. While money can be spent to collect research data, there are many inexpensive ways to collect this data that are easily accessible to the small business owner. Several of these methods are:

Employees

This is one of the best sources of information about customer likes and dislikes. Usually employees work more directly with customers and hear complaints that may not make it to the owner. They are also aware of the items customers request that the business doesn’t offer. They can probably also give a pretty good customer profile from their day-to-day contacts.

Customers

Talk to the customers to get a feel for your clientele, and ask them where improvements can be made. Encouraging and collecting customer comments and suggestions is an effective form of research. By asking the customers to explain how the product could improve to fill their needs, constructive market research is done, as well as instilling customer confidence in the product.

Competition

Monitoring the competition can be a valuable source of information. Their activities may provide important information about customer demand that were overlooked, and they may be capturing part of the market by offering something unique. Likewise, small business owners can capitalize on unique points of their products that the competition does not offer.

Company records and files

Looking at company records and files can be very informative. Look at sales records, complaints, receipts, or any other records that can show you where your customers live or work or how and what they buy. One small business owner found that addresses on cash receipts allowed the pinpointing of customers in his market area. With this kind of information he could cross reference his customers’ address and the products they purchased. From this information he was able to check the effectiveness of his advertising placement. However, realize that this information represents the past. Present or future trends may mean that past information is too obsolete to be effective.

Your customers’ addresses alone can tell you a lot about them. You can pretty closely guess your customers’ life-style by knowing what the neighborhoods they live in are like.  Knowing how they live can give you solid hints on what they can be expected to buy.

In addition, check returned items to see if there is a pattern. Check company files to determine which items sell best, and which sell poorly.

Use creative methods to collect information. All market research doesn’t have to be done with numbers and surveys. It can be done with peanuts, as one creative discount merchandiser discovered. During a three-day promotion the merchant gave away free to customers…” all the roasted peanuts you can eat while shopping our store.” By the end of the promotion the merchant had litter trails that provided information on the traffic pattern within the store. Trampled peanut hulls were littering the most heavily traveled store aisles and even heaping up in front of displays of merchandise of special interest to customers. In short, the merchant learned how they acted in the store and what they wanted and observed their behavior.

The key to effective marketing research is neither technique nor data – it’s useful information. Customers likes and dislikes are shifting constantly so this information must be timely. It’s much better to get there on time with a little than too late with a lot.

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