Monday, November 30, 2009

Market Research

Market Research, that is what Coca Cola does when they launch a new drink. We are a small company, we cannot afford to hire Ipsos Reid or Neilson to do research for us! WRONG! Wrong in a way that you DO NOT NEED to hire research pros. You can do it yourself with a bit of creativity, energy and discipline.
Here is a success story about small business market research. A true story. A woman in a mid-size town noticed a beautiful store for rent. 1,400 square feet. Nice size. Best location in town, right on Main Street and next to a very busy cafĂ©. The woman has an interest in fashion, kids are in university, husband away for work, yes, my own store would be great. A shoe store, yes, that is it. I was talking to all my girlfriends, they were excited, yes, we want a great shoe store in town. Done deal. ……. Can I live off my girlfriends buying shoes from me?, forgodssake, I need to sell 2,000 pairs to break even….. Will “normal” people buy shoes from me? There is a national chain store in town, there is Wal-Mart (yeah, we are better than them), there is another independent store that seems to be doing well….do people want a shoe store? Would be nice to know before spending umpteen thousand dollars in inventory. Main Street is very busy on Saturdays. Folks out there shopping. Hmm, why not ask them, the future customers?

The lady prepared a simple questionnaire, only 4 questions. Her daughter and 2 friends went out on Main Street and asked 150 passer buys, right in front of the proposed store, these 4 questions. It turned out….not many people wanted a shoe store but 64% wanted a bakery! Well, apart from fashion, the woman is a hobby chef and has interest in good food. To make the story short, she opted for a bakery. It has been a success. Actually, people say we needed a bakery in town. No regrets about the shoe store.

This is an example, how a small business owner conducted a very simple market research – yielding dramatic results. And the cost: $ 0.00.

Of course, you are not opening a new store every year, but every business needs some kind of market research from time to time. You need to know your customers - who are they? What do they like? Where are they from? How do they rate your business? Don’t you think this is crucial, vital to your business?
Here is an example of what you can do: An ongoing issue for all small businesses is advertising. How do I spend my dollars wisely? How, where should I advertise? Research can help! Your existing customers can be a wealth of information; start a simple routine on cash check out and ask them for their postal code. This will tell you where they live. Trivial. Let’s now assume you offer a unique product for which people would not mind travelling a bit. Advertise this product in the neighbouring town, say in the local paper of this town. As you continue asking for customers’ postal codes, you will (hopefully) notice, that you now have indeed attracted customers from the neighbouring town. Proof that your advertising works. Your cost: $ 0.00.

In short, be creative, think about what you need to know and come up with simple solution to find out. It is easier than you think. Be creative. You won’t need Ipsos Reid or Neilson for that!

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