How to do your market research on a shoestring budget

By Jane Frost on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

In business, commissioning market research may seem intimidating or even unnecessary when you’re on a tight budget.

(SMEs) often think it is only for big business, but this is far from the truth. Customers can be difficult whether your company is big or small. They have their own vocabulary, their own ‘goods and services’ and can have very fixed perceptions.

In fact, with relatively low budgets and restricted resources, smaller companies may have more to gain from early and effective insight into their customers, and yes, it can be done a shoestring budget. It isn’t about cutting corners, it’s about thinking intelligently and flexibly from the outset.

According to figures from the Federation of Small Business, SMEs account for 99.9 per cent of UK businesses. With so much resting on these economic powerhouses, it is vital they understand how to benefit from customer insight. Done well, it can enable informed decisions which ultimately – through better customer understanding – leads to better design of ideas or communications and grow profit.

When conducting research, it’s always important to carefully consider what you want to learn about your customers and how best to do that. Choosing the right researcher, however small (and there are many one-person consultants) is crucial.

To get the best results, treat your researcher as a partner and invest time with them to ensure they understand you and your business. The more you put in, the more you’ll get out of the process.

Find a consultant or agency that is prepared to be honest with you and be ready to take their advice on board – the good news about what you’re doing as well as the less flattering feedback.

Below are a few extra pointers to get started.

Examine what you already have

Begin at the beginning by analysing the data you already have access to.

You might be surprised about what you already know about your customer base, or potential customer base. Businesses often forget that they are already sitting on customer data.

If you have it, you’ll need to establish how good it is. Check there isn’t bias in it by considering what sort of questions you asked (did they lead towards a specific answer?), how you did it (did the method favour a particular group over others?), and who you asked.

Organise data appropriately before considering adding any more to the mix. By analysing what you already have and thinking about how you can feasibly use it, you’ll be in a position to identify the gaps and give a much tighter brief to your research provider.

Remember to keep GDPR in mind when handling customer data.

Quality over quantity

Prioritising the quality and usefulness of each piece of research rather than simply collecting as much information as you can is sage advice, particularly for SMEs. A huge amount of data is one thing but it’s not much use until it is properly interpreted.

It’s not the information itself that will help you to achieve actionable insight, but the questions you ask of it.

Take advantage of free resources

There’s lots of data out there that you can access without incurring costs.

The Census contains a surprising amount and is an ideal place to start. Royal Mail’s excellent and accessible MarketReach database is useful if you’re thinking of using direct mail in your marketing.

Social media is clearly a great place to establish what matters to your target market, but it must be approached with caution and an awareness and understanding of your sample.

Those who are particularly expressive online represent a relatively small and unique group, so bear in mind that more private or reserved people could be overlooked. Not all age groups use all social media, and some don’t use any at all.  Make sure you’re not missing out on customers by relying too heavily on one data source.

Think flexibly

There are also ways you can adapt your own behaviour to gain insight into your target market. Don’t underestimate the power of qualitative insights (put crudely, talking and listening to smaller groups and individuals) alongside numerical data and trust the instinctive steer such observation gives you.

Something as simple as looking through your target audience’s preferred newspaper can help. This is part of a process to continue listening to your customer in their context. Staying curious about them isn’t just fun, it’ll keep you to stay ahead.

“Don’t underestimate the power of qualitative insights”

This flexible approach to what constitutes valid research is vital for businesses who may be struggling with smaller budgets. By thinking flexibly and realising that useful research is not beyond their reach financially, SMEs have everything to gain.

Jane Frost CBE, CEO of the Market Research Society (MRS)

Further Resources

How to use market research to make smart marketing decisions for your business – Mentor, speaker and author Katie Tucker on understanding your customer better and creating research-driven product awareness strategies.

8 Templates to Plan and Organize Your Market Research – These free templates from Milanote include a Brand Positioning Map, Customer Personas, SWOT analysis, and other classic market research projects.

20 Market Research Tools (With Importance and Types) – A comprehensive list covering data analysis, software, and competitive intelligence resources from Indeed.

Why market research is so important for a start-up business – Eric Brandenburg of market research company Marketest, looks at how unbiased research will uncover the merits of a new product to a market.

Smart marketing tips for start-ups – Advice on creating a consistent, varied and impactful marketing strategy.

And also, checkout this succinct explainer from OnStrategy on How to Conduct a Market Analysis in 4 Steps

The post How to do your market research on a shoestring budget appeared first on Small Business UK.