Understand Your Customers by Using Market Research
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Access to accurate, unbiased information about your customers is critical. But the complexity and scale of market research can make it seem daunting. Does that mean it’s only for large companies? Nakasone doesn’t think so. “I think there’s no size difference for market research. Every company has to know what their customers want and need if they want to succeed. Maybe it sounds expensive, but every company needs customer research.”
Cheryl Vasconcellos, another QMark client, agrees. Vasconcellos is executive director of a community health service called Hana Health and its spin-off, Hana Fresh, which operates a certified organic farm, a commercial kitchen and a farmers’ market. Despite the diversification, Vasconcellos says her operation is still small. “Our annual budget is only about $3 million, and I’m stressed all the time.” In other words, Hana Health is like thousands of other small businesses and nonprofits in Hawaii.
Nevertheless, Vasconcellos is a strong advocate for getting the data. “We’ve used marketing research significantly for lots of different projects,” she says. For example, both Hana Health and Hana Fresh use surveys called community-needs assessments to find out what services and products Hana residents want and will take advantage of. “We also use them to track our progress,” Vasconcellos says, “to measure results from one needs assessment to another. For example, one of our objectives was to increase the amount of fresh produce in the community diet. Every couple of years, we’ll check in to see if we’re having the desired effect. It turns out we are. Through surveys, we’ve found the community has increased its consumption of fruit and vegetables by a whole serving a day. It may not sound like much, but it is.”
Hana Health has also used market research to get more community feedback on the nonprofit’s plans to introduce assisted-living and senior-housing services. “We’ve done focus groups of seniors in the community as well as care-givers,” she says. “We also had questions on our annual needs assessment about whether they would use those types of services: Is someone in your household going to need senior housing in the next year or five years? What are you willing to pay for those kinds of services? Etc. We got some really good information from that research. Our strategic direction changed from an assisted, independent-living project to possibly a group-home type of situation. That’s something we can make work from a cost perspective.”
Can you afford it?
Cost, of course, is a critical issue for small businesses. Can you afford to use market research? Vasconcellos thinks you can’t afford not to. “I think it’s a question of priority,” she says. “If you’re really interested in knowing about your target market, research needs to be a line item in your budget, just like a fiscal audit is every year. Yes, it can be expensive, but it will help you build revenues. For us, it’s been very helpful in securing grants.” She also points out that research doesn’t have to be all that expensive. QMark, for example, offers something called an omnibus survey. This is a large consumer survey that QMark conducts regularly. Clients who can’t afford their own survey can add questions to the omnibus survey. They pay $640 a question, with three or four questions typically needed to make the information useful to the client. That price covers all the costs of scheduling and analysis. More important, it includes critical demographic information about those surveyed. That makes it a cost-effective way to learn about your customers.
Vasconcellos recommends deciding what your budget is, then looking for a market-research firm that will work with you. They’re the experts, after all; tell them what you want to know, and let them figure out how to get that information in the most efficient way. SMS chairman Hersh Singer notes, “I’ve written proposals for $300,000 and I’ve written proposals for $3,000.”
Singer also likes to turn the cost question on its head. He points out that consumer research, done properly, should always be worth your while. “Marketing’s goal,” he says, “is to maximize the return that a corporation can make on its investment. The money that you spend on research should provide you with a return of at least ten times your investment. If you spend $10,000 on research, that should give you a return of $100,000.”
Of course, sometimes the return on investment for market research isn’t income. “Sometimes, the research we do for you will show you how to make money,” Singer says. “Or, in some cases,” he adds with a wink, “we’ll tell clients, ‘Don’t do it. The research says, if you build it, they will not come.’ ” Either way, you’re better off. After all, the money you don’t spend on a bad investment is still money in the bank.
Monitoring Your Customers Online
Large corporations use powerful software such as Omniture to monitor what customers are saying about them in the blogosphere and on social-media sites like Facebook and Twitter. For small businesses, these tools are likely too expensive or sophisticated to be useful.
But, according to online marketing expert Mary Fastenau, president of StarrTech Interactive, there are plenty of free or low-cost alternatives that will help small businesses learn more about their customers online. Google Analytics, for example, can tell you how customers are referred to your website and what they do while they’re there. Here’s a list of free programs and services Fastenau says small businesses should look at:
Social Mention: Software that lets you research what people are saying about your company or set up alerts.
Klout: Track social influence by others.
Peer Index: Similar to Klout, it measures authority, activity and audience, and allows users to compare levels of interaction and messaging to peers.
TweetReach: Allows users to analyze how “far” a tweet has traveled in the Twitterverse, based on total exposure and number of user impressions. It also calculates potential for a tweet to be seen.
Formulists: Allows users to organize and monitor follower activity; helps to identify buzzworthy topics and where you can contribute to the conversation; tracks your company’s most “chatty” followers and identifies potential social-brand ambassadors for increased online visibility.
Some low-cost digital options with their lowest monthly fees:
Ubervu ($49.99): Search and reporting, graphic, video monitoring, sentiment-detection functionality.
Viralheat ($9.99): search and reporting, graphic, video monitoring, sentiment detection and influencer analysis (Klout integration).
Trackur ($18): tracking blogs, RSS feeds, tweets, images and video; can track spikes/drops in buzz for proactive marketing response.
PostRank ($5): Recently acquired by Google, it provides engagement scores on how well content convinced users to take an action, and integrates with Google Analytics.
Market Me Suite ($5): similar features to Hootsuite, CoTweet and TweetDeck; recommended for small businesses needing a tool to manage and monitor social media, create targeted leads, and build relationships.
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