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Do Crucial Market Research For Free, On Your Own
By Shel Horowitz, for Hostedware Corporation
Is market research only for big corporations with deep pockets?
No, actually, any business can put simple market research
into place, and get about 80% of the benefit of the big, complex,
expensive methods, without paying a penny.
Why Market Research Will Help Your Business
In my own one-person business, I've used informal market
research to:
- Determine where ad dollars were effective, and where they
were wasted. As an example, I advertise in several local
Yellow Pages directories. By tracking which ads drew how
many customers, over a period of years, I've been able to
drastically increase the return on my investment, because
if an ad doesn't work, I don't renew it. If I weren't tracking,
I could still be paying every month for several directories
that I tried but that didn't produce for me.
- Get crucial feedback on new product development, testing
titles, packaging, price points, and even whether a market
even existed for products I was considering, that has saved
me many thousands of dollars I could have spent developing
the wrong things. The title and cover of my newest book,
Principled Profit: Marketing That Puts People First, are
vastly better than the originals as a direct result of soliciting
feedback from many, many people. And the price point, high
enough to ensure a decent profit and low enough to sell
as an impulse item, was also based on research.
- Understand why different marketing approaches were succeeding
while others failed. Early market research, for instance,
helped me understand back in 1995 why the mall and bulk
e-mail models don't work well online.
Let's look at my new book as an example, because it illustrates
a number of different types of market research that you can
do on your own, without spending any money.
When I got the idea for the book in August, I sent some notes
to business and publishing discussion lists to gauge, in general
terms, whether there was sufficient interest to do the book.
In the past, I'd received lukewarm response to some of the
products I was thinking about creating, and this helped me
decide to put my energies elsewhere. This time, feedback was
very positive, so I started writing. Then I thought I had
a great title, but I was feeling unsure about the subtitle.
I asked directly for feedback on my possible subtitle choices,
and discovered that there were large segments of my target
market that absolutely hated my main title. This began a two-month
process of brainstorming, narrowing down, putting possible
titles out into the world, and rejecting them. Was there a
title for this book?
Once I had a title, I had to choose a cover. My designer
worked up several very striking, but controversial, designs,
and none of them really told the story of what the book was
about. Once again, I turned to my online support groups. His
covers evoked strong emotions; people either loved them or
hated them. (You can see one of his early concepts at www.accuratewriting.com.
My goal was a cover that got at least a 60% positive rating
from this original group.
After a while, I decided the original focus group had been
over-exposed to the concept and was no longer reflecting the
market. Fortunately, there are many places on the internet
that overlap with the market for this book, so I picked a
new focus group.
Meanwhile, the cover designer selected a concept that is
a bit less dramatic, but received about an 80% approval rating,
and has a good deal more to do with the book. We went with
it. You can see a low-resolution version at www.principledprofits.com
(the final cover in full detail is too big to display on the
Web).
It was exhausting, but it was worth it. Of the hundreds of
people who have commented on the final title or cover, only
one didn't like it. The book is much better positioned in
the marketplace, as a direct result of this feedback.
From past experience, I can tell you that the wrong title
and wrong cover are very expensive mistakes for a publisher
to make. An earlier book that I didn't road test sufficiently
took seven years to sell 2000 copies, and I think the cover
and title were a lot of the problem. This time, not only do
I expect the book to do a whole lot better, but many of the
people who helped along the way will feel so much a part of
the project that they will evangelize it for me, a nice side
benefit of all the market research.
How to Do Your Own Market Research
Getting information from your customers and prospects is easy!
Here are a few of the many possible techniques:
- Ask! If you bring people to an event, ask for a show
of hands about how they all learned about it (don't forget
"from a friend"); if you book clients for appointments,
ask at the time they make the appointment; if you run a
retail store, let each cashier keep a tally of what brought
the customer in, and how much was purchased (an easy way
to do this: pre-print some 3x5 cards where the cashiers
can check off the source and write the dollar amount).
- Join online discussion groups where your customers hang
out. Post to the list that you want feedback on a new product
or packaging idea.
- Set up a web page on your own site to collect feedback.
- Use tools like www.HostedSurvey.com,
which allows you to set up your survey online, hook it to
your web site or email invitations to your customer list,
collect responses, view reports and download the data to
your own computer - and that don't cost you an arm and a
leg.
- Try a real-life test. For instance, offer a choice of
free reports on the same topic. The one that gets the most
responses should be the name of your next product.
- Use codes. In any direct-mail campaign, advertisement,
or online medium, you can know exactly what caused your
customer to respond. For instance, an ad would specify a
response to PO Box 1164-B1, while a particular rented list
might be directed to PO Box 1164-N17. Web pages can have
tracking codes built right into the URL, so you can analyze
them later in your statistics package.
- Check out what others are doing. Before I settled on a
price for my new book, I visited several bookstores, looking
at other titles appealing to the same market. And in a different
industry, years ago, I considered leading specialized tours
of certain New York City neighborhoods. I contacted the
NYC Convention & Visitors Bureau to find out about tours
that already existed, and quickly decided this was not a
market I could afford to enter, because I live three hours
out and there were dozens of fascinating tours already,
at rock-bottom prices. Because of my early research, when
I abandoned the business idea, I was out only about two
hours of my time and the cost of a phone call to the visitor
center. Far, far better than investing time, energy and
money to develop brochures, work out the tour routes and
narrative, and do all the marketing, only to discover that
there was no market for what I wanted to do.
How can you put these tools to work in your business? I bet
you can think of at least a dozen ways.
Shel Horowitz, internationally known marketing
consultant, copywriter, and speaker, specializes in affordable,
effective marketing for small businesses, entrepeneurs, and
nonprofits. The author of the award-winning Grassroots Marketing:
Getting Noticed in a Noisy World and five other books, he
is the owner of (www.frugalmarketing.com).
If you'd like to discuss your next marketing project with
Shel, please visit his site or contact him at shel@frugalfun.com,
413-586-2388.
Hostedware
Corporation is a pioneer in providing online software
solutions for research, education and performance improvement.
Hosted Survey and Hosted Test are used by human resources
professionals, market researchers, education and training
organizations and membership associations worldwide.
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