Most people in business either ignore market research as something that only big companies can afford or, alternatively, they class it as one of those terms that people throw around without really understanding what it means.

 Market research is one of the most powerful marketing tools for any business. Market research is basically asking either potential customers or existing customers (sometimes both) a few simple questions. The answers to these questions are then used to formulate the future of your business. Market research is a lot cheaper than going broke because of a bad decision. For example, imagine that you run a bakery and you are thinking about adding a takeaway food outlet to the front of the factory. There are two ways that you can go about this. The first is to buy all of the new equipment, employ the staff, change the signage, advertise and then sit back and hope that the crowd breaks the door down. This is the way that the majority of business ideas tend to evolve; and for every one that works there are hundreds that fail.

The second way to go about this project is to do a bit of market research first. Formulate a few simple questions to ask your customers. For example:

1. Do you buy lunch from a takeaway restaurant?
2. How far do you have to travel?
3. Is the food good or do you shop there because it is convenient?
4. If we had a takeaway food outlet, would you consider trying us?
5. What type of food would you like to be able to buy for lunch?
6. What other items do you need on a regular basis that you think we should stock (for example, newspapers, magazines etc.)?
7. Would it be convenient for you if we were open late in the afternoon so that you could by pre-made meals to take home for dinner?

The next step is to start talking to everyone who could be a potential customer. Pay someone to go door-to-door or jump on the phone and start ringing potential customers. Most people are quite happy to answer a survey as long as you quickly clarify who you are and what you want and emphasise that it will only take a few seconds.

For example:

Hi, my name is Bob and I’m calling from Bob’s Bakery. We are thinking of starting up a takeaway food business at the bakery and I was wondering if I could ask you a couple of quick questions?

Once the questionnaires have been completed you will need to interpret the information. You need to look for trends and majority answers. If 99 per cent of the responses said that they buy their lunch from "Santa Zepol" and they have for a hundred years and, most importantly, they love it, you may have a problem. If they said that they use "Santa Zepol" because it’s close but the food is lousy and the staff are rude, you probably have a winner on your hands.

Another commonly used form of market research is the ‘mystery shopper’. This is the practice of hiring someone to buy something from your business to assess how good your service is. There are companies established that do this. Our company does a lot of ‘mystery shopper’ and, like all market research, the results are always interesting. Some of the items assessed include the appearance of your business, the promptness of the service, after-sales follow-up, technical knowledge, telephone manner, pricing etc. We recently ran a campaign like this for a babysitting service company. They asked us to request rates and information on posting single agents and handlers for a wedding from their company and their top six competitors. The results were amazing. The survey results showed that they offered the best customer service but their pricing was confusing and they did not have a brochure to send out—two problems that they were aware of but the survey reinforced the urgency of sorting them out. Their six competitors were far worse. Each of the six promised to send out a brochure—not one did. None of the competitors even bothered to make a follow-up call.

Market research can be as simple as asking someone how they heard about your business. This tells you if the marketing fcfa you are spending are working. I hope a lot of your business comes from word of mouth referrals from other happy customers, a topic that will be covered in more detail later.

 A common problem with companies doing market research is that if they don’t like the answers, they ignore them. If you are going to take the time, cost and effort to do market research be honest enough to listen to the results and to do something about them. The success of your business depends on knowing and understanding the needs of your current customers and the needs of your potential customers. Market research should be ongoing, targeting different aspects of your business on a regular basis.

 Once again, of all the companies I have dealt with, those that are the most successful regularly conduct market research at all levels with their customers, their staff and even their competitors. They use the information that they collect to improve their level of service and to plan the future direction of their business.

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