Conducting Market Research

There are many advantages to hiring a professional consultant, and you will probably get more meaningful results. Professional researchers are more objective and are trained to detect potential errors. In addition, people are more likely to trust an independent consultant and therefore may be more inclined to participate in these research efforts.

If your budget does not permit you to hire a consultant, it is possible to conduct some research yourself by developing and mailing questionnaires or carrying out telephone interviews. Be aware, though, there is a risk people may fear you are selling something.

Focus groups provide more reliable results if you have a good facilitator and quality participants. Be sure your facilitator knows what questions to ask. He/she should also know how to guide discussion so that all participants' views are heard, not only those of the dominant group member.

Omnibus surveys allow you to share research costs with other companies and reach a large audience. You should ensure, though, that the survey will reach your target customers. Review a profile of the research audience and other organizations that are using the survey to ensure they match with your business. If so, it could be a cost-effective solution.

Telephone interviews allow you to rapidly obtain feedback from customers in a cost-effective manner. These types of interviews are especially useful for assessing customers' response to product or service changes or for measuring awareness. One potential challenge of telephone interviews is that people may fear you are selling something and therefore decline to participate.

Tips for success are:

• Define your target audience.
• Draft a questionnaire and carry out pilot interviews.
• Make the calls at convenient times for your audience.
• Immediately identify your research purpose.
• Use emails or faxes, if necessary, to send more detailed information for discussion.
• The Benefits. Speed is a major benefit of telephone research. You can conduct many interviews in a short period of time, allowing you to gather and process data quickly. In addition, telephone interviews are less expensive than personal interviews. They are nonintrusive and easy to set up. While a customer may be too busy for a personal interview, they may be willing to spend some time on the phone.
• The Challenges. You will need to reassure people that you are carrying out legitimate research to get them to participate in a telephone interview. It is also important to limit the scope of your interview so it is not too long—be careful not keep customers on the phone for extensive periods of time. Complex concepts are difficult to convey by telephone.

Focus groups are facilitated group discussions where customers and prospects explore a particular topic, usually under the guidance of a researcher. They are useful for gauging customer concerns or for getting their thoughts on potential changes. The open-ended nature of focus groups can highlight crucial customer issues or insights about which the researcher may not be aware. You should be cautious, though, that focus groups do not constitute a representative sample and participants' opinions can be influenced by a dominant group member.

• The Benefits. Focus groups are exploratory in nature. Because they are loosely structured, the researcher may learn about customer concerns about which they were not aware. In addition, customers often enjoy talking about the products and services they use. They feel they are making a positive contribution through their participation in a focus group.
• The Challenges. Because a focus group does not constitute a representative sample, they can be biased and a dominant group member may influence other participants. An experienced facilitator can help to minimize bias. Focus groups are also best for gathering qualitative data, since it is usually difficult to quantify results.

Tips for success are:

• Include no more than eight to ten participants—this number allows you to maintain control but also get input from a variety of individuals.
• Begin the discussion by welcoming and thanking participants.
• Record the discussion, so that you can go back and review people's comments later. Be sure to advise people that their comments are being recorded.
• Assure participants that their comments will be kept confidential.
• If necessary provide participants with a gift or incentive for their participation.
• To minimize bias, conduct more than one group.
• Hire an independent researcher to run the discussion.

Personal interviews occur when a researcher interviews a customer one-on-one. This type of research is ideal for getting detailed information on customers' attitudes or how they perceive products or services. One-on-one interviews also can be useful for obtaining feedback from specifically targeted individuals. A personal interview may be conducted in a customer's home or office, or in another predetermined place.

• The Benefits. Personal interviews allow you to explore complex topics in-depth. Because you have control over the process, you can ensure accurate results. Results may be easier to analyze as well. Meeting your interviewee in a home or working environment may reveal insights about their true behavior or how they use your product or service.
• The Challenges. It can be time consuming and expensive to recruit interviewees. Because sample sizes are usually small, there is a risk of bias.

Tips for success are:

• First identify who you want to interview.
• Be sure to inform the interviewee about how much time is required.
• Hold people's views as confidential.

Mail surveys are quick and relatively inexpensive. They are delivered directly to customers' mailboxes. Because customers can complete mail surveys when it is most convenient for them, they are ideal if you are seeking extensive feedback that will require more of customers' time, for instance customer satisfaction or other detailed surveys. Challenges with mail surveys include obtaining a good response rate, maintaining control over the process, and managing the risk of incomplete responses. Incentives can sometimes be helpful for motivating potential respondents.

• The Benefits. Mail surveys can be completed at minimal cost. You will only need to pay for postage and stationery. They also can be precisely targeted to specific customers or prospects. As they are voluntary, mail surveys do not make customers feel pressured.
• The Challenges. Low response rates are common with mail surveys; you may need to provide an incentive to improve customer response. Incomplete or incorrectly completed questionnaires or surveys are also a risk. The lack of pressure on the customer can slow down the survey process, because people will not return forms in a timely manner. Generally, you will have very little control over the process with a mail survey.

Note that a 5–10% response is normal for a mail survey and 15% or more is excellent. To improve your survey response, tips for success are:

• Offer an incentive, such as entry into a prize drawing, for returned questionnaires.
• Keep the questionnaire straightforward and not too long.
• Reassure the customer that information will be kept confidential.
• Enclose a postage-paid return envelope.

Omnibus surveys carry out research on many topics simultaneously by telephone or personal interview. For instance, one omnibus survey might include questions on a range of food and household goods along with other noncompeting products. Participating in an omnibus survey can be extremely cost-effective if the survey is compatible with your research objectives. They are especially appropriate for measuring customer attitudes and behaviors towards various products and services—especially mass-market products—or for identifying changes in attitude among consumer groups.

• The Benefits. Sharing resources with other companies can be very cost-effective. In addition, omnibus surveys generally have large sample sizes, offering more representative results. This type of research also may allow you to see changes in customer attitudes over time.
• The Challenges. Sometimes other companies or products that are participating in an omnibus survey conflict with your own products. Be sure the survey is compatible with your research objectives. In addition, if the survey is too long, customers may not fill it out completely.

Tips for success are:

• Check to see who else is participating in the survey to ensure compatibility.
• Make sure the length of the survey is reasonable for customers to complete.

Every research method has unique advantages and drawbacks, and which one you choose will depend on your company's research needs. Consider your budget, how fast you need the results, and the depth of information you are looking for. If you are not sure which research method is best for you, you may want to seek advise from a consultant.

All research methods have limitations. Before using research to make a decision, be sure to consider how data may be incomplete or biased. There are proven techniques for evaluating research results.

Never attempt to sell a product or service to a research participant during the course of the research project. You will lose the person's trust and damage your findings.

Churchill, G. A. and Iacobucci, D. Market Research: Methodological Foundations. 9th ed. Fort Worth: Harcourt College Publishers, 2004.

Marketing Research Association: www.mra-net.org