Information is one of the most powerful tools available to a business. Regardless of the size of your business, it is vital that your knowledge of your customers is as deep as possible. Without such knowledge you cannot hope to effectively market your product. Similarly, you must have a comprehensive understanding of your own offerings and sales methods. Effective research can help you to identify aspects of these processes that need refining, and provide clues as to how you can improve your profitability.
Before you begin, you should address one very basic but fundamentally important question: what do you want to learn? Simply 'doing research' with no clear goal in mind is a waste of time and money - you must have a definite idea of the aims of your research.
For example, do you want to find out why customers do not return to you for second or third purchases? Do you want to determine how user-friendly your website is, and the ways in which it could be improved? Do you want to find out what demographic the bulk of your customers come from? Each of these questions will require a different research method, but the principle remains constant and bears repeating - research is useless unless you know what you want to learn.
The research method you choose will therefore depend on the nature of the information you wish to gather, and the nature of the business itself. In order to make an informed decision, you should first look at the range of methods available.
Customer surveys are an efficient way to gain an insight into your customer base. It is possible to glean a huge range of information from this type of research, but success depends on the number of people you survey and the quality of the survey itself.
In the first instance, you must decide who you wish to survey. The best way to approach this is by asking yourself, 'Who has the information that I need?' It may be, for example, that your customer base is made up of several distinct groups, or it may be that they are fairly homogenous. Generally surveys will target a few different subsets within the entire group.
If your 'sample frame' (that is, the entire range of individuals from whom you will select your prospective respondents) is made up of customers with a variety of unique relevant characteristics, you should ensure that your sample set is broadly representative. This is generally achieved through random selection, but this is not always appropriate; there are perfectly viable reasons, for example, that you would wish to concentrate on an individual subset in order to gather the relevant information.
You also need to consider how best to conduct the survey itself. In many cases face-to-face interviews are best, but these will not be feasible or necessary in every circumstance. Your options will generally be limited by resources and by the contact details you have for the members of your sample sets. Written surveys are generally the most popular because of the low costs involved. However, they present a number of significant difficulties; particularly, there is no chance for respondents to ask questions, or for you to offer clarifications. As such, it is very important that the questions are phrased precisely and presented in a suitable order. Many organisations choose to employ survey experts to ensure that they get this right.
It should also be remembered that response rates to marketing surveys are traditionally very low. You may well find that you need to offer some incentive to your potential respondents, but prior to this you should ensure that you do all you can to make sure the survey is easy to complete and return. This includes providing postage-paid return methods, and keeping the survey short. You may also consider following up with a telephone call or written reminder to encourage a response.
Finally, there are a number of principles that should be considered when you are writing the survey itself. Survey questions can be split into two types: open and closed. Open or 'free text' questions allow the respondent to write what they like, while closed questions require them to make a choice from a set of potential responses. Open questions can provide more valuable, accurate answers, but they are difficult to analyse in bulk. On the other hand, closed questions are easy to quantify and analyse but can produce sub-par answers.
If your business provides products or services that require interaction on the part of the customer, or if you rely on a website as an intrinsic element of your business, you should consider usability testing.
Usability testing allows you to test your purchase processes on real people outside of your business. If you have been at the heart of the development of this product or service, you may well find it difficult to step back and consider its usability from the point of view of your customers - that is, individuals with no prior exposure to it. Usability testing should, if performed properly, give you an accurate idea of how user-friendly your product is.
Usability testing aims to determine and record the ways in which users interact with a product, and to identify areas for potential improvement. The process normally focuses on four areas: the tester's performance (how quickly they can perform the task intended), accuracy (how prone users are to mistakes while using the product), recall (how efficiently they can remember the process after use) and emotional response (how they feel after using the product).
In order to produce useful results, usability testing must be carried out in a controlled and scientific manner. The most popular method is known as 'hallway testing', in which a cross-section of the eventual intended user group participates. The participants are asked to perform a relevant, real-life task and are monitored while doing so. This is frequently achieved through 'think aloud protocol', where the participants are asked to talk observers through their thought processes. It should then be possible to assess their actions in comparison to the four criteria outlined above.
Usability testing usually occurs in several stages; each version of a product is tested individually, with the findings being applied to the continuing planning or design process.
Focus groups have developed a rather poor reputation outside of the marketing industry in recent years, as they have become virtually synonymous with the antics of bumbling politicians. However, this research method provides some important commercial benefits to those companies that can run them effectively.
Focus groups provide an opportunity for your business to test out new marketing methods, products, names, designs, ideas - in fact, almost anything that can be communicated face to face. Rather than launch a new product or marketing campaign only to find that it does not appeal to your target market, focus groups allow you to sound out your ideas before committing. The idea of a focus group is to spark a discussion around the items you want to test. This helps the subjects relax and give more candid opinions.
It is important that focus groups are run in a systematic way, and moderated by experts. This type of research produces data which is by nature difficult to quantify. Group members may stray off topic, and they will certainly not provide answers within a strict framework such as that set by a written questionnaire. However, the trade-off for this complexity is the breadth and quality of data that can be obtained. Responses from focus groups, in which participants can say what they like with few set boundaries (a little like a perpetual, verbal 'free text' box) can be far richer than those gleaned from written surveys.
Unsurprisingly, focus groups can be expensive. There are many agencies specialising in providing focus group participants, and the best of these are able to fulfil very specific requirements. However, you should remember that both the agency and the participant will require payment. You may also consider advertising publicly in your local press for focus group members, thus cutting out the agency - but this is only suitable for groups which do not require participants with particularly specific characteristics.
Research is a vital process for any business that hopes to increase its knowledge of its customers, and thereby improve its interaction with them. Although it can be expensive when professional third parties are involved, it is possible to perform research on a shoestring budget. You simply need to be a bit more creative in your approach.
The ultimate goal of your research, as with every marketing activity, is to increase your conversion rate. Taking a little time to construct a sensible, pertinent research project can yield significant benefits in terms of sales volume and profitability. Continuing this research regularly will ensure that you are in the best possible position to grow and expand your business.