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How to do market research on a budget

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I am a big fan of market research and it has undoubtedly informed some of the best business decisions I’ve made but, when you work for a small organisation, the costs can be astonomical.

Desk research uses existing information such as economic data or sector-specific surveys, some of which is freely available on the intranet. Unfortunately, you have to pay for other sources of information. It’s worth knowing that the British Library Business Centre subscribes to a range of valuable resources, including Mintel, Verdict and Factiva (the full list can be found on our website), all of which can be accessed for free in our reading room. Public libraries also have subscriptions to some of these, so it makes sense to check what is available.

Bespoke studies can range from a survey on the company website to focus groups or even a complex quantitative study to determine the price elasticity of a product. If an important decision is riding on the outcome and you can find the money, it usually makes sense to hire a good market research consultancy.

If money is tight, here are a few hints:

Write a proper brief: This applies whether you are doing the work yourself or hiring a professional. It doesn’t matter how small the project is, it’s always worth taking the time to write down exactly what you want to know, who you want to speak to and what you are going to do with the results. The more, detail the better. I always list every question I am going to ask.

Don’t use research to prove that you are right (or that your CEO is wrong): This is probably the single biggest mistake DIY researchers make. Market research is only valuable if you approach it with a genuinely open mind and listen to what people are saying, even if it isn’t what you want to hear. I am amazed when competitors on The Apprentice undertake so-called market research (usually a master class in how not to do it), completely ignore the negative feedback about their cardboard chest of drawers or whatever it happens to be and are then astonished to find themselves in the boardroom facing the wrath of Lord Sugar.

Don’t ask leading questions: Pretty much anyone who has run a focus group has fallen into this trap and said something along the lines of: “You may not be sure about it now, but what if we changed the colour/shape/size? That would make it better, wouldn’t it?” Most people want to please, so even if they can’t see the point of your product in any colour, shape or size, they may go along with the suggestion to keep you happy. Always keep questions neutral and avoid phrasing that allows for a simple yes or no answer.

Don’t expect market research to give you the answer: Done well, market research will give you invaluable insight into the needs and motivations of your customers, but what it won’t do is tell you what to do – that’s your job. For example, a focus group of runners will say that they like listening to music when they run, but what they won’t tell you is that they want an iPod.  

If an idea isn’t working let it go: This is the really important one. Know when to stop flogging a dead horse, otherwise there is no point doing the research in the first place.

Frances Brindle is the British Library’s director of strategic marketing and communications. The British Library Business & IP Centre (BIPC) hosts events and workshops to help SMEs and growth businesses, focusing on e-marketing and growing your business on a shoe-string. The BIPC advises thousands of budding entrepreneurs on how to protect their ideas and nurture their brands. For more information, visit www.bl.uk/bipc

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