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Read More »8 Market Research Strategies used by Marketing Professionals
If you read our tutorial on how to conduct market research, you are already on your way to finding a great business idea. This tutorial goes deeper into details about specific market research tools and strategies you can use to help you make even better decisions.
Let's get started with the 8 tools and strategies used by the best market researchers, marketing professionals and entrepreneurs.
1. Primary Research - this is data collected specifically for the problem to be researched.
For example, if you wanted to know why users of Anytime Fitness didn't renew their membership, you would need to collect primary data to find out why. Alternatively, if you wanted to find out why Anytime Fitness members chose to do join rather than all the other options available to them, primary research is needed. Depending upon the information needed and the budget constraints, primary research can be highly valuable, although can be costly.
2. Secondary research - This is the all-purpose tool used in market research.
Alternative to primary research, if you wanted to find out the population size of potential fitness club members of an area, you can find this information from secondary research. Secondary information has the benefit of being cheaper than primary although it is limited to strategy-specific research questions.
Secondary research is the easiest and most common form of researching a market.
There are two kinds of secondary research:
- external, and
- internal
When starting to investigate your new markets, the first question you should ask yourself is, "Does someone else already have the information I am looking for?" If the answer is "Yes" then you are conducting secondary research.
Just as the name 'secondary' implies, someone else has conducted the research and is making it available to you.
Probably, you will start investigating new markets using "external secondary market research."
Common market research tools for external secondary market research include government information like the:
- United States Census Bureau (http://www.census.gov/) ,
- The Centers for Disease Control (http://www.cdc.gov/) or
- Statistical Abstracts of the United States
- Survey of Current Business
- Industry reports compiled by the American Marketing Association (www.ama.org).
- The American Medical Association
- Other types of external secondary research tools include information published in magazines, journals and online, like the Wall Street Journal or Forbes.
- Google searches would be an additional example.
If you already have a database of customers and a track record of customers' purchasing habits, this represents 'Internal secondary research', including sales reports, Google analytics or customer databases.
3. Data driven marketing (a.k.a., “big data”) is a relatively new term and an evolving form of secondary research.
Data driven marketing is largely web based and usually falls into the secondary research category.
For example, if you use Google Alerts to track how often a brand is mentioned online, positively or negatively, this constitutes a form of big data.
Google Analytics offers a prime example of big data in action.
If 1,000 new people visit your website today, or in this hour, a huge amount of data is being captured by Google Analytics.
Google Analytics can help you sift through user behavior patterns starting with where the user came from to what page they landed on to what pages they clicked on (navigation) and the page the person decided to exit, or the path the user used to make a purchase. Google Analytics also tracks precisely how long this process takes.
As Artificial Intelligence (AI) and the Internet of Things (IoT) evolves the amount of insight gained from data driven marketing will continue to grow, at an exponential level.
4. Customer visits is a form of qualitative research.
This is a fantastic way to explore new opportunities.
Customer visits are exploratory and typically consist of face to face interviews. This is possibly the best option for generating new ideas and exploring new thoughts, gaining surprising comments and having an agile dialogue.
Customer visits should not be used to test or select options. The small sample size (N=1) and possible interviewer bias makes it impossible to trust the results of a customer statement in this regard. But, that does not mean customer visits should not be done. This is quite possibly the most important form of market research you can do.
Use open ended questions. Avoid closed-ended questions and
... Listen!... Listen!... Listen!
Be sure to read this article about the German manufacturing company that realized a 7% increase in their revenue growth based on the right number of customer visits.
5. Focus groups - Similar to customer interviews, a focus group is conducted with 8-12 consumers moderated by a professional who has a set agenda that has been carefully developed by the organization sponsoring the event.
It has been said that focus groups are to B2C what individual customer visits are to B2B.
These are extremely important, main exploratory tools to do market research.
Focus groups are conducted in a specially set up room while the sponsoring organizations observes from a one way mirror.
Like customer visits, focus groups are exploratory and focused on information gathering.
Important: Customer visits and focus groups are typically substitutes for one another.
That is, if you do customer visits you do not need to do a focus group, and vice versa.
Like customer visits, focus groups should not be used to select among options due to their small sample size.
6. Surveys - Interviews and surveys are the most heavily used in market research.
Surveys represent a quantitative approach to asking questions while interviews and focus groups provide a qualitative approach.
If the issues you face can be narrowed down into direct questions that can be answered by customers, then surveys and interviews are what you should probably use.
The time for in-depth analysis and discovery is past, as survey research is most commonly done in response to an outcome, such as a customer satisfaction tool or deciding which of two options is more valuable.
Surveys should not be done early in the decision cycle as their primary role is to narrow and specify.
Important: Survey's cannot help a consumer differentiate between what's more important among attributes, or how trade-offs are made (conjoint analysis can).
Today's common survey tools are Survey Monkey, Constant Contact, and Google Forms (which we use for our template in this program).
7. Test! -- This is probably an entrepreneur and professional marketer's favorite form of market research.
This form of research is at a more evolved phase of the decision cycle, long after the exploratory and initial analysis phase.
A form of this option is an A/B split test.
For example, let's say you are starting with a list of 1,000 customers and you want to find out the best sales message to sell your product. A professional marketer would send 500 customers a marketing campaign with sales message #1 against the exact same campaign to the other 500 customers selling the offering with sales message #2.
After carefully tracking and then analyzing the results, the sales message with the most sales wins. When testing different price points or products or services with varying net profit, typically the test with the best return on advertising wins.
Alternatively, email programs such as Mailerlite make it very easy to conduct tests like this to test the responses on email subject lines and offers. Sending mailers, postcards, sales letters, and print advertising is also very effective for testing.
This type of research is highly specific.
8. Advanced: Conjoint Analysis is the newest form of market research and the least commonly used (but growing in popularity), Conjoint Analysis is used to assist in identifying the best option commonly associated with locating the most optimal price point or product configuration.
The exploratory phase has passed as conjoint analysis is used to define the consumer tradeoff between price and performance.
- For example, how much more is a consumer willing to pay for a longer battery talk time or a higher quality camera on their smartphone?
- Or, how much more is a personal training client willing to pay for a private personal training session vs. a semi-private session?
- Or how much is a client willing to pay for a group style training session in an exotic location vs in a warehouse?
Another way to represent conjoint anaylsis is that the customer is asked to go beyond a simple self-report of what is most valuable to them, and are given the opportunity to act toward structured stimuli which mathematical techniques then go to work to understand the preferences based on the attributes chosen. An example of this may be a blue car vs red car vs white with or without a sunroof and with or without a rear view monitor. There are almost endless potential combinations here and would be near impossible to do market research with a conjoint analysis system.
If you are looking to make the best possible decision for multiple product attributes, then conjoint analysis is a critically important component of your research.
Advantages and disadvantages of business research methods
| Method | Advantages | Disadvantages |
| Focus groups and personal interviews | Depth of information collected
Flexibility Generate substantial number of ideas | Requires expert moderator
Can be costly Potential for bias Small sample size |
| Telephone surveys | More cost effective than personal interviews
Data collected quickly Control of the data collected | Resistance in collecting data
Abuse by phone solicitors Limited depth of responses |
| Mail surveys | Cost effective per completed response
Data collected quickly Control of the data collected Ease of administration | Resistance in collecting data
Abuse by phone solicitors Limited depth of responses Lack of control following mailing |
| Internet surveys | Low cost
Quickly executed Real time data processing Ease of responding for end-user | Responses must be checked for bogus info, duplicates
Limited ability to qualify respondents and confirm responses |
| Observation | Can collect sensitive data
Different perspective than survey self-reports Useful in studies of cross cultural differences | Appropriate only for frequently occurring behaviors
Unable to assess opinions of attitudes causing behaviors May be expensive in data collection time costs |
What are some market research tools?
The first place to look when making a list of market research tools are within the places your marketplace does business. This could be Amazon, Walmart, Google, bing or a host of other locations.
In addition to target market specific resources such as trade journals or specific websites our customers may by from, here’s a list of market research tools and resources we visit often:
- Google alerts
- Google analytics
- Google search
- Google trends
- Google forms and surveys
- Amazon best sellers
- Government resources
- Customer lists
- In house customer databases
- YouTube
- eBay best sellers
- Website marketing and online advertising
- Email marketing
- Surveymonkey
- Constant Contact
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