SCORE column: Research provides tools for resilience, growth
As a resource partner of the U.S. Small Business Administration, SCORE - which offers free business mentoring and education - notes the organization has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964. The nonprofit SCORE was previously known as the Service Corps of Retired Executives. Market research is the starting point for developing your strategy.
In last month’s article we stressed the need to grow your business.
Growth gives you resilience in an ever-changing marketplace. Market research is the starting point for developing your strategy to find your ideal customers and to become their long-term vendor of choice. Market research is gathering information about your consumers, potential consumers, and their preferences. Market research also identifies customers you do not want. There is a lot of information available that is easy to get and at a low demand on your time and budget.
A good place to start is with your existing customers. What can you learn from your internal data that’s been documented in your customer relations management program? Who on your staff talks to the customers’ people? Is there a regular review of their websites and internet postings?
Customer surveys can answer key questions. The questions focus on how did the customer find you, what were the determinants of the decision to buy and has the product lived up to their expectations. Be prepared for both good and critical comments. Incentives may increase the quantity and quality of responses These can be designed to be cost free. One technique might be a discount if you buy one, the next one is 10% lower or if the margins are right — buy one get one — BOGO.
I liked visiting and interviewing clients. The purpose was not to make a sales pitch but to say thank you and to learn about how trends in their industry and company focus. Also, how could we better serve them. We would also pull their annual reports if the company were public.
Develop a template of the Buyer’s Persona. This is not a technique to manipulate people, it is to better understand the person and how best to adapt your interaction to have a win-win result. How well do you really know their key decision makers? Listing demographics such as the person’s family, hobbies and vacations, is important and helps build the relationship.
Developing psychographics is more important. How and why a person does things and what pressures they are under at the job enables you to focus on helping them be successful. This is a team effort and should include all in your business that have contact with the customer. We found that people making deliveries got a sense of what’s happening at some of our customers. Again, this is not to manipulate, but to be a more effective associate.
SWOT — strengths, weaknesses, opportunities, threats — analysis of your competitors. Are they becoming a bigger or smaller player in the marketplace. What can you learn from their website and internet postings? Have they changed their focus or are they expanding the product line. Are they increasing their served market area? How do they differentiate from you? Do you have the opportunity to visit with them at trade shows or Association meetings?
Refence libraries. There is a lot of information to be found here. I use the Hennepin County Library because they allow one to get a card remotely. They have two databases that have an unbelievable amount of information. The first is Mergent Intellect. This replaces the Dun and Bradstreet Million $ Directory. I like to get the First Research report by Industry, which is an analysis of the economic conditions either in a specific area or nationwide. The other is the Key Business Ratios, which are developed by SIC code. The database has more precise data but this is also available on the Reference Solutions database, which I prefer to use. Let me summarize some of what you can retrieve for this resource.
A report on that business, including SIC/NAICS (Standard Industrial Classification and North American Industrial Classification System) codes.
You can find companies with that same code(s) in your area or nationwide.
There are demographics on consumer lifestyles. This ties into Buyer Persona.
There are listings of people that have recently moved into a selected area.
You can find the companies competing with your customers.
And, much more. It’s worth learning how to use the database.
Finally, I have found the reference librarians to be very supportive.
Market research is critical to developing your marketing plan. Information is power and there is a lot to be had with very little expense and time commitment. Have fun and good digging. SCORE is here to help.