How do I take a customer survey? How can I do market research?

Market research doesn’t have to be complicated. But it does have to be done. If you’ve got a business, you probably do some market research every day when you interact with your clients. There’s a lot to learn in that small talk.

Business owners need to know the answers to some fundamental questions about what their customers think. Here’s a short list, courtesy of the U.S. Small Business Administration.

• Who are my customers and potential customers?

• What kind of people are they, demographically and by interests?

• Where do they live?

• Can and will they buy, and at what price?

• Am I offering the kinds of goods or services they want at the best place, at the best time, and in the right amounts?

• Are my prices consistent with what buyers view as the product's value?

• Are my promotional programs working?

• What do customers think of my business?

• How does my business compare with my competitors?

The better you know the answers to each of these questions, the more you can improve your product or service. We suggest trying to answer these questions in small batches, rather than all at the same time. You’ll have too much data to crunch at once.

Research On Your Terms 

A market research firm will usually charge around $5,000 to $10,000 to do a market research study for your business. If you’re not prepared to spend that kind of money, you can do the basics yourself. Good market research is systematic. The SBA, again, offers a seven-step process for conducting research.

• Step One: Define the Problem

• Step Two: Set Objectives, Budget, and Timetables

• Step Three: Select a Research Type, Method, and Technique

• Step Four: Design Research Instruments

• Step Five: Collect Data

• Step Six: Organize and Analyze the Data

• Step Seven: Present and Use Market Research Findings

First, you need to know what problem you’re trying to solve. Are you launching a new product? Trying to get people to do more business with you? Improve your image? Break into a new market?

Once you know your goal, you can figure out what to survey or test for. You may find yourself test marketing a new product with samples at a store, or changing the prices on your services.

The SBA describes two types of research; “Primary research or original information gathered for a specific purpose and secondary research or information that already exists somewhere.” Secondary research comes from public sources like the Internet, the US Census Bureau, and the local Chamber of Commerce. Secondary research is inexpensive. Primary research involves surveying and testing your customers. And that almost always costs some time, money, or both.

Use what you've got 

Before considering surveys or field experiments, you can look at the information you already have. You may have sales records, complaints, receipts, and other records that show where customers live and work and how and what they buy. Addresses are particularly powerful when you can match those with an understanding of the real estate market. The price of a house can be an indicator of household income and other economic factors -- you don't have to do the data analysis yourself, there are subscription services available which allow you to see these demographics.

Here are some tips for building a survey questionnaire.

• Keep it simple. Include instructions for answering all questions included on the survey.

• Begin the survey with general questions and move towards more specific questions. Keep each question brief.

• If the questionnaire is completed by the respondent and not by an interviewer or survey staff member, remember to design a questionnaire that is graphically pleasing and easy to read.

• Remember to pre-test the questionnaire. Before taking the survey to the printer, ask a few people such as regular customers, colleagues, friends, or employees to complete the survey. Ask them for feedback on the survey's style, simplicity and their perception of its purpose.

• Mix the form of the questions. Use scales, rankings, open-ended questions, and closed-ended questions for different sections of the questionnaire. The form or way a question is asked may influence the answer given. Basically, there are two question forms: closed-ended questions and open-ended questions.

Close-ended questions - Respondents choose from possible answers included on the questionnaire. Types of close-ended questions include:

• Multiple choice questions which offer respondents the ability to answer "yes" or "no" or choose from a list of several answer choices.

• Scales refer to questions that ask respondents to rank their answers or measure their answer at a particular point on a scale. For example, a respondent may have the choice to rank their feelings towards a particular statement. The scale may range from "Strongly Disagree," "Disagree," and "Indifferent" to "Agree" and "Strongly Agree."

Open-ended questions - Respondents answer questions in their own words. Completely unstructured questions allow respondents to answer any way they choose. Types of open-ended questions include:

• Word association questions ask respondents to state the first word that comes to mind when a particular word is mentioned.

• Sentence, story, or picture completion questions ask respondents to complete partial sentences, stories, or pictures in their own words. For example, a question for commuters might read: "My daily commute between home and office is _____ miles and takes me an average of ______ minutes. I use the following mode of transportation: _______."

You can do your own market research, but you’re going to have a personal problem if you do – bias. You’re going to be emotional about your business and you’re going to think you know the answers before you step back and analyze your customers’ behavior.  It’s hard to be objective and dispassionate about entrepreneurship for most entrepreneurs. An ability to ignore a discouraging word is a job requirement.  Try to be as scientific as possible in gathering your information. Don’t lead people into the “right” answers.

The survey will probably give you some self-evident answers, but you should look for relevant data that focuses on your immediate market needs. The SBA advises erstwhile surveyors to analyze for consistency – compare the results of different methods of your data collection. If the market demographics provided to you from the Chamber of Commerce and local media don’t match with your survey pool, you might need to question the validity of your results.