The issue of spending money on research is a difficult one for entrepreneurs and small companies on tight budgets but an important one. Some new entrepreneurs and small business owners intuitively believe that market research is not needed before launching their new product or service; others believe it will be cost prohibitive and not worth the expense; and still others hope they can get away without either making the effort or spending the funds despite its potential value. However, sounding out prospects’needs in advance can be critical even if funds are truly limited, especially on pricing and positioning issues. Can insight be gained through what is often referred to as cheap “Down and Dirty Research” or is the process so risky as to make the findings suspect?
Most marketing experts will probably take exception to “casual” or informal exploratory work and advise against it but maybe they haven’t faced the reality of being an underfunded entrepreneur. And, in my experience, while I don’t advocate it as the best way to proceed, an informal exploration can often help ferret out a promising way of talking about a new service or product, or, at worst, eliminate approaches which are truly flawed. Such “research” can be done inexpensively by developing a few alternate positioning statements (different ways of wording and rationalizing the benefits) and trying them out on 15-20 people who judgementally appear to be logical prospects. Friends and acquaintances who meet this criterion will have to suffice if money is not available to gather a random sample of likely purchasers for formal focus groups or a 1-on-1 study or to hire a trained group facilitator. Once this phase of the exploratory is completed, the favorite two or three statements can then be put into a web survey of 300 to 400 prospects, whose demographics seem to fit your likely target profile. Names and emails of “likely interesteds” can be obtained by visiting relevant trade shows, talking to retailers in the types of stores which might carry your product, chatting up ad sales people for the type of media where you might run an ad or through relevant Linked In industry groups to which one belongs. Costs can be kept down by using a Survey Monkey or Zoomerang type of online study to confirm the findings of your informal conversations. And while this isn’t the best way to do research, it strikes me as a step worth taking: it could prevent one from going off in a totally wrong direction…… a way to lower the odds of being on the wrong track before spending real money.
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About WilderFormerly the CEO of two advertising agencies working with national marketers, I apply the learning of my 40- year career to entrepreneurs and small businesses who want to speed their sales and profit growth. As both a former CEO, and as a current entrepreneur, I bring a unique understanding of my clients' mindsets to my work. Additionally, I like to help execute the plans and activities we develop during our planning together.