NFIB

Market Research Can Make (and Save) You a Bundle
04/ 02/ 2002


Two friends of mine recently opened a sandwich shop in our area. They're experienced in the field, having operated a successful sub shop for many years before selling it a few months ago. When I visited their new store, I commented to them that the sandwiches and specialty coffees it offered were quite a bit like another restaurant not far away. To my utter surprise, neither of them had heard of the restaurant even though it was less than half a mile from their location and had to be considered as their main competition. Their new shop has been doing fairly well, but not as well as they had hoped. Can you guess why? In today's Workshop, writer Jeff Moses shows how market research can keep your name familiar.

If they had spent even a few hours on market research, they might have come across the already-successful restaurant near their new location. As a result, they may have chosen a different location, or perhaps changed the types of foods they were offering. At least they would have made informed decisions.

* Often small businesses are so concerned about the details of their own operations that they fail to see the big picture. Marketing research is one of the few times it pays to focus on other people's businesses.

In general, when undertaking market research in a specific geographic area, you should determine:

* The number of people in the immediate area who will be purchasing your products. If the number is large (and if your product is one that customers purchase over and over), the area might support more than one or two such businesses.

* The quality and quantity of competition in the area. How many businesses are like yours? What do they sell? How successful are they?

* How can you take a different slant on the idea that will help differentiate your business from the competition? This could make all the difference.

* Consider taking your marketing directly to the customer. Get out your clipboard and hit the street, interviewing people about their preferences, their usage of the businesses, their ideas for improvements. You'll be amazed by how specific and useful the comments usually are when you interview people directly.

* Also consider interviewing other businesses in the area. They can help you learn the trends of "traffic" and may be willing to share valuable information with you.

* If you're in a developing area, it is essential that you research businesses that will be developed nearby. If, for example, you are about to start a sandwich shop, a large business that is moving into the area could help assure you that lunchtime volume might be heavy. On the other hand, a new deli that will soon be started in a nearby mall could cost you some of the lunch crowd you were expecting.

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