How to Conduct Customer Research for Your Business Plan - dummies

How to Conduct Customer Research for Your Business Plan

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

To paint a clear picture of your customer for your business plan, undertake research activities. Your efforts may involve customized efforts tailored to your business clientele, or they may rely on available market analyses, called secondary research, which you can apply to your business situation.

The approaches and budgets vary widely. What never changes is the need to know exactly who is apt to buy from your business, how to reach those people, and what to say when you have their attention.

Compile an analysis of your customer

Large companies commit huge budgets to conduct customized market research. Fortunately, simpler and cheaper ways to obtain a picture of your customers are available. Consider the following ideas:

  • Stop, look, and listen. You can discover plenty simply by observing customers. If you deal with customers in person, note how they arrive, what they wear, whether they arrive alone or with others who share in or influence their decisions, how long they stay, and what interests them and motivates their purchases.

    If you’re in the retail business, watch where they go inside your store and what products they linger over the longest. At industry trade shows, watch which exhibits attract the biggest crowds. In any setting, conduct informal surveys by asking prospects about their reactions to various products, services, and features.

  • Create a dialogue. If you’re thinking about improving a product or developing a service, invite your best customers into the creative process. Ask what they like and don’t like about existing offerings. What would they change? What features would they add?

    Additionally, use your website, social media pages, or online survey services such as SurveyMonkey to request input. Consider offering a small gift, membership in your customer VIP club, or a special offer in return for customer opinions.

  • Go virtual. If your customers are far-flung, consider a virtual focus group by arranging for selected customers to meet in an online chat room or web conference to discuss a particular aspect of your product or service. Your social media networks are a good place to issue invitations. As in a traditional focus group, involve a moderator and offer participants some token of thanks for their time and ideas.

The better you know your customers and their purchase interests and motivations, the more success you’ll experience in your marketplace.

Cast a wider net

Supplement your customer and prospect knowledge with secondary research:

  • Contact your industry association and the major media groups that serve your industry to obtain their analyses of the consumers in your market arena. Also, inquire within your industry about other research reports or analyses of customer and business trends in your business arena.

  • Search the Internet for purchasing trends in your business arena. Publishers and authors can track which books are selling well. Winemakers can follow which vintages customers are snapping up. Consultants can research the hottest business topics. Digital gadget makers can survey customer reaction to cutting-edge technologies.

    To tap into a wealth of consumer opinion, visit review sites used by customers in your arena and read the range of rants to discover what people love and hate about offerings like yours. If you aren’t sure which sites to study, enter the generic term for your business, along with the word “ratings” or “reviews.” When you find sites where customers post opinions, visit regularly for useful information.

  • Put the Google Adwords keyword planner to work. See which terms related to your products and services people are searching for. For example, you may discover that 190,000 people recently searched for “red Mercedes convertibles” and only 1,100 people searched for “blue Mercedes trucks.” By discovering what people are looking for you can better identify your customer interests.

  • Visit the reference area of your public or university library. It most likely has copies of the otherwise costly SRDS Lifestyle Market Analyst and the CACI Sourcebook of ZIP Code Demographics. Both resources can help you locate geographic areas with concentrations of residents who match your customer profile, helping you pinpoint regions for business expansion.