Startups and small, under-funded companies are often stuck in a chicken-or-egg type dilemma when it comes to market research: They need good market research information in order to make key decisions in order to grow the company and make money; however, they need money in order to do the research to get the good market information in order to make decisions on to grow the company and make money. It’s a common dilemma that makes many leaders of startups feel stuck. They have great ideas, great products, great people, and so need actionable market information in order to move their companies forward, but they don’t have the resources to obtain that information.
Fortunately, startups and small, resource-poor companies can obtain good, usable market information inexpensively through a number of methods and sources.
Below is Part 1- Secondary Information Sources – of this three-part blog entry, Market Research for Startups and Small Companies
PART 1: SECONDARY INFORMATION SOURCES
Secondary research information is that which is already available and gathered either by third party research, or is information that comes from the company’s operations, as opposed to primary research information, which is information that is gathered by the company specifically to answer particular marketing-related questions the company needs to have answered by using a market research methodology. Secondary research information can be a perfectly adequate method for answering many questions a company may have about its market and potential customers, and thus be quite useful in many circumstances.
Using In-House Information
There is a lot of market intelligence that companies can gather simply by accessing their own in-house sources. Any information is better than none, assuming it is accurate and relevant to the task at hand. In some cases, the systematic accumulation and reporting of the information generated by your internal activities – sales records and sales staff, warranty forms, information from your customer support department, and, of course, web analytics – can be a perfectly acceptable alternative to hiring an outside research firm.
Product Registration/Warranty Forms
This information, if your forms request a little demographic information from the customer, can give you a pretty good picture of what your customer base looks like.
If your salespeople are trained properly to probe dealers or customers for needs and attitudes of the marketplace, they can provide a wealth of information. The information from your sales staff is not a replacement for the market research that needs to be done for your critical marketing decisions, but for many types of less critical marketing decisions or market information gathering, it can be a good source.
Customer Service Department/Technical Support Department
The information gathered from customers having complaints about or trouble with your products can, obviously, provide some of the best “marketing research” information you can get your hands on. By employing an ongoing information collection and evaluation system, you can keep a pulse on the satisfaction and usage habits of your customer base. This type of evaluation system, based on the information collected by your customer support department, can reduce the some of the information you would otherwise obtain when you conduct your periodic customer satisfaction monitors with your outside research supplier, and thus reduce the costs of these primary research studies. It can also highlight problem areas you may want to address in a primary research customer satisfaction study.
Tracking and analyzing your own website’s traffic is one of the greatest sources of customer assessment there is. Because an organization’s website is such a key component of marketing (and for e-commerce companies, product or service delivery) for most organizations, seeing what customers and potential customers are doing on your site can give you incredible insights that can be acted upon for continuous improvement.
Because of this, it’s imperative that a tracking system be implemented and that there is either someone in the organization or a consultant who monitors site traffic. This method of gathering customer and prospective customer information is very inexpensive yet can yield outstanding actionable information.
Using Outside Sources of Secondary Research Information
There are numerous external secondary sources of information available to marketers, ranging from free governmental information to relatively expensive information from syndicated research information companies.
There are general categories of secondary research information, and they include governmental, vendors of competitive website data (e.g., Alexa, comScore, CoreMetrics – see below for more detail), online databases, and observation of competitors’ advertising, press releases, website content, and other activities.
One thing going for governmental sources is that the information is usually cheap or even free. This information can be useful for assessing general trends and getting a picture of the current state of an industry. Through this type of information can be gleaned areas of general opportunities in a market. There are numerous governmental reports, and the best first step in determining the report that will best help you is to access various state and federal online sources of business information.
Observation of Competitors’ Activities
One of easiest and best ways of doing preliminary competitive research is to systematically observe competitors’ advertising, both traditional and web. You can also look at their websites to see what their positioning strategies are.
By regularly observing competitors’ advertising and websites you can a pretty good idea of their basic strategies and tactics.
Competitive Website Data – Third Party Vendors
Analyzing the performance of the website is a critical function for any organization. However, in looking only at your website, you are missing an important piece of your true performance: how are your competitors doing? If your website is improving, but you’re still behind your competitors, then you need to be improving even more.
Fortunately, competitive data is easy to obtain in the world of the web. There are several different types of sources of competitive data. These include (examples of providers in parentheses):
• Toolbar data (Alexa)
• Panel data (comScore)
• ISP data (Hitwise)
• Search engine data
• Benchmarks from web analytics vendors (CoreMetrics, Fireclick, Google Analytics)
• Self-reported data (Quantcast, Google Ad Planner)
Most of these vendors do cost money, but the amount and value of the information can make the expense worth it, depending on where you are in your company’s growth.