Proven budget-friendly ways to do market research for small businesses

September 02, 2021

Proven ways to do market search on a budget

In the business world, information is gold. Having the right information at hand and knowing how to interpret it can help you avoid some common myths of entrepreneurship. Every decision you make, as an entrepreneur, should be backed up by relevant data. 

This being said, well-executed market research for small businesses can tell you a lot about competitors, customer behavior and needs, market trends, customer satisfaction, reviews on products and services, and so much more. 

All businesses must learn from data, and quickly adapt to current trends, so they continue to thrive. But how do you perform market research? 

As it turns out, there are many methods of market research for small business to help you with that quest. Some of them are used for decades, others have come together with the digital revolution, yet are no less effective.

2 types of methods of market research for small business

Below, we will elaborate on the different types of market research for small businesses you can turn to, depending on your goals and budget.

Primary market research

Primary market research is research conducted by the marketing department in your company. However, if you don’t have a full-time marketing team, it can also be outsourced to a third party. This type of research is also called ‘field research’ because you’re gathering data yourself.

Secondary Market Research

Secondary market research is when you are using already existing data published by other companies, government agencies, NGOs, etc. This is why it’s also called ‘desk research’ – you don’t actually do the research. While it can be useful, it’s not very helpful to small businesses that need real-time information matching the current market trends.

11 ways to do market research for small businesses on a budget

To give you concrete examples and help you start your research on the right path, we’ve asked small business owners to share how they perform market research for small businesses. Read them carefully and choose which one sounds more suitable for your business.

Rely on secondary research

If you’re a small business, you’re not going to need to hire a top-tier marketing firm to go out and do fieldwork for you. There’s lots of research and data that is already available on public forums that you can make use of. 

What we do is we try to find a proxy, i.e. a company that is in the same industry like ours that has already conducted all the primary research. We take the data and research and adjust the assumptions according to our needs. Although this isn’t a foolproof method of collecting data, it’s still better than having nothing and shooting in the dark.

What we also like to do is ask questions on Reddit. People are pretty blunt on that social networking website and we try to ask people about their worst experiences with roofing contractors or home improvement companies and learn from other’s mistakes.

Austin Fain, CEO at Perfect Steel Solutions 

1 on 1 validation call

The technique we use and recommend for clients is a 1 on 1 validation call with targeted prospects. We build a validation script, reach out via LinkedIn and speak with 10-20 people in the target market to collect feedback.

Ken Cook, Partner at The Prepared Group 

Solicitation of customer reviews

One of the best ways that we routinely gather consumer insights and key pieces of data for our clients is through the solicitation of customer reviews. We use a platform called ReputationLync to automatically send out review request emails to our clients’ new and returning customers. These emails help us generate new 4- or 5-star reviews for our clients and gather helpful insights on how to improve the customer experience.

This allows us to get a better impression of the typical customer experience and provides some helpful market research insights concerning the client’s small business. It’s a one-two punch to generate new high-quality reviews and improve the customer experience. What could be better than that?

Niles Koenigsberg, Digital Marketing Specialist at Real FiG Advertising  

Design thinking

A technique I like using for conducting effective market research is design thinking. Understanding and analyzing user problems and then generating ideas that provide solutions, benefitting entrepreneurs as well as consumers.

Using hashtags relating to the topic at hand is an excellent way to find different social media posts for this research. Afterward, you can analyze the posts and discover how people communicate, what they think, what expectations they have, and what their greatest wishes are. Even though this technique is simple, great discoveries can be derived since it is a direct and user-oriented research approach.

David Adler, Founder & CEO of The Travel Secret 

Leverage online communities

In my opinion, leveraging online communities is one of the best ways to conduct market research as a small business owner. Every small business category, from candle-making to construction, has an online community. There are thousands of Reddit threads, Facebook groups, even TikTok accounts that cover nearly every small business niche there is.

Immersing yourself in these communities allows you to discover your competitors’ best practices in real-time, which is vital in our rapidly developing global marketplace. It’s also important to remember that fellow community members aren’t just competitors. They are also collaborators to encourage you and your industry to grow collectively.

Katie Lee, Communications Manager at Hatch 

Use Reddit

Reddit is very essential in containing wide information about certain topics. While it is true that it contains a lot of cat videos, and subtle content, Reddit is a mine for deep conversations and long threads which can be pivotal to your business as well.

Here, you can find pain points, and use these as data for improving your research. Reddit can be overwhelming for some at first, but once you are able to get past that navigating phase, it’s a very powerful tool for any small business to make use of.

Willie Greer, Founder of The Product Analyst 

Use Google Trends

One of the best and most affordable ways to conduct market research for small businesses is to leverage free resources such as Google Trends. I recommend companies utilize this tool, in particular, because it allows you to segment based on time and geographic areas and finds out what people are searching for in those places.

For instance, you can use Google Trends to find and compare search interest for a specific topic in Alaska over the last twelve months. While this is not as exhaustive as paying to conduct in-depth qualitative research, the quantitative information offered by Google Trends makes for a great starting point for companies that wish to judge shifts in market sentiment for free.

George Santos, Director of Talent Delivery & Head of Marketing at 180 Engineering

Throw an eye on the competition

One technique we have found very effective for market research for small businesses is by following as many other competitors on Instagram so that we can see what they are posting about and what seems to be trending. And when we discover a new competitor, we visit their website to see how they are positioning themselves and what product they are offering. This once again proves the importance and benefit of having competition

We also discover new brands when we are searching for influencers. Many people are already sponsored by other brands, so we make sure we know what these brands are offering to these people we may also be interested in sponsoring.

Wylie Allen, CEO of Pinnacle Supplementation 

Social listening

Social media is not only a communication platform but is also a gold mine of knowledge when it comes to the customer experience. That’s why social listening is a key metric to keep an eye on.

By having the right tools to listen to conversations that are happening on social networks about your brand, you’re not only gaining key insights into your market but are also given the opportunity to jump into those conversations and build more authentic relationships with customers or demonstrate how you are looking to keep already existing ones.

Reaching out to customers and acknowledging their feedback is a great way to really show that you value their role in making you a better company.

Matthew Paxton, Founder of Hypernia 

Browse through Facebook groups

Facebook has emerged as one of the most important corporate community-building platforms. If you type your business into a Facebook search, you’ll be able to locate a number of relevant groups.

Some Facebook groups will be hosted by other company owners, while others will be maintained by people who are just interested in the same themes. Browsing through the comments and queries posed in Facebook groups is a great source of market research for small businesses.

Lucas Travis, Founder of Inboard Skate 

Experiments and field trials

This might sound like a really scientific method, and it actually is, but it can also be used in more simplified ways. For example, if you want to find out which one of two landing pages has better conversion rates, you can do an A/B test. Basically, set up two different or two very similar landing pages, then record and measure the results.

Conclusion

Deciding if you should go with primary or secondary market research depends largely on your budget and time. Moreover, if you opt to conduct your own research, the methods you choose should also reflect your goals. That being said, you can always put these methods of market research for small businesses to work in an innovative, modern way.

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