I've Asked You Here Because...

Online focus groups can be a great way to get some quick-and-dirty market research

Last spring, IPnetwork.com, an online marketplace for patents, licenses, and other forms of intellectual property, revamped its site in an effort to boost traffic. It didn't work, and executives needed to know why--fast. They decided to hold a focus group.

Lacking time and money for a traditional research project, the New York company turned to the Web, hiring a consultant to conduct a pair of online focus groups. Twelve days and $13,000 later, report in hand, the company fine-tuned its site, rearranging the home page for a cleaner, easier-to-navigate look and beefing up the news section. The result: Traffic is up and customers are bookmarking IPnetwork.com's page more frequently and staying longer, says Sruba De, the company's Internet marketing officer.

Traditional focus groups--which can cost as much as $100,000 and take months to produce results--have long been beyond most small companies. The Web changes that. Now, the entire process can be done in just weeks, for as little as $3,500 a session. Simply substitute an Internet chat room for a conference room with a two-way mirror, let the participants log on from their own computers, and fire away. According to a recent survey by Harris Interactive, a Rochester (N.Y.) market research firm, virtual groups yield results that are almost identical to face-to-face ones.

Most market research firms have added online offerings, and it's not a bad idea to give them a try. The firm will identify an appropriate cross-section of respondents, provide the software to make the online focus group work efficiently, and design a series of questions to ensure that you get your answers within the allotted time--usually two hours. Just as in a live setting, a moderator will provoke responses, encouraging conversations among participants. Meanwhile, you'll be watching it all in your own private chat room.

Given the brevity of the sessions, it's best to confine your inquiry to one or two topics. Marta Loeb, president of Y-Access, a Boston marketing consultancy, wanted to learn how her staff of 10 could better serve clients. Since most people are too busy to answer questions during business hours, she organized a pair of evening focus groups on the Web. Clients logged on from home, and Y-Access learned that it needed to provide market intelligence later in the product development cycle. The two-year-old company retooled its offerings and landed its largest client to date, more than covering the $18,000 price tag, Loeb says.

There are cases, however, in which online groups aren't the best option. If your customers aren't tech-savvy, or if your product relies heavily on touch and taste, you may be wiser to foot the bill for a traditional group. But if all you require is a quick glimpse into your customers' minds, an online group could be the way to go. Just log on, and let their fingers do the talking.

For more about online focus groups, click Online Extras at frontier.businessweek.com

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