Do-It-Yourself Market Research

If you observe the law and mind your manners, you may be able to mine the public for information, but sometimes it pays to hire professionals

I wanted to hand out a brief business survey at an industry conference, but the organizer turned me down. I also got a negative response from the hotel where the conference is being held. How does an individual trying to start a business legally conduct market research in a public area? —M.D., Bethesda, Md.

Your question isn't one so much of legality as of etiquette. Hotel lobbies and conference centers are owned and operated by businesses, and most of them do not want their customers exposed to solicitations from an individual or company that provides no benefit to their organization. In addition, managers at industry events try hard to get attendees focused on their objectives, and your research would probably be seen as a distraction.

You're on the right track, however, with your goal of surveying your industry before you start your business. Big companies spend millions on these projects and work with trained, aggressive experts, says Joe Kennedy, author of The Small Business Owner's Manual (Career Press, June, 2005). "You probably can't match their efforts, but be ready for some hard work," he says.

You've got several possibilities. The first would be to buy a booth or table at the conference where you can talk to attendees and hand out your surveys all day long. The drawback here, of course, will be cost. Purchasing, setting up, and staffing a booth can be extremely costly, particularly for a startup company.

Taking It to the Streets

A cheaper alternative would be to set up in a public place such as a park or sidewalk outside the industry conference and ask passersby to complete a brief survey. The catch here is that some cities require a business license for this kind of activity. If you're not blocking the sidewalk, harassing people, or attracting too much attention, you'll probably be O.K. At worst, a police officer may ask you to move along. Still, it's a good idea to check with local authorities to find out what regulations might apply.

Bryan Howe, chief executive of MasterPlans, a business plan consultant out of Portland, Ore., says some of his clients do sidewalk surveys. "Taking into consideration the standard lecture on sample size and bias, this is a very effective way to get a quick street-level read on things like 'How much do you, on average, spend for lunch,' or 'How far do you travel to drop off your dry cleaning?'" Howe says. "I would be careful with any questions regarding income, or more private preferences, so as not to offend touchy pedestrians."

Make sure your survey-takers are neatly dressed in business-casual attire, ask no more than seven questions, and declare the point of the survey up front, so no one confuses them with a political group, panhandler, or charitable organization soliciting donations, Howe says.

Hone Your Approach

If you decide to put together a street team, you may need to hire some help. "We have found the 'gigs' section of Craigslist in a specific city to be a great place to find help," Howe says. "You'll find no shortage of college students and people between jobs willing to make a little cash for a few hours' work." In deciding whom to employ, look for outgoing, vivacious people and avoid introverts. "Think about whether single-response or multiple-response options make sense for particular questions. If you refer to time periods, be specific. Ask about the 'past 30 days,' or the 'past six months.' Also, make sure the response options cover the entire range of possible responses," Howe says.

Make no mistake about it, however, doing market research in public places can be tough. People are wary because "market research" conversations often become sales pitches. Also, your research is generally more valuable if you know something about your respondents, such as their age or income. But those are the kinds of questions likely to discourage subjects from participating.

A gift, such as a free sample of your product or an attractive T-shirt, may overcome resistance, Kennedy says: "I received a gym bag in return for an interview years ago and still use it." If your survey outside the conference is successful and you decide to do additional surveys, think about which geographical areas will expose you to unbiased respondents. "If your new business concerns imported auto parts, you may not get unbiased answers in a small Midwestern town dependent on domestic manufacturers. Universities may not yield a random population sampling if your business sells to the general public," Kennedy notes.

Outsourcing May Be Worth the Money

If you have the funds, an easier and more effective way to gather business data is to work with an established research company. "We advise caution when conducting do-it-yourself studies. If a study is not well designed and executed, it can lead to poor business decisions, which are far more costly in the end," says Jacqueline Brown, director of research and analytics for GCR Custom Research.

You may find less expensive research options through a local college or university business college, or through your local SCORE office or Small Business Development Center. "Depending on the target audience, you may be able to find a business or a nonprofit organization willing to have their customers or members surveyed for a relatively low fee or donation," Brown says.

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