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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | AUGUST 4, 2000 TECHNOLOGY Big-Time Market Research at Small-Biz Prices The Web gives entrepreneurs access to the kind of data that used to cost a whole lot more
Whether online or off, research comes in two flavors: qualitative and quantitative. It's like the difference between art and science. In qualitative projects -- otherwise known as focus groups -- a small group of consumers is probed in-depth on specific subjects, say, your Web site or your advertising strategy. What you end up with is rich, if anecdotal, information about how your customers react to your product or service. Quantitative research, by contrast, is designed to glean "harder" information. A large number of consumers are asked an array of multiple-choice questions, which can then be compared and statistically analyzed, revealing important demographic or psychographic characteristics of your market. In both cases, the Internet is changing things -- especially for entrepreneurs. Focus groups, for example, can now be done online for as little as $3,500 a session, compared with as much as $100,000 for a traditional group. And the same discounts are becoming available for quantitative projects, as well. E-INTERVIEWS. In many cases, quantitative research follows qualitative research. Say you learned from a focus group that consumers are turned off by your Web site's homepage. A subsequent quantitative survey would help you determine if such feelings are shared by your entire target market. Depending on the size of your sample, you might also be able to find out how various perceptions break out by age, occupation, region, income, and other categories. In a traditional quantitative project, a research firm poses questions over the phone to a representative sample of customers. The data is then entered into a file where it can be sliced and diced in any number of ways. The price begins at about $20,000 and can go considerably higher. Fortunately, new Web-based quantitative-research services can chop costs dramatically. These do-it-yourself projects allow you to plug your questions into a template, select a sample of respondents, and submit your questions electronically. Answers come back in about two days, ready to analyze. Lee Rafkin did a quick online quantitative survey last spring, before opening Savos Inc., a Manhattan-based wireless technology and services company that delivers streaming audio to mobile phones. Savos asked a sample of 300 consumers 16 questions, learning what kind of Internet content customers were interested in receiving over the phone. The price tag for the research? About $2,000. Rafkin was so impressed, he has decided to to repeat the process every quarter. LIMITATIONS. Most market-research firms offer some kind of online offering. You'll need to do some work to find the one that works best for you. A good place to get started is the American Marketing Assn.'s 2000 Marketing Services Guide, available free online (www.ama.org). An even longer list is available at Yahoo!-- just use the search term "market research." Even believers like Rafkin admit that the process isn't perfect. "Online research is a powerful tool -- as long as you understand its limitations," he says. The biggest drawback: Internet users tend to be younger and better educated than the population at large. That's not a problem for sophisticated, tech-based businesses. But if you need to get a read on a nontech-savvy target market, real world market research -- with real world price tags -- could still be your best bet.  By Allison Stein Wellner  | | |
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