Market Research on the Cheap

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We teach them survey, focus groups, in-depth interviews," says Hai Che, marketing professor at UC Berkeley's Haas School of Business. "That can be a high-quality but low-cost method."

4. Survey online. You can select from an array of Internet survey companies to get a quick take on a product or service. Some online polls are free for a limited number of responses. The premium version from Zoomerang, at $599 a year, allows unlimited surveys of your existing customer lists. For extra fees, you can tap into the company's global panel of 2.5 million people and tailor your survey to specific niches. "We offer the ability for companies of any size to select samples of a particular group," says Pam Kramer, chief marketing officer of Zoomerang's parent company, MarketTools. Kramer says purchasing a sample runs around $1,500, but the narrower the group you want to sample, the more you'll pay.

Vizu, which places survey questions in banner ad spaces on blogs and Web sites, can target polls based on the audiences of those sites. "If they want to access business people or tech enthusiasts, we'll limit where we place the poll," says Vizu Chief Executive Dan Beltramo. Marketing experts caution that using online samples may not be as accurate as professionally selected panels. But Beltramo says Vizu's results line up with national polls. For entrepreneurs looking to test a concept before acting on it, online surveys can provide a quick and cheap solution.

5. Create an online community. Web-based businesses in particular can set up and moderate panels online to glean insight from customers. Forums or live chats reveal customers' experience with your product or perception of your brand. If you already have a database of customer information, you can handpick which customers to invite to the forum to get the sample you want.

"Community management is less expensive than traditional market research consulting," says Barry Libert, co-CEO of Mzinga, which creates and moderates customer communities. The company's self-service option, in which the client moderates the community, costs $1,000 per month. Another player in the customer community space, Networked Insights, charges several thousand per month, based on the number of interactions users have in the forum.

Dan Neely, Networked Insights' founder, says companies value being able to gather information directly from their communities. "It's not just small businesses, but businesses all over are looking for tools to let them do the research themselves," he says. The online community provides that tool, he says. "It's like having 500 of your customers standing in a room chatting and you just get to stand there and listen."

Most survey companies like Vizu or Zoomerang offer templates for questions, and marketers suggest asking several iterations of your question to get a sense of how reliable your data are. Even with do-it-yourself solutions available, hiring a professional market research firm can be worth the price. You might test an idea with some homespun queries, but formal surveys provide more precise data to inform a potentially costly decision. Adams, of the Moot Corp competition, advises companies to budget 5% to 10% of their startup costs for market research before making a bigger investment. "I'd rather find out after spending $10,000 that nothing's there, than find out after I personally guaranteed a lease," he says.

Tozzi covers small business for BusinessWeek.com.