Introduction to Market Research

Introduction to Market Research
Good instincts and intuition certainly play important roles in business. But gut feelings about your
customers' needs and preferences aren’t enough. If you want to minimize risk and improve your chances
of success, you need sound, objective data. That's where market research comes in.
Market research is the process of collecting and analyzing information about the customers you want to
reach, called your target market. This information provides you with the business intelligence you need to
make informed decisions. Market research can help you create a business plan, launch a new product or
service, fine tune your existing products and services, expand into new markets, develop an advertising
campaign, set prices or select a business location.
Types of Market Research
Market research methods fall into two basic categories: primary and secondary. Your research might
involve one or both, depending on your company’s needs.
Primary research involves collecting original data about the preferences, buying habits, opinions and
attitudes of current or prospective customers. This data can be gathered in focus groups, surveys and field
tests.
Secondary research is based on existing data from reference books, magazines and newspapers, industry
publications, chambers of commerce, government agencies or trade associations. It yields information
about industry sales trends and growth rates, demographic profiles and regional business statistics.
Using Market Research
Market research allows you to pinpoint a host of key business factors about your market. It can help you
identify:
o Growth trends in your business sector
o Size of your target market
o Best location for your business
o How your business stacks up against the competition
o Factors that influence buying decisions
o Degree of demand for your product or service
It also can reveal key information about your customers and prospects, including:
o Their demographic profile
o The types of features or special services they want
o What they like and dislike about your product or service
o How they use your product or service
o How often they buy and how much they will pay for your product or service
Once you analyze the results of your market research, you'll be in a better position to create a focused
business plan, develop a targeted advertising campaign, set competitive prices, select a new business
location or take other steps to grow your company.
Market-Research Techniques
Market research can provide critical information about the buying habits, needs, preferences and opinions
of current and prospective customers. While there are many ways to perform market research, most
businesses use one or more of five basic methods: surveys, focus groups, personal interviews, observation
and field trials. The type of data you need and how much money you?re willing to spend will determine
which techniques you choose for your business.
1. Surveys. Using concise, straightforward questionnaires, you can analyze a sample group that represents
your target market. The larger the sample, the more reliable the results.
o In-person surveys are one-on-one interviews typically conducted in high-traffic locations such as
shopping malls. They allow you to present people with samples of products, packaging or
advertising and gather immediate feedback. In-person surveys can generate response rates of more
than 90 percent, but they are costly. With the time and labor involved, the tab for an in-person
survey can run as high as $100 per interview.
o Telephone surveys are less expensive than in-person surveys, but costlier than mail. However, due
to consumer resistance to relentless telemarketing, getting people to participate in phone surveys
has grown increasingly difficult. Telephone surveys generally yield response rates of 50 percent to
60 percent.
o Mail surveys are a relatively inexpensive way to reach a broad audience. They're much cheaper
than in-person and phone surveys, but they only generate response rates of 3 percent to 15 percent.
Despite the low return, mail surveys are still a cost-effective choice for small businesses.
o Online surveys usually generate unpredictable response rates and unreliable data because you have
no control over the pool of respondents. But an online survey is a simple, inexpensive way to
collect anecdotal evidence and gather customer opinions and preferences.
2. Focus groups. In focus groups, a moderator uses a scripted series of questions or topics to lead a
discussion among a group of people. These sessions take place at neutral locations, usually at facilities
with videotaping equipment and an observation room with one-way mirrors. A focus group usually lasts
for one to two hours, and it takes at least three groups to get balanced results.
3. Personal interviews. Like focus groups, personal interviews include unstructured, open-ended
questions. They usually last for about an hour and are typically recorded.
Focus groups and personal interviews provide more subjective data than surveys do. The results are not
statistically reliable, which means they usually don't represent a large segment of the population.
Nevertheless, focus groups and interviews yield valuable insights into customer attitudes and are excellent
ways to uncover issues related to new products or service development.
4. Observation. Individual responses to surveys and focus groups are sometimes at odds with people's
actual behavior. When you observe consumers in action by videotaping them in stores, at work or at home,
you can observe how they buy or use a product. This gives you a more accurate picture of customers'
usage habits and shopping patterns.
5. Field trials. Placing a new product in selected stores to test customer response under real-life selling
conditions can help you make product modifications, adjust prices or improve packaging. Small business
owners should try to establish rapport with local store owners and Web sites that can help them test their
products.
Secrets of Successful Market-Research Studies
Whether your goal is to expand into new markets, introduce a new product or service, or gauge customer
reactions, even the smallest of small businesses can benefit from a simple but well planned market-
research study.
Market research helps you understand your market, your customers, your competitors and larger industry
trends. Good research will reveal details about your current customers and help you target new customers.
For example, before you open an organic produce market, find out if there's a demand for food grown
without pesticides and if customers will pay more for it.
In addition to giving you insight into customer needs, market-research studies can help you avoid costly
mistakes, such as introducing an unpopular new line of goods or developing a service that no one really
wants. Coca-Cola's introduction of New Coke in the 1980s shows what happens when decisions aren't
supported by good research. Coca-Cola revised the formula of its traditional Coke brand of soft drink and
lost millions in sales. By performing a study and asking people what they thought of the new formula, the
company could have avoided public-relations headaches.
When you set up a market-research study for your business, follow these basic guidelines:
Use the right sample. The research sample — your study’s group of participants — has to be just the
right size. Too large a sample costs too much, and too small a sample offers inaccurate results.
You also need to make sure you have the right samples from your overall population. Even a sample as
small as 1 percent of a market or group will work, as long as the sample truly reflects the overall
geographic area or population you want to query.
Mirror the market. Your surveys must reflect all characteristics of the market, such as geographical area
or population group from which it is drawn. Nielsen TV ratings are based on very small samplings of the
overall audience, but they're accurate to a few percentage points.
For example, if half of your target market is aged 65 and older and half is 30 and younger, make sure that
the sample size accurately reflects your demographic. If one-third of your market lives in one town and
two-thirds lives in another, your survey must reflect the geographic split in order to give you accurate
information about your market.
Get quantifiable results. Successful studies follow proven approaches, often based on the world of
statistics and sampling. But don’t worry — you don't need a PhD in mathematics. Most results can be
tabulated with simple arithmetic and broken down into percentages that anyone can understand.
If you follow these guidelines, you’ll collect information that can contribute to the success of your
enterprise. In short, market-research studies can save money, save time and — above all — save you from
disaster.
Market
Understanding Your Target Market
No business can be all things to all people. Instead, you must reach specific customers and satisfy their
particular needs. As an entrepreneur, you must identify those customers and understand as precisely as
possible what they want.
The process of finding and studying potential customers for your venture doesn´t have to be complex or
expensive but it is extremely important. In a nutshell, it requires you to find out everything you can
about the customers you intend to pursue. Once you have that information, you´ll have a much better
chance of capturing those customers for your business.
The facts you need to know about your target market fall into these three categories:
Demographics. Begin your research by checking the demographics of the region you plan to target. You
´ll want to know the population´s make-up in terms of age, gender, income level, occupation, education
and family circumstances (married, single, retired and so on).
To find that information, you´ll probably need to visit the local library. Good sources available at most
libraries include:
o Country and City Data Book, published by the U.S. Department of Commerce
o Survey of Buying Power Data Service, published by Sales and Marketing Management
Geographic and lifestyle factors. Give some thought to where and how your target customers live. Are
they Southerners or Yankees; urbanites, suburban soccer moms or country folk? Are they risk-takers or
conservative; athletes or couch potatoes; spenders or savers? The answers will help determine what you
can sell to them, how you should sell it and at what price.
Customer needs. Consider all the reasons why people might buy your product or service. For example,
say you´re opening a string of health clubs. Will your customers come to meet other people, to take
exercise classes or to play racquet sports with their friends? Find out by talking to people in the local
fitness industry and by quizzing friends or acquaintances who go to health clubs. Then you can design and
market your club accordingly.
Once you´ve considered the key demographic factors, you can begin to assemble a customer profile, a
more focused statement that describes your target market in detail. Consult that profile when you make
decisions about issues such as what products and services to offer or advertise; how much to charge for
various products; and expansion plans.
Market Survey
1. In what type of business, industry or profession do you work? (Please check one.)
 Agriculture/forestry/construction
 Data processing/computers
 Finance/banking/insurance
 Health care (medical, dental, etc.)
 Real estate
 Wholesale trade
 Retail trade
 Other: ______________ (please specify)
 Communications/publishing/advertising
 Education
 Government/public administration
 Manufacturing
 Personal/business services (consultant,
CPA, lawyer, etc.)
 Transportation/public utilities
2. What is your position? (Please check only one.)
 Chairman of the Board
 Owner/Partner
 Other Company Officer (V.P., Treasurer,
etc.)
 Manager
 Scientist or Engineer
 Sales
 Clerical
 Other: _______________ (please specify)
 President/CEO
 Director
 Department Head
 Supervisor/Foreman
 Other administrative position not
mentioned
 Technical Specialist
 Retired
3. How many people, including yourself, work at your company, including branches, international
offices and plants? (Please check only one.)
 Under 10
 25 - 49
 75 - 99
 250 - 499
 1,000 - 4,999
 10,000 or more
 10 - 24
 50 - 74
 100 - 249
 500 - 999
 5,000 - 9,999
4a. What are your company’s annual gross sales or revenues? (Include all plants, branches, divisions
and subsidiaries.)
 Less than $250,000
 $500,000 - $999,999
 $5 million - $9.9 million
 $25 million - $99.9 million
 $250,000 - $499,999
 $1 million - 4.9 million
 $10 million - $24.9 million
 $100 million or over
4b. What year did your business start? _______________
5. Do you serve on your company's board of directors?
 Yes  No
6. Are you on the board of directors of any other company?
 Yes  No
7a. Are you an owner or a partner of a business?
 Yes  No
7b. If you answered yes, in what industry or profession were you employed and what was your job title
before you became an owner or partner?
Industry or Profession: _______________________ Job Title:________________________
7c. Are you considering starting or buying a new or additional business?
 Yes  No
7d. If you are planning to start or buy a new business, when do you plan to do so?
 In the next six months
 In 13 to 24 months
 Not sure
 In 7 to 12 months
 More than 24 months from now
8. In the last 12 months, have you been directly involved in initiating, recommending, ordering or
approving the purchase of any of the following products or services for your firm? (Please check all
that apply.)
 Accounting services
 Answering/paging systems
 Building materials/equipment
 Computers and computer accessories and/
or related computer equipment (include
time-sharing)
 Credit cards
 Fax machines
 Insurance
 Office supplies (including office paper)
 Real estate and/or office or plant location
 Telecommunications equipment/services
 Travel services
 Advertising /PR/sales promotion
 Banking and financial services
 Car/truck/van purchase or lease
 Computer software
 Copiers
 Express mail/courier/package delivery,
overnight delivery
 Office furniture and fixtures
 Other office machines (calculators,
typewriters, postage meters, etc.)
 Temporary office help/employee
recruitment
 None of these
9. Which express mail/package delivery services do you use? (Please check all that apply.)
 Federal Express
 United Parcel Service
 Emery/Purolator
 U.S. Postal Service/Express Mail
 DHL
 Other: ______________ (please specify)
Motivation Survey
1. How knowledgeable are you about computers?
 Very
 Slightly
 Somewhat
 Not at all
2. Which of the following are important to you when evaluating a computer equipment purchase?
Check all that apply.
 After-sales support
 Best price for features
 Easy to use
 Lowest price available
 Newest technology available
 Reputation of vendor
 Warranty
 Attractive product
 Brand name
 Hardware compatibility
 Most features/functions
 Product quality
 Compact size
 Other: ______________ (please specify)
3. Which of the following sources of information do you use to make decisions about computer or
software purchases? (Please check all that apply.)
 Business publications
 Colleagues
 In-store displays
 PC Publications
 Radio
 Trade shows
 Other: ______________ (please specify)
 Catalogs
 Consultants
 Manufacturer's reps
 Personal experience/knowledge
 Television
 Newspaper
4. Which of the following publications do you rely on for information regarding your business or your
plans to start a business? (Please check all that apply.)
 Business Nation
 Business Week
 Byte
 Computer Shopper
 Computerworld
 Entrepreneur
 eWeek
 Forbes
 Fortune
 Home Office Computing
 Inc.
 Independent Business
 MacCentral
 Macworld Online
 PC Magazine
 PC Novice
 PC World
 None of these
5. As a small-business owner, please check those of the following topics covered in Entrepreneur
magazine that you consider useful.
 Tax information  Financial (raising money, etc.)
 Marketing strategies
 Latest office equipment
 Franchise information
 All of the above
 New ideas for business
 Computer technology
 Company profiles
 Management tips
 Latest small-business trends and statistics
 None of these
6. Are you:
 Male  Female
7. What is your total annual household income? (Include income from all family members and all
sources—salary, bonuses, investment income, rents, royalties, etc.)
 Less than $30,000
 $40,000 - $49,999
 $60,000 - $74,999
 $100,000 - $149,999
 $250,000 - $499,999
 $1 million or more
 $30,000 - $39,999
 $50,000 - $59,999
 $75,000 - $99,999
 $150,000 - $249,999
 $500,000 - $999,999
On Target
You need market research to hit the mark with prospects. But if costly surveys and focus groups
aren't in your financial picture, try these creative, budget-friendly ways to get to know your target
audience.
Entrepreneur magazine - August 2004
By Isabella Trebond
Would you shell out $200 for a pair of shoes without trying them on? Plunge into a steaming bath without
dipping a toe in first? Of course not?but people do the business equivalent every day. Many an
entrepreneur has found out too late that nobody wants to buy hand-quilted Christmas stockings at $24.99 a
pop, or that moneyed customers won't trudge to the unfashionable part of downtown for luxury stationery.
The paradox: Conventional market research is expensive (corporations regularly budget tens or hundreds
of thousands of dollars for it), but no one needs it more than a startup entrepreneur. A couple of marketing
blunders won't put a giant manufacturer out of business, but just one can sink an entrepreneur with
shocking ease.
This article walks you through the basic steps of do-it-yourself market research. We'll skip the tried-and-
true but unaffordable techniques?like focus groups, professional surveys and direct-mail questionnaires?
and fast forward to ideas for those of us with more creativity than cash. The focus is on startup research,
but many of the same techniques can also be used to refine your marketing plan for an existing business or
to figure out why it's not flourishing the way you think it should.
You'll start by roughly defining your typical customers, determine if enough of them exist, and, finally, try
to decipher their buying habits, preferences and prejudices.
Step 1: Define Your Target Customers
Your "target customers" are those who are most likely to buy from you. Resist the temptation to be too
general in the hopes of getting a larger slice of the market. That's like firing 10 bullets in random
directions instead of aiming just one dead center of the mark?expensive and dangerous.
Try to describe them with as much detail as you can, based on your knowledge of your product or service.
Rope family and friends into visualization exercises ("Describe the typical person who'll hire me to paint
the kitchen floor to look like marble . . .") to get different perspectives?the more, the better.
Here are some questions to get you started:
H Are your target customers male or female?
H How old are they?
H Where do they live? Is geography a limiting factor for any reason?
What do they do for a living?
How much money do they make? This is most significant if you're selling relatively expensive or
luxury items. Most people can afford a carob bar. You can't say the same of custom murals.
l What other aspects of their lives matter? If you're launching a roof-tiling service, your target customers
probably own their homes.
Get specific. For example, if you're selling collectible comics through a Web site but aren't willing to
brave international export regulations, your customer location can stay in the United States. Or if you're
planning to open a custom-tailoring shop and need busy executives to come for three fittings, you may
need to limit it to your local area.
Step 2: Decide if You Have a Market
Before you commit hours to researching what customers want from you, it makes sense to find out
whether you have a viable target market.
The cheapest and simplest way to do this is through "secondary data," or information someone else has
already gathered for you. Usually, this takes the form of various statistics and can only answer closed-
ended questions: How many? When? Where? Your own questions will depend on your customer profile
and become more tightly targeted based on what you find out as you go.
You can find answers in a number of ways:
1. Reference librarians: Most are delighted to help you research. Often, they'll practically do it for you.
These days, they can look up a lot of what you need on computer databases, and you have a decent chance
of walking away with all your answers. Printouts may cost several cents per page.
2. The local field office of the Department of Commerce: It should supply you with free or nearly free
information on population, demographics, housing, the economy, market trends, surveys of current
businesses, and more.
3. The business libraries of local universities: These often have more specific information on business
trends than a public library. Ask the librarian for help.
4. Your local SBA branch or Small Business Development Center: It has a multitude of publications
and business literature full of advice and market forecasts.
Once you've got all the answers, it's time for a judgment call: Do you have a working market?
Only you can decide if 14 competitors are too many for 19,000 target customers, or if you want to gamble
on the fact that your target customer spent 30 percent more last year than three years ago. If you don't like
the numbers, at least you've just saved yourself a potential financial disaster. Now you're armed with a
much better grasp of market conditions to revamp your business idea or marketing direction and return to
Step 1.
Portrait of a Customer
Before your research is over, your ideas about your target customer may change several times. Add
explanations and qualifiers under each category as they occur to you; these will document your thought
processes and remind you of how you got to the final concept.
This is a preliminary customer profile for an entrepreneur's actual business idea. He wanted to offer faux
paint effects, but wasn't sure if there was enough of a market in his area for him to do this for a living.
Going only on his own knowledge, this is the customer profile we came up with (comments, qualifiers and
all):
a Gender: Both, since many clients will be couples
Age: Late 20s to 40s?let's say 29 to 45. Very young people usually can't afford this, and the older
generation might be too conservative.
g Location: The Denver area. Since projects usually require at least a few days to complete, it's not
practical to drive long distances every day.
p Income: $60,000 upwards for the household combined. Since the cost per job ranges between $500
and up, people who make less than that aren't likely to be able to afford this.
a Occupation: Probably white-collar
Other factors: Owns a home?many landlords won't let renters paint, especially when it comes to
daring effects like this. Married?because couples have a greater pooled income and are more likely to be
homeowners. No young children?because parents aren't as likely to invest in fancy paint effects and might
also be worried about the safety of kids around chemicals during the process.
When creating a customer profile, you'll want to use secondary research to answer questions like the
following:
f How many people in the Denver area are between 29 and 45 years old?
f How many of these are married?
f How many couples have young children (under age 10)?
f How many have a combined household income of $60,000 or more?
f What percentage of them own their own homes?
f Are the numbers of homeowners and relatively high-income families in my area increasing or
decreasing?
d How many decorative painters and faux finishers work in my area? Who are they?
d How many were there five years ago, three years ago and last year? Are there more of them now than
before?
b How many clients hired them last year?
b How much did they make on average?
b Where are they located? Are there more of them in certain areas than others?
Step 3: Get to Know Your Marketing
Once you decide you have a viable market, it's time to find out more about it.
Secondary research helps you refine your customer profile and gives you broad guidelines for your
marketing efforts. But because it's all derived from information that focused on others, it's only so much
sophisticated guesswork that applies to everybody in your position. Market research that's done
specifically for your business, or "primary research," is where you'll get intimate with your own unique
market.
Keep your mind open to any information, but also keep a list of primary research questions handy, such as:
Who influences your customers and how? Spouses, neighbors, peer groups, professional colleagues,
children and the media can all affect buying decisions. Look for hints that one or more of these are a factor
for you.
f Why do they buy? Distinguish between the features and the benefits your product or service offers.
Features describe what it is; benefits are what your customers get out of it. The latter is why your
customers pay you. Are they looking for a status symbol, a savings in time or energy, a personal treat or
something else?
s Why should customers choose you and not your competition? What can you offer that the
competition doesn't?
c How do your customers prefer to buy? Many businesses benefit from the broader market provided
by the Internet and mail order, while others do better with a physical presence. Don't assume you fall into
one category or the other; customers may surprise you.
Keep those questions in mind as you take the following research steps:
1. Read, read, read. Articles, interviews and survey results published in trade periodicals reflect specialist
knowledge of your market. Publications that focus on your business type are invaluable for forecasting
upcoming trends and identifying customers' needs. But ads, letters to the editor, and other "extras" can be
even more revealing. Study the ads (full- and half-page ones as well as the classifieds) of businesses
similar to yours; watch for features your competitors most want to emphasize or de-emphasize. To get an
overview of recent changes, order back issues, or find them in the library. Are there more or fewer ads
now than last year or three years ago? Do those that have lasted have anything in common?
Readers' letters often contain information on what your customers like or dislike about certain products or
companies. Editorial pieces frequently highlight hot trends, which should have a bearing on your
marketing plan. Say you're starting a creative sewing pattern company. If three sewing magazine editors in
as many months mention the plus-size market, and you see half a dozen letters complaining about the lack
of choices in larger sizes, you've just received a hint in neon.
2. Tap the Internet. Newsgroups and discussion lists on the Internet debate every imaginable topic.
Chances are, some of them partially match your customer profile. They may be talking about the type of
product or service you offer—or can be encouraged to do so. Best of all, everything they've ever said has
been archived. It's like having a ready-made, if somewhat chaotic, focus-group transcript at your disposal.
You can glean information just by finding archived threads relevant to your business and paying attention
to comments made by those who fall into your target demographic. As a shortcut, type the names of your
competitors (you found these during your secondary research) in the search boxes.
You can also take it one step further and start your own thread to initiate a more tightly focused
discussion. A caveat: Some lists and groups don't welcome commercial postings. Always observe their
rules, and phrase your questions discreetly. You can ask any number of questions that don't violate their
posting etiquette and still supply you with a wealth of feedback ("What should I look for in a good pet-
sitter?" "What's everybody's favorite brand of low-carb chocolate?" "How much is too much for a
handmade harp?" "Where's the best place to buy organic baby products?"). You can follow up the answers
with further questions until you have the level of detail you want.
3. Check out the competition. You can learn about what to do and not to do by studying your
competitors. Visit their Web sites, and look at their prices, guarantees, testimonials and special offers. If
they offer newsletters, get on their mailing lists. You'll get free information on improvements, new product
lines, trends and even customer responses.
Spend some time analyzing their advertising and sales literature. What do they emphasize most? What are
they not mentioning? Do you see aspects you could improve?
Try calling or e-mailing them to ask about their rates and services. If they have stores, visit and browse
them. Write down your impressions as soon as you've hung up or left the building. Keep a record of each
one, and ask yourself what all or most of them have in common, why you think that is, and how you can
set yourself apart.
4. Get students involved. Call or visit the Web sites of local business colleges as well as the faculty of
business departments at universities and colleges in your area. Find out who teaches classes on marketing,
preferably small-business marketing. Try to persuade them that your business would make a great real-life
market research project.
They may agree, especially if you're willing to provide samples and demonstrations on request. You'll
have a better chance at certain times of the year, so if you've caught them at the wrong time, ask when
might be better and whether they can refer you to anyone who runs on a different schedule.
If it pans out, you'll have to work with the professor's teaching plan and timetable, but you'll end up with
100 percent relevant, thorough, customized research results put together by people who intend to make a
career out of this.
Researching Your Market
Whether you're just starting out or if you've been in business for years, you should always stay up-
to-date with your market information. Here are the best methods for finding your data.
August 07, 2001
Compiled by Laura Tiffany
The purpose of market research is to provide relevant data that will help solve marketing problems a
business will encounter. This is absolutely necessary in the start-up phase. Conducting thorough market
surveys is the foundation of any successful business. In fact, strategies such as market segmentation
(identifying specific segments within a market) and product differentiation (creating an identity for your
product or service that separates it from your competitors') would be impossible to develop without market
research.
Whether you're conducting market research using the historical, experimental, observational or survey
method, you'll be gathering two types of data. The first will be "primary" information that you will
compile yourself or hire someone to gather. Most information, however, will be "secondary," or already
compiled and organized for you. Reports and studies done by government agencies, trade associations, or
other businesses within your industry are examples of the latter. Search for them, and take advantage of
them.
Primary Research
When conducting primary research using your own resources, there are basically two types of information
that can be gathered: exploratory and specific. Exploratory research is open-ended in nature; helps you
define a specific problem; and usually involves detailed, unstructured interviews in which lengthy answers
are solicited from a small group of respondents. Specific research is broader in scope and is used to solve a
problem that exploratory research has identified. Interviews are structured and formal in approach. Of the
two, specific research is more expensive.
When conducting primary research using your own resources, you must first decide how you will question
your target group of individuals. There are basically three avenues you can take: direct mail, telemarketing
or personal interviews.
Direct Mail
If you choose a direct-mail questionnaire, be sure to do the following in order to increase your response
rate:
• Make sure your questions are short and to the point.
• Make sure questionnaires are addressed to specific individuals and they're of interest to the
respondent.
• Limit the questionnaire's length to two pages.
• Enclose a professionally prepared cover letter that adequately explains what you need.
• Send a reminder about two weeks after the initial mailing. Include a postage-paid self-addressed
envelope.
Unfortunately, even if you employ the above tactics, response to direct mail is always low, and is
sometimes less than five percent.
Phone Surveys
Phone surveys are generally the most cost-effective, considering overall response rates; they cost about
one-third as much as personal interviews, which have, on average, a response rate which is only 10
percent. Following are some phone survey guidelines:
• At the beginning of the conversation, your interviewer should confirm the name of the respondent
if calling a home, or give the appropriate name to the switchboard operator if calling a business.
• Pauses should be avoided, as respondent interest can quickly drop.
• Make sure that a follow-up call is possible if additional information is required.
• Make sure that interviewers don't divulge details about the poll until the respondent is reached.
As mentioned phone interviews are cost-effective but speed is another big advantage. Some of the more
experienced interviewers can get through up to 10 interviewers an hour (however, speed for speed's sake is
not the goal of any of these surveys), but five to six per hour is more typical. Phone interviews also allow
you to cover a wide geographical range relatively inexpensively. Phone costs can be reduced by taking
advantage of cheaper rates during certain hours.
Personal Interviews
There are two main types of personal interviews:
1. The group survey. Used mostly by big business, group interviews can be useful as brainstorming
tools resulting in product modifications and new product ideas. They also give you insight into
buying preferences and purchasing decisions among certain populations.

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