Staying on top of industry research is an integral part of a successful business. Whether a company’s looking for a new base of operations or a would-be entrepreneur wants to launch a first business, using the right business research methods can be the difference between success or failure. And, using the right research methods can still result in failure if the data isn’t current.
Business Research Methods Definition
Business research methods include many ways of gathering information about an industry, its competition or the opportunities available that are relevant to conducting research. Some methods include scouring the internet, collecting data at the library, interviewing customers, running surveys and focus groups. Each type of research has pros and cons, so it’s important to be aware of all the variations and their applications.
Why You Need Business Research Methods
Using business research methods allow you, as a business owner, a potential start-up operator or even a would-be investor to make smart choices before real money is on the line. Think of it as testing footholds and anchors before scaling a mountain. Blind faith can cost you everything if you take the wrong steps, but moving forward with pragmatism and foresight can take you to the summit.
Risk-reduction is a huge benefit to doing well-executed business research. Understanding demographics, markets, opportunities, costs, benefits and client response can all have a huge impact on the best decisions for any project or business.
Understanding Quantitative Vs. Qualitative Research
Before delving into specific kinds of research, it’s important to understand basic premises between the two core types of research: quantitative and qualitative.
An easy way to remember the difference is to think “quantity” for quantitative research. This is drill-down research that involves numbers – computational, mathematical, formulaic and statistical research. On the flip side, qualitative research is qualified in a way because it’s more of an overview or big-picture take that gives a sense of mood or overall impression, rather than digging into specifics. It hinges on things like people's feelings and consumer feedback.
Quantitative research seeks to quantify data – it’s a sampled perspective on research that can be projected in scale to reflect a larger group of society. When researchers conduct specific polls for political trends, that’s quantitative research. Each respondent has specific answers that are accumulated and parsed. Quantitative research is conclusive and definite; objective, not subjective.
On the other hand, qualitative research is best in exploratory phases. It’s open to interpretation as it’s more about feedback, emotions, body language and tone of voice or word choice. It’s often an unstructured or semistructured process that has guidelines for gathering information, but is not a definitive sampling that should be broadly assigned to a demographic or region.
Understanding Primary Vs. Secondary Research
Beyond qualitative and quantitative research, there’s also primary and secondary research. These two classifications refer to the way the research is completed.
Primary research is likened to field research. It’s feet on the pavement, door-knocking, person-to-person kind of research that involves surveying, interviewing and observing the people providing the research data. What’s great about primary research is that the researchers control the dynamic. They come up with the questions, decide what input is relevant and whether it should go into the data pool.
What’s not great about this primary research is that it involves investing time and money to get it done. There’s also more margin for error. Anyone who’s ever watched some of the old "West Wing" TV episodes featuring electoral polling knows that wording and timing dramatically affect the outcome of a survey. Ask the wrong way and it can be a leading question that gives you the result you’re hoping for, rather than an objective, untainted response.
Secondary research is considered desk research. It’s roll-up-the-sleeves time and poring over already-existing data in libraries, on the internet, in industry journals or information buried in your customer archives. The bonus in secondary research is that it’s already out there, you just need to dig it up. It’s often free or low-cost and can be terrific as preliminary or background research when trying to get the lay of the land or an initial understanding of a selected market.
But there’s a downside to secondary research, too. Like hand-me-down clothing, it’s not always a great fit. Likely, it has been gathered for a different purpose, with a demographic that’s not exactly what you’re going for. Maybe the questions are the same – would the respondents like later opening hours for doing their food shopping, for instance – but a crowd answering that question in San Francisco is a very different demographic than in Spokane, Washington.
Also, secondary research isn’t from today. Its shelf life is ticking down and it’s already out of date before you use it. It’s a 24/7 world, and information doesn't stay relevant for long. But if you’re working from your own data, that’s less of a concern. Sales figures or client willingness to receive newsletters or subscribe to a service, for instance, have a longer appeal than third-party secondary research.
Business Research Methods Examples
Choosing the right method to meet research needs is critical and sometimes it’s best to use multiple sources in order to get a broader perspective on the subject. Some research methods are easily accomplished with a bit of resourcefulness and a little time; others can cost a lot of money and take a lot of strategizing.
Focus Groups: Often, focus groups are an expensive method of research used by larger organizations. They’re both qualitative and primary research types. This means that they’re controlled in-depth by the person running the focus group. From the participants to the environment to the questions and observational methodology, everything is up to that person.
Say the focus group is conducted on behalf of a regional restaurant chain looking to offer a entirely new menu. They will know their existing demographic, as well as the demographic they’re after. They can tailor groups to include one or the other or mingle both, while excluding anyone they deem unsuited for their brand. Sometimes, it's a controlled environment with a one-way observational window that allows the brand's brass to watch as participants taste a variety of offerings from the new menu and give their reactions. Unlike a questionnaire, this includes body language, like smiling at the first taste of a new raspberry souffle.
Interviews: Interviews usually occur one-on-one or in up to three-on-one groupings. Again, there can be selected settings or hidden observers, making this a highly customizable type of information gathering.
Focus groups and conducting interviews are arguably the most expensive methods of conducting research, but also the most exploratory types available for businesses. But for established brands offering new services or products, they can yield a tidal wave of impactful information.
Case Studies: Another primary and qualitative type of research, case studies are also an expensive, but thoroughly enlightening method for the right companies. In this method, companies engage with cherry-picked customers who reflect their ideal demographic and who will potentially use the new services or products for a selected trial period. Ideally, this allows the company to get a perspective on customers' feelings during their experience.
Many companies now use beta testers. For example, a local gym wants to offer a new kind of group exercise. They may ask a selection of their clients to commit to a six-week confidential trial using their new program for free in exchange for providing detailed feedback on their experiences and opinions.
Or, a company like Amazon has a new e-reader it wants to try out. It may dig up some of the company's favorite influencers and ask them if they’d be willing to try out the e-reader for a month in exchange for receiving it free after completing reports on the experiences. This would allow Amazon to have tech-savvy users already familiar with previous generations of the product comparing it to known features and offerings found on other e-readers. It’s somewhat pricey when giving away product, but the information and feedback from a knowledgeable customer base is arguably invaluable before an expensive product launch.
Website Analysis: Using your company’s website is a highly effective way to get budget-friendly contemporary research from prospective and existing customers. From analyzing the search terms they’re using and the services they’re requesting, it’s a great way to using existing analysis to perform research.
Perhaps an online designer clothing company is looking to expand product offerings from their line of shirts, jeans, skirts and jackets. If their most searched-for item is scarves, then they know this is an item coveted by people already being driven to their site. By comparing the same-visit purchases of customers looking for scarves, they can also get an idea of the tastes and aesthetics favored by this scarf-seeking clientele. They can also learn what the customers' buying frequency and regional demographics are. Now the company's team can hit the drawing board for selling next season's scarves.
Data Collection: From visiting the library to published periodical statistics, a wide range of data sets are available on nearly any topic. These are secondary, quantitative research types and can be affordable or even free. They can also be out of date or not regionally applicable. Still, as supporting evidence, published surveys, market trends and competitor information can go a long way to helping make a case for expanding a business, starting a new venture or making an investment.
Sources for data include government bodies, educational organizations like trade schools or universities, industry periodicals and newspaper reports. Member-based websites specialize in compiling statistical research that can be of use to those who need to conduct trade research more frequently.
Anecdotal Online Evidence: Lastly, a secondary and semi-quantitative method available to modern businesses is the opportunity to parse through anecdotal evidence online from customers of their own firms and competing businesses. Social media and peer-review sites give a business insight into customers in the same industry. It can expose the competitors’ weaknesses or highlight business opportunities, thanks to services or products being overlooked by competition.
Perhaps dozens of Yelp, Facebook, Google and other reviews all say some of the same things about a competing artisanal ice cream shop, such as the business isn’t open late enough or it doesn't open on Sundays. Having this information could mean that offering a similar gourmet ice cream experience, but catering it to the late-night and Sunday-driving crowds could help a new shop establish itself without having to compete head-to-head with the town’s most popular ice cream store.
Similarly, social media, like Twitter and Facebook, as well as other platforms, offer opportunities to dig into local, regional and national mentions of particular businesses, products, industries or services. With a little know-how, the layperson doing research can find these mentions themselves. Those with the funds to hire a third-party researcher, however, can employ so-called social listening firms to aggregate mentions and comments on keywords or phrases of interest, while also managing responses to the posters. While these are not authoritative or objective sources, public opinion can be of great help to businesses that pay attention and learn from comments relevant to their industry.