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Observation

Watching how consumers behave provides many insights, but can leave questions unanswered.   Observation works well in retail markets; sit outside a shop and watch how many people walk by, look at the window display etc.

Postal surveys

Sent to the address of potential customers who complete the form and send back in a pre-paid envelope. Relatively cheap, a postal survey can cover a wide geographical area and avoids the potential for interviewer bias.  However, response rates (the proportion of people sending back a completed survey) are often very low and it can take be a long time before enough surveys are returned

Telephone interviews

Not to be confused with “telesales” (which is a method of selling), the telephone interview allow quicker feedback than a postal survey.  However, potential customers are often wary of being called and may be reluctant to give anything other than short answers

Online surveys

Increasingly popular and relatively low cost, online surveys are widely used by small businesses as a way of capturing the views of existing and potential customers

Face-to-face surveys

Personal interviews conducted face-to-face.  A costly, but good way to get detailed insights from an individual

Focus groups

Groups of potential customers are brought together to discuss their feelings about a product or market. Focus groups are a good way of getting detailed information about customer tastes and preferences

Test marketing

This involves selling a new product in a small section of the market in order to assess customer reaction.  For example, a start-up could start by selling to a limited local area in order to iron-out product issues.  Software firms often test-market their products by offering “beta” versions for testing by a small group of potential customers. Test marketing can be a good predictor of how a new product or service will be received by the larger market (provided that it can be kept secret from competitors!)