POVLITZ Inc | Business and Entrepreneur

These methods are the most expensive, but they will give you the best results. Conducting direct research, either yourself or through a firm you hire, surveys the public regarding your proposed business.
There are basically three ways to conduct this research: on the phone, through direct mail, or in personal interviews. Telemarketing and phone research. Telephone research is the least expensive of these methods, costing about one-third less than personal interviews. They also allow you to cover a broad geographic area.

Here are some tips to follow when using this technique:

• Tell the interviewee up front how important his or her response is and that the interview will be short (between five and ten minutes).
• Avoid pauses as respondent interest drops.
• Keep the questions short and interesting.
• Make the survey answer options consistent.

Good interviewers can survey up to seven people 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. You would like to get over 250 interviews to have a good sample.

The costs associated with this method include the fee for the telemarketer, phone charges, preparation of the questionnaire, and the analysis of the results. Costs can be lowered by calling during certain hours.

Direct mail. Direct mail questionnaires can be inexpensive if you send out enough to take advantage of bulk mail prices, but the response rates are usually less than 5 percent. To increase your response rate, try these ideas:

• Include a nice letter that explains what you are looking for and why.
• Keep your questions short.
• Limit the length of the questionnaire to two pages.
• Address the letter to a person, not “occupant.”
• Address the letters by hand (tiring yes, but also effective).
• Include a self-addressed, stamped return envelope.

The main costs of this method relate to printing the cover letter and questionnaire, envelopes, postage, and the ensuing analysis.

Personal interviews. There are two main types of personal interviews, individual and group. Group interviews are good because you get many responses at once. They give insight into buying preferences and purchasing decisions. But they also are expensive because participants usually want to bepaid for their time. One-on-one interviews either use a script to get responsesto specific inquiries or are more open-ended, allowing for any response.

Costs for personal interviews include the fees paid to participants and interviewers, renting the facility, the printing of any questionnaires, and analysis.

If primary research is too expensive for you, then you need to turn to the secondary research methods discussed below. But before you do, it doesn’t hurt to simply go out and speak with some business owners on your own. Go to a town other than your own (so that you aren’t viewed as the competition), find a business similar to the one you want to start, and ask the owner about the business. Find out who his customers are, what they like and dislike, and what the competition is doing. By doing this several times, you will learn much about your potential business.

To be continued…..