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Definition: The study of the spending characteristics and purchasing power of the consumer who are within your business's geographic area of operation; a research method for defining the market parameters of a business. .
Market survey--where you actually speak to members of your target audience--are an important part of market research. You can choose to hire a company to do it for you, but conducting the interviews yourself will most likely give you a much better idea of the needs of your target audience and will provide you with insights that you might not otherwise have gleaned.
If you're going the do-it-yourself route, you'll probably want to act as the focus group moderator. As the moderator, you'll want to encourage an open-ended flow of conversation and be sure to solicit comments from quieter members, or you may end up getting all your information from the talkative participants only. Also, when conducting any type of survey, whether it's a focus group, a questionnaire or a phone survey, pay particular attention to customers who complain or give you negative feedback. You don't need to worry about the customers who love your product or service, but the ones who tell you where you're going wrong provide valuable information to help you improve.
Telephone interviews: This is an inexpensive, fast way to get information from potential customers. Prepare a script before making the calls to ensure you cover all your objectives. Most people don't like to spend a lot of time on the phone, so keep your questions simple, clearly worded and brief. If you don't have time to make the calls yourself, hire college students to do it for you.
Direct-mail interviews: If you want to survey a wider audience, direct mail can be just the ticket. Your survey can be as simple as a postcard or as elaborate as a cover letter, questionnaire and reply envelope. Keep questionnaires to a maximum of one page, and ask no more than 20 questions. Ideally, direct-mail surveys should be simple, structured with "yes/no" or "agree/disagree" check-off boxes so respondents can answer quickly and easily. If possible, only ask for one or two write-in answers at most.
Fax/e-mail interviews: Many of the principles used in direct-mail interviews also apply to these surveys. One exception: Never send an unsolicited fax that is more than one page. Give clear instructions on how to respond, and be appreciative in advance for the data you get back.