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How Smart Businesses Conduct Market Research on a Tight Budget

How Smart Businesses Conduct Market Research on a Tight Budget

Laptop and Cup of teaDeciding what’s next for your new business isn’t always a clear call. When your instincts are telling you one thing—and your advisors are telling you something else—how do you decide the best next step to take?

Market research.

But running focus groups can be expensive. And A/B testing marketing messaging and ads can cost a lot of time (and money) if you don’t test concepts the right way. Because if you’re operating on a shoestring budget, you’ve got to conduct market research that really counts.

This was the problem that Elizabeth McGinnis, founder of ChaHoney—a company that sells a monthly tea subscription—was facing. Although ChaHoney, founded in 2014, already has a group of devout followers, McGinnis wanted to grow her customer base. So in addition to listening to her existing customers, she decided it was time to learn more about her target market.


Enter SurveyMonkey Audience—home to millions of people ready to take surveys. Using SurveyMonkey Audience, McGinnis launched her market research survey to over 300 people to find out where ChaHoney should hold tea-tasting events, how to select marketing messaging—and learn key demographics about potential customers.

Here are answers to the 4 big questions we helped her answer, and how those results can help target her marketing efforts.

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Question 1: Which events are worth it?

Although ChaHoney is an online business, McGinnis wanted to build brand awareness by holding in-person events (in addition to her online marketing efforts). Since sticking close to home for now is a priority (ChaHoney calls California home), she was smart about sending her survey. She used SurveyMonkey Audience’s targeting options to make sure her survey was sent to respondents only in the Pacific Northwest. This way, the feedback collected directly applies to her specific business goals.

McGinnis was considering a pop-up stand in a local tea shop, setting up a booth at a farmer’s market, and hosting tea-tasting parties. But which would attract the most business? Well, it turns out that people who drink tea a few times a week or more, the ones we dubbed “total tea-ers” had specific ideas on when and how they wanted to learn more about teas:

Screen Shot 2014-10-29 at 10.17.33 AM

“Oh, no way will I join your tea-tasting party.” The majority of frequent tea drinkers weren’t very interested in tea-tasting parties with 33% saying they had no interest in attending a tea-tasting party at a friend’s house, though about 36% said they socialized and drank tea with friends or family once a week or more. So where did our “total tea-ers” want to try out new teas?

Well, 61% said they’d want to try new teas at a tea shop, and 48% said they’d be happy to try them at a local farmer’s market. We also asked for other suggestions—and when we performed open-ended text analysis on the results, we saw that for most of them, tea-tasting was about being in a more intimate setting—at home or at a friend’s house. (But not at a party.)

One of her respondents mentioned wanting a tea robot. And now that we have a vision of a robot bringing us tea, we too want one for our office and home—wouldn’t you?

Question 2: What’s the personality type or attributes of my target demographic?

For ChaHoney, understanding the customer mindset around tea was a great starting point for figuring out how to message new and returning customers―on the website, on the product packaging, and even through promotional emails.

So how do the frequent tea-drinkers feel about tea? 26% said they strongly agree that they drink tea to unwind or relax. And 73% said that they associated those feelings with tea and drinking tea. About 35% said tea time was “Me Time,” a chance to get time to themselves. And 56% agreed tea is good for their health, with 42% saying drinking tea was something that kept with tradition or habit.

Question 3: Should I change what I’m saying in my marketing materials or packaging?

Every month, ChaHoney sends out a shipment of tea to its subscribers. They have primarily been a selection of seasonal teas with a nature theme. But is it time to branch out?

Since the frequent tea-drinkers associate tea with calming, relaxation, and health benefits, McGinnis now knows she can use those concepts to reframe her marketing messaging. So what about the content? In her survey, McGinnis asked what people would want to learn about when it comes to tea. Here’s what the frequent tea-drinkers said:

Screen Shot 2014-10-29 at 11.08.00 AM
Now that McGinnis knows her tea-drinkers are curious about the health benefits of tea (60%) and that they’re interested in seasonal recommendations (44%), she can modify her marketing strategies accordingly.

We also used question piping in McGinnis’ survey to help target people who like specific types of teas. Because in addition to targeting her marketing efforts, McGinnis wanted to make sure that she was marketing the right types of teas to her frequent tea-drinkers.

Using question piping, we were able to take people who said they prefer to drink a certain type of tea, and ask them a follow-up question specific to the answer they chose. For example, we helped McGinnis find out that 59% of people who say they like a particular tea (such as green or black) want to learn more about the tea they enjoy. (She was also able to find out that 54% say they want to try new teas as well.)

Now that’s a smart way to be able to ask people targeted follow-up questions without having to hold a focus group or conduct interviews, which cost time and money.

Question 4: Could I market to someone making a purchase for someone else?

Because ChaHoney sells a very specific product, we did wonder if she could get people to buy a tea subscription even if they didn’t drink tea. At the beginning of the survey, we asked people how often they drink tea. And instead of wasting resources by automatically disqualifying people who said they rarely or never drink tea, just like squeezing the flavorful water out of a tea bag, we got rich consumer and demographic data out of them.

So, using skip logic, we had the non-tea-drinkers bypass all of the questions about tea-drinking habits and asked them how likely they’d be to purchase tea for a friend or family member.

Turns out, that almost 66% of the people who drink tea a few times a month or less would purchase tea as a gift for someone else, and about 75% of them live with someone who drank tea. File that one under, “You don’t know unless you ask.” Now McGinnis knows that her target market doesn’t only include frequent tea-drinkers; she should also consider talking about her tea subscription service as a great gift. And there you have it—smart marketing on a budget.

Are you marketing on a tight budget? Check out our ideas for marketing surveys! Or share some of your marketing strategies in the Comments below.

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