A focus group is a group of anonymous people (who fit the specific profile of your target market) whom gather to talk in depth about a certain product, service, or topic.  Focus groups provide a great way to evaluate services or concepts to learn how well they’ll be received by your target audience.  They may sound like a big undertaking and something that can only be executed by large companies with huge budgets, but small businesses are now running successful focus groups at very manageable costs. 

For a financial adviser, focus groups are an ideal way to determine whether the marketing tactics you are using to gain new clients are effective.  You can use this type of forum to determine exactly what your target audience is looking for in a financial adviser and then compare that to the services you are offering.

How to Get Started
Once you decide to host a focus group, you’ll have some preparation to do.  First, you need to identify exactly whom you want to participate.  Since you are trying to get feedback about a specific service you offer and grow your business as a result, make sure you’re seeking out participants who fit the profile of your target market.  These are the types of people whom you ultimately want to start using your service.

Look back to the characteristics of the target market you defined when you were creating your marketing plan.  You likely identified:

  • Where they live
  • Where they work
  • Their income range
  • What they read, watch, and listen to
  • Where they spend their free time and what they do for fun
  • Where they shop
  • What they value most about your service

Once you have a comprehensive look at the characteristics and demographics you are seeking, the next step is to find people who fit this bill. 

How to Find Participants
Focus groups certainly can be extravagant and large, but you can also get very solid, effective results at several lower price points.  In fact, extremely targeted and large-scale focus groups are typically reserved for large companies with a product or service that appeals to and feasibly may be purchased or used by the masses.  More than likely, your business does not have that kind of reach and you are instead looking to grow on a smaller-scale and more locally.

If you want to execute a very inexpensive focus group, you can tap into your family and friends.  However, the downside to going this route is that they may not represent a diverse enough group within your target market to really give you useful, constructive feedback. 

A more effective use of your time and resources might be to move up a level and seek out participants by:

  • Visiting a local shopping mall or other busy, public place yourself and simply asking those who look like they fit your profile to participate.  Obviously, this can be very time-consuming and requires a level of gregariousness with which you may not be comfortable.
  • Posting an advertisement on a local site like Craig’s List.  This option can be quite time-consuming, as well, as you may have to sort through a lot of responses. 
  • Asking friends, family members, and business colleagues to recommend people who might be appropriate.
  • Buying lists of people who fit your target market from a market research firm (for additional cost, many firms will also conduct the focus group meeting for you).

A focus group should be no less than five people and, typically, 15 is about the maximum size.  The most important thing is that the group is highly representative of your target market.  In fact, as your first foray into focus groups, you may want to conduct a small, very manageable one.  Once you have your feet wet and know what to expect, you can move on to a larger group.

How to Compensate Participants
If your group consists of family and friends, or friends and colleagues of family and friends, lunch or snacks is probably an acceptable form of payment for their participation.  However, if you obtain random participants or call on people from your market research firm’s list, you may have to up the ante.  Typically, participants expect to be compensated for their time anywhere from $20 to $100 for each session, in addition to lunch or snacks. 

Since there is a time limit (typically they run two to two-and-a-half hours or less) and you are putting out some money, be prepared and organized so the meeting can run smoothly.

Where to Hold the Meeting
Select a comfortable, well-lit, distraction-free setting, such as a meeting room or even a lounge.

How to Execute a Focus Group

  1. Carefully determine your objective and create a script.  The session will be a waste of everyone’s time if you have not specifically honed in on what questions you’ll ask and the feedback you really want to receive from this group.  Your script should clearly map out the questions you want to ask your participants about your service.  When composing the questions, think critically about the information you are hoping to glean from this group.  Make sure the questions lead the conversation in that direction.  Overall, the script should encourage discussion and should present the questions in a very clear manner so everyone understands what’s being asked.  Don’t shy away from adding a little humor or interesting data to keep participants interested.
  2. Choose an appropriate moderator.  Typically this is not the business owner.  Instead, look to recruit someone dynamic from inside or outside your organization.  The decision of who should moderate should be based on comfort with public speaking, capacity to gain rapport with a group of people and put them at ease, and ability to effectively follow a script (without it being too obvious that a script exists).  It is appropriate for the business owner to observe the group, but should not participate in the discussion.Focus groups are intended to be interactive.  The moderator should be prepared to encourage tangents that are constructive, but tactfully steer unproductive discussions back to the key questions.  He or she will also be tasked with encouraging quieter participants to speak up; otherwise, one or two opinionated people may dominate the conversation, and your results will be skewed.
  3. Monitor your focus group.  This can mean using a video camera or a two-way mirror if you have one available.  Or, it can be as simple as setting up a tape recorder.  The point is to make sure you don’t miss any of the information being conveyed.  Also, it’s amazing what you can catch on camera that you may not collect from someone’s direct answer or tone of voice.  Gestures and facial expressions are very powerful.  Be sure to let your participants know they are being monitored.
  4. Evaluate.  When the gathering has ended, immediately evaluate the results while the information is fresh in your mind.  Chart the responses, review your notes, and replay your video or tape.  Be cognizant of remaining objective; do not simply find the answers you want to find.  Once you have solid notes on your group’s feedback, be sure to use it!  Develop a strategy for how you are going to incorporate it into your marketing plan.  A focus group is a waste of time and money if you don’t take what you’ve learned and put it to constructive use.