It’s a common misconception that market research is only for big businesses with big budgets. In reality, though, market research is an essential part of any business – no matter how small. The purpose of market research is to help you understand your customers and your competition better, so that you can make informed decisions about your business. However, it’s still important to keep research budgets under control. Here are three costly mistakes to avoid when conducting market research.
As the ever-eloquent Yogi Berra observed, “If you don’t know where you’re going, you’ll end up someplace else.” When it comes to market research, having a clear purpose and plan is essential in avoiding wasted spend. All too often, businesses will go into research without knowing what they wish to gain or more importantly, how they plan on using the data. This can lead to wasted time and resources, as well as inaccurate results.
Businesses can easily avoid this mistake by designating a champion. – someone to shepherd the project, remove roadblocks and ensure the research agency has the support and resources it needs. The champion should be clear about the purpose of the research and what the business wants to achieve from the data. Utilize a champion to avoid “credenza research” – research that sits, unused on an office credenza, because no one knows why it was conducted or what to do with the insights, or it seems unfocused or half-finished due to the lack of a champion.
In fact, cheaper market research can often lead to poorer quality data. When it comes to market research, you can run the risk of “getting what you pay for.” That’s why it’s important to choose a reputable market research company that charges fair prices for their services. Don’t be fooled by companies that claim to offer “discount” or ” bargained” prices for market research services – in many cases, these companies cut corners to offer these low prices, which can lead to subpar data. It’s also important to remember that market research is an investment, not a cost. The right market research can give you the insights you need to make sound business decisions that will ultimately help your bottom line.
Some clients will opt for the cheapest research solution, thinking it will save them money, when in the long run, it may cost them more, or they end up wasting precious budgets and time on a research project that fails to deliver as promised or produces underwhelming results.
What to look for
One way to avoid poor quality (but cheap) market research is during the proposal process. When evaluating proposals, clients must consider value and quality in addition to just price. They need to ask themselves and their potential vendors questions about the quality of the sample, the depth of the analysis and the skill of their research team. Research proposals should include a description of the research methodology, as well as the research team’s qualifications. Clients should also ask potential vendors for references and reviews from past clients to get an idea of the quality of the vendor’s work.
Another concern is that projects may seem cheap initially but have “hidden costs” or deliverables that are not included. Clients may get nasty surprises when they are charged for expenses that were not included in the original “cheap” proposal.
Trying to do research “on the cheap,” at its extreme, can result in misleading data that can guide a company in a money-losing direction. The value gained by working with an experienced, reputable research consultant is always worth the investment.
When it comes to making decisions about your product or service, it’s important to listen to the experts. Your market research agency is an expert on understanding your target market and what they want. If you don’t listen to their recommendations, you could be making costly mistakes.
Clients can often be very insistent on “getting their own way” when it comes to research design, and particularly to sample parameters, which can result in high costs for sample and/or poor response rates. A cheaply done project (including DIY projects) can suffer from cheap, poor quality sample, unqualified respondents, lack of attention to data cleaning and quality, or limitations on the survey design (resulting in superficial results or incomplete answers). Market research agencies access to data and sample resources to use in conducting high quality research.
When clients attempt to go about market research themselves (or refuse to listen to their research partner), they often create long surveys. This is an unexpected area to which costs can occur. Clients can, at times, be insistent in loading up surveys with every question they’ve wanted to ask in the past several years. Not only are long surveys more expensive, the data quality suffers, as respondents become fatigued and inattentive. As the saying goes, “Garbage in, garbage out.” Surveys that are too lengthy can end up unactionable or useless due to poor, inconsistent data.
When it comes down to it, investing in high-quality market research is always worth the price tag. Clients don’t always understand that even though customers “come to them” to buy goods and services, finding these same people in the general population can be difficult and expensive. Unique customer bases or small geographic areas can be hard to find for research purposes, in addition to being expensive. Research partners can sometimes offer solutions to make research more reasonable.
Respect the process
While there are instances where an overnight poll can produce the information needed, most research projects require weeks (and sometimes months, in a multi-phase effort) to complete. As the saying goes, “Nine women can’t have a baby in a month.” Similarly, rushing a complex research project can at best, be costly, and at worst, result in poor quality, unusable information.
As an analyst for many years, I can tell you that producing insights requires getting into the data, looking at and/or combining information from different questions and comparing/contrasting findings from different angles. An analyst needs a bit of time to allow that process to work. Have questions about your market research efforts? Let us know by contacting us today