The True Cost Of Market Research

If there’s one, key distinguishing factor between big companies and small ones, it’s the amount of time, effort and attention the large companies dedicate to market research. Market research, as most companies view it, can be an expensive undertaking even when managed by the most proficient of facilitators. In the wrong hands, the combined costs of lost opportunities, incorrect conclusions drawn from data and inept management of the research process can force client companies to re-consider doing any research at all.

That may explain why in a recent poll conducted by Brand Central Station, barely more than half (50.3%) of the corporate communicators participating in the survey said their companies conducted marketing research projects frequently or all the time. “It helps us to manage our brand structure, the advertising messages and images and it allows us to connect our advertising to our sales teams,” explained James Lauteri of Mellon Financial Corporation in Pittsburgh.

“We are able to focus our time on developing products with a high probability of success as opposed to blindly developing products that don’t fit our customer’s needs,” wrote the San Antonio Express News’, Merrell Ligons.

Clearly, you have to establish the value of the information gained in order to justify the cost and time associated with conducting research. But while management may understand the benefits of research when it comes to developing new products or clarifying the relationship between advertising and sales, there are far greater costs managers need to consider when they decide to forego market research.

Adam Hayes, owner/manager of AH Digital FX Studios conducts his own market research in order to stay one step ahead of the competition. “Without feedback from the market you will never adapt quick enough to changes and new challenges in the marketplace,” he says. “Staying ‘ahead of the game’ is critical in our business.”

One of the major obstacles most companies face when it comes to research is cost. And big research costs are most commonly associated with primary research. Understanding the difference between primary and secondary research could save your company a bundle.

Primary research is best described as information that comes straight from the source. If you want to know what customers think, you ask them; document their responses and then draw your conclusions. It’s as simple as that, really.

Secondary research is best described as information you collect and the insights you draw from other peoples’ primary research. There are many sources of secondary research materials to draw upon ranging from your local library to your favorite media representatives. In fact, your regular media vendors can be a wealth of information on market trends, competition and more.

Realizing you have several sources of information to draw upon, it’s vitally important to clearly define what you want to know at the end of your research project. This may take some digging on your part, but keep in mind that the better the job you do defining the problem at hand, the more likely the research you conduct will identify solutions.

If you’ve never conducted a market research project before, here’s a handy guide that tells you what to do. There are also hundreds of research consultants who can help you walk through the process as well. And, I suppose, this is as good a place as any to suggest you visit the Brand Central Station web site and check out our new Market Research Inventory Page. It’s a page full of links to helpful “hacks”, service providers and consultants. It’s as good a place to start as any.

Good luck.

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