Buy Nice or Buy Twice
IN-HOUSE or OUTSOURCED MARKET RESEARCH?
Every mistake in business costs money. The larger business is, the more costly the mistakes are. One global retail brand was sincerely sure that its target audience is young people between 19 to 25 years old. Nevertheless, our research has shown that young customers were accompanied by older people very often. One chooses the other pays.
Such a gross mistake entails either a complete failure of the product in the market or, which happens more often in practice, a significant increase in budgets for the creation and promotion of the product. In order to avoid such mistakes, companies conduct marketing research.
Market analyses can be performed by the company itself or by another agency, specialized in marketing research. The study includes surveys, product testing, and focus groups. Before you decide which resources to use for investigation, calculate the cost of all options first. It is important to take into account financial, human and technical resources in order to find out the necessary qualification of your employees for the survey, to compare the additional load with their daily core duties.
Besides, you will need staff to monitor and manage your research project. There are also workplace costs, communications, software, transportation, and others. It is generally accepted that expenses for the study should not exceed 0.25 – 1.5% of estimated profit, made after implementing the solution based on the results of this market analysis.
When it comes to engaging outsource professionals, the decision should be made responsibly. Consider not only the cost of services provided but also the brand wheel and experience of marketing agency. The main goal is not just to conduct research, but to obtain qualitative data that will become the basis for decision-making.
Companies use market survey:
- To verify the viability of a new product or service through direct communication with a potential customer.
- To identify their target market and receive real-time feedback from consumers.
From the first sight, analysis “at home” seems to be almost free of charge, and the results seem to be more expert. We suggest to evaluate the expediency of such an investigation. What to choose – conducting marketing research in-house or by involving a specialized agency? Which option is more profitable and efficient?
Having a large analytics department, why spend money on outsourcing? An insider is better informed about the business goals and objectives, he or she is easier to make an in-depth analysis of the market. In turn, an outsider does not understand the internal problems.
These obvious arguments in favor of “in-house” have the opposite side. Awareness leads to bias, inability to take a fresh look at the problems and tasks. The chances of success are dwindling. In addition, the real costs of independent research are often quite substantial expenditure items.
REASONS FOR IN-HOUSE
- there’s no time limit;
- there are free employees in the marketing department;
- confidential information is used.
REASONS FOR OUTSOURCING
- tight timeframes;
- high demands on data purity;
- own marketing department is fully loaded;
- it is necessary to solve non-standard business tasks;
- quantitative research is planned.
Internal Research helps to make a qualitative study brief, and as a result to get the data that will become the basis for a breakthrough. On the other hand, the agency provides an outside view based on experience of similar situations. In different segments represented in the market, there are no top companies that would independently carry out complex marketing research. Almost all of them have their own internal Research Department, and they rely on outsourcing. Such activity is aimed to get clean data.
To ensure maximum synchronization between customer and agency, a test should be run before starting a large-scale project. Our company offers a sample at the first meeting. It’s wise to start with a small piece of project to find out if we meet each other’s expectations. A sample will not demonstrate your analytical skills, but you will be able to evaluate the quality of information collected. And what is most important, you will check if you have enough communication to cooperate. In 95%, Scheduling company conducts a trial test with its own money. This is our investment in relationships. We risk to see if we are right for each other.
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