As your business grows it’s likely that you will draw upon research at some point. After all, you need to know about your target customers: their pain points, income levels, priorities, shopping preferences and much more. Accurate information translates into a better business, but how should you get that information? Is it better to conduct your own research (DIY Market Research) or to hire a professional market research firm?
Doing Your Own Research – Pros, Cons, and Caveats
To many, doing your own research may seem overwhelming. However, understanding the pros and cons of DIY market research can help you make an informed decision about whether to do it yourself or hire a research firm.
In-House Market Research has many benefits, including:
- Conducting projects with fast turnaround times
- Retaining ownership of the data you collect
- Implementing institutional knowledge
- Less expensive than hiring an outside firm
Eliminating the back and forth between yourself and the researcher helps streamline the research process for faster turnaround. However, be wary as too many do-it-yourself-ers find that they created poor goals and methods and end up hiring a professional in an attempt to “fix” their results.
Owning Your Data
When outsourcing, some companies don’t actually allow you to “own” all the data you’ve collected – even though you’ve paid for the research. They will require that you get all tables, reports, and charts from them and won’t provide you with your raw data. Doing your own research allows you full access to the results in perpetuity – a great perk if you’re planning to refresh the study year after year. You’ll want to think ahead about what you need and check with your researchers to see what input they need, and what output you can expect.
Institutional Knowledge: You Know Your Business
Institutional knowledge is often difficult to explain to an outside research firm: those things that you just know from past research, internal meetings, or nomenclature that your customers might use. When a project relies heavily on this knowledge, it may make sense to conduct the research yourself. However, be careful not to introduce bias into your results by making assumptions about your customers or the results.
Does In-House Research Save You Money?
Naturally, conducting the project yourself can save you money, but be aware, there cons associated with conducting your own research. For example:
- The process is time-consuming
- Resources required (besides time) can be overwhelming
- Potential for researcher bias.
Let’s examine each disadvantage a bit more. Writing out your research objectives, writing surveys, checking surveys, building your sampling plan, fielding the study, monitoring the sample, and analyzing the results are just a few of the big steps in a research project. Each of these steps needs attention to detail and a misstep can lead to lots of lost dollars.
The Small Business Disadvantage
While larger companies are usually in a better position to afford their own research; startups and smaller companies may find the expense both time consuming and costly. For example, doing your own research may involve interviews, direct observations, and tracking metrics – all without the benefit of a research consultant to help navigate the process. You may need to hire at least a few people to conduct the research, and you often must pay third parties to access secondary data sources.
Conducting your own research should include many safeguards, and that can be overwhelming. It’s important to have safeguards in place to ensure your data is accurate. For example, providing reliable sample sizes, having researchers double-check one another’s work and developing policies to eliminate the possibility of interviewer bias (such as assuming you already know the answer to a key question) or (mis)leading questions.
In-House Research Tips
Should you choose to do your own research, here are the top three things that come to my mind that you should watch out for:
- Build the right sampling methodology:
A key component of the research process is making sure you’re talking to the right person. You wouldn’t interview 12-year-olds about their preference in denture adhesives. Nor should you feel comfortable forecasting future sales from a sample of only ten people. A sound plan or a professional researcher can help make sure you are talking to the right number of the right people.
- Manage Timelines:
Managing a research project is time-consuming, and bringing together all of the key components in a timely fashion is a challenging, but critical part of the researcher’s job. Make sure you list out all of the responsibilities before you launch your project.
- Don’t go “quick and dirty”:
Quick and dirty is often that – dirty. Use caution when trying to knock out results fast, as you can often overlook critical steps, demographics, or key insights. More than one DIY market research project has been completed while failing to answer the one main question that needed to be answered.
Hiring a Professional Market Research Company – Pros and Cons
Sometimes, just thinking about conducting a research project on your own can be overwhelming. This might be the right time to call in the professionals. The advantages of hiring a market research firm to conduct your research include:
- Usage of best practices and drawing upon a breadth of experience
- The ability of the company to easily draw from information already available (secondary research)
- Trustworthy quality checks
- Extended resources to draw from
- Analytical firepower
Research Best Practices and Knowledge
Undoubtedly the greatest benefit to using a reputable research firm is the ability to draw upon that company’s best practices and resources. It’s like the difference between using a flooring contractor for your tile job vs. doing it yourself. That professional thinks, breathes, eats, and sleeps their job, so they’ve developed efficient and accurate processes and contacts in the industry. Professional market research firms are experienced in conducting research; most have developed partnerships and preferred rates with suppliers (e.g. recruiters, survey companies, etc.).
Enhanced Research Results
While it is rarely cheaper to use a research firm, you often find that the results are superior. That’s because ensuring quality is a huge part of any reputable research firm’s consideration. This is usually accomplished through many layers within the organization and is something most DIY market research cannot afford to implement. Additionally, you’ll find (if you pick the right one) that your research firm should have the analytical firepower to go well beyond what most individuals are able to accomplish. From complex statistics to uncovering those insightful “nuggets,” it’s hard to compete with a quality analyst.
Of course, there are a few disadvantages to hiring a research firm:
- Difficulty finding one that understands your business
- Additional cost
You should always perform due diligence when comparing options for professional research. If available, download some of a prospective company’s white papers or research documents. Get a feel for how accurate its methods are; ask for client references to see how the research has helped other businesses thrive. Always investigate the company’s website for professionalism and transparency.
Also important for trustworthiness is to try to retain a company that specializes in your business type. For instance, The Stevenson Company conducts research in many industries, including lawn and garden, consumer electronics, and automotive. Ask upfront how recent the data will be and how the company makes sure the data it collects is accurate.
Bringing it all together – DIY Market Research or Professional?
This quick post should help you realize that you need to balance your research needs with the cost, analytical firepower, and time required to complete a project. Professional research companies offer proven processes, resources, and analytics that few DIY market researchers can match. However, many businesses do conduct their own research, and it goes well. It’s also possible to aim for somewhere in between: hiring out for most of your research but going in-house for hyper-focused projects. If you are ready for advanced, accurate, and affordable research, check out all that TraQline has to offer. Contact our research professionals to get started today!
There are dozens of other considerations…I’d love your feedback…what other critical considerations did I miss? -EV