Like so many Americans, businesses today are feeling the pinch. In July, the consumer price index hit 8.5%, just slightly down from June’s rate of 9.1% (the highest inflation rate in over 40 years). Hence, many businesses are spending more on rent, telecommunications, labor, and other key inputs. So what are businesses to do? Some are searching for ways to trim their budgets, including funds earmarked for market research. As a leader in B2C and B2B research, we have a few budget tips to help you save, without severely compromising research quality. Let’s dive in!
1. Limit Questions: You’ve heard the cliché “quality over quantity” in reference to food, clothes, friends, etc. As it turns out, it applies to market research too! If your budget is tight, evaluate whether each proposed question is truly critical (i.e., it provides information on a key performance indicator) or simply nice to know. Be sure to consider the stage of your business—information that seems essential may not be for several years. Remember, each question adds costs, regardless of its value.
2. Target Client Base: There are numerous valid reasons to survey a broad population. However, if you know your product or service appeals to a specific population segment, target your market research accordingly. For example, there is no use surveying men on feminine hygiene products or octogenarians on skateboard preferences. Cutting the number of research subjects will help with costs and avoid a common research mistake.
3. Glean Data from Each Transaction: It’s great to collect information from prospective clients, but it’s even better to learn from real ones. Every time a client purchases your product or service, seize the opportunity to gather data on their gender, age, location, purchase drivers, and type and value of purchase. Techniques might include observing the client or reviewing information provided (for example, the delivery address can reveal the client’s location). With enough information, you can begin to discern patterns and other lessons.
4. Leverage Online Tools: We live in an incredible age of technology. With just a few internet searches, we can access a wealth of free market research tools to help develop questions, format studies, and analyze data. You can use these tools to conduct more basic consumer research and to complement the work of professional research firms (which can offer enhanced quality and capabilities).
Why stop there? While you’re online, scour social media for intel on your company, your products/services, and your competitors. Then download industry reports and economic lookouts to learn about key trends in your sector (executive summaries are often available for free). Finally, check out your own website analytics to understand your site’s performance and visitors, including key demographic information.
5. Buddy Up: A market research study may seem expensive during tough economic times. But what if you split the cost with one (or more) other companies? Think about businesses in search of the same kind of information—not competitors but those in similar markets. Examples might include computer hardware and software companies, or car and gas companies. Reach out to those businesses and propose an alliance.
6. Probe Your People: Your employees and advisors are already on the payroll and know your products/services intimately, so use them! Seek their insights on everything from your strengths and weaknesses, to branding and competition. Sales and customer service teams are often a top source of information. Plus, they are likely to speak honestly and thoughtfully, since they have a vested interest in your success.
As you weigh these strategies for reducing market research costs, there are other considerations to keep in mind. Foremost, market research is not just another business cost, it is an investment. Every dollar spent on market research can generate significantly more in earnings or savings, assuming that the company uses research insights to shape decision-making and follows through with appropriate actions.
For example, market research can reveal if a planned product line is doomed to fail. If the company decides, in response, to cancel production of the line, it could potentially save millions of dollars. Such savings could vastly exceed the savings achieved by cutting back on market research.
If times are tough for your business, consider implementing the market research budget tips listed above. But don’t scale back on market research too much, which may prove counterproductive. To strike the right balance, contact our experts at Op4G, or read our blog to find the market research company that meets your needs.