You decide to conduct a marketing research study. With objectives clearly defined you contact three research suppliers to get competitive quotes. All three come back with roughly the same approach to conducting the research. And all three quotes make you choke.
You might think your only choices are to pay the going rate, lower your cost by compromising on the quality of the research or forgetting about the research altogether.
But assuming you are intent on conducting the research as planned, the good news is you can save money by either taking a more active role in completing the research or by negotiating with research suppliers. Here’s how!
Understanding Supplier Pricing
In general, there are two types of research companies. There are full-service research suppliers that provide research planning services, project execution and control and analytical services. And there are field-service suppliers whose primary function is to provide the actual data needed to address the research objectives.
Full-service suppliers will give project specifications to a number of field-services. This includes the type of study they wish to conduct, the anticipated length of the questionnaire, the profile and number of respondents they wish interviewed and the manner in which they want to collect data.
Field-services, in turn, price their data collection services to their full-service supplier clients, who then mark up those services when quoting their price to you. If you become the direct client of the field-service supplier, you will save this markup.
Saving Money on Focus Groups
When it comes to focus groups, full service research suppliers typically markup field service quotes by 50%. You can save this markup by contracting directly for focus group field service fees associated with:
- Renting a facility where the focus groups will be conducted
- Recruiting costs associated with screening the right respondents for your study and making sure that they show up at the right time.
- Monetary incentives to respondents for participating
- Refreshments, food, videotaping or other material costs necessary to complete the project
The focus group service will charge both you the full-service supplier the same. If, for example you want to conduct four focus groups, the field service cost might be £5000. By contracting for these relatively simple tasks yourself you’ll save £2,500, or the 50% full-service supplier markup.
If you don’t have a moderator you’ve worked with, ask the focus group facility you plan to use for recommendations and get a number of competitive quotes for the professional fee the moderators will charge.
To find a focus group facility in the London area click http://www.greenbook.org/). Otherwise, Google “Focus Group Facilities for whatever city is appropriate.”
Saving Money on Survey Research
In the case of a survey, via telephone, internet, post or personal interview, the full-service supplier will pay field services for:
• The professional interviewers needed to complete your study
• Charges associated with using phone, internet, postage, etc. to collect your data
• Incentives that might be required to ensure respondent cooperation in the research
• Questionnaire tabulation
• Any special statistical procedures that might be necessary
If you choose to work directly with field services for your survey, and save the mark up, be prepared to give the field service exact specifications for your survey. Field service personnel generally lack experience designing or analyzing research data unless you happen to find a service where there is someone on staff with survey design experience.
To find a survey field service Google “Telephone or Internet or Mail research interviewing services in your preferred city. And if you need a researcher who can help you write your questionnaire and analyze the data, again, ask for referrals from the field service you are using and get several quotes for the professional services you need.
Saving Money When Using Full-Service Supplier
Many companies simply don’t have the expertise, time or desire to work directly with field services. Their distinct preference is to find a full-service research supplier who can guide them in effectively designing and executing their research studies.
If this is your preference you can still save money by knowing how full-service suppliers price their projects. This is done in essentially two ways:
1. As a fixed-cost project. Fixed-cost projects are all-inclusive and the most popular. That is, the supplier will quote you one cost, which will include all professional fees and field service costs.
2. As an hourly plus field service costs. If you ask, most full-service suppliers will give you hourly rates for the various professional services associated with your study. You should have for the hourly break down for the various professional fees as well as a separate cost for the field services.
You should find several research companies that provide both field service and hourly plus out-of-pocket costs and compare quotes.
Full-Service Suppliers for Focus Groups
The fee a focus group moderator will charge is roughly £1,500 per group, which includes all project planning, moderation, report preparation and recommendations. That comes to £6,000 for a typical four- group study. Of course, moderators will take a markup on the field service they use. To save money on moderator fees, follow these guidelines:
1. Get a two competitive fixed price costs and ask a third moderator what would be charged by working on an hourly basis.
2. Don’t contract for a full report. You can usually get 90% of what you need from a summary report and by observing the groups.
3. Ask the moderator to give you tiered pricing. There could be a substantial savings on the moderator’s fee when going from say two groups to four, six or eight groups.
4. Determine whether you can conduct your focus groups in smaller, less-expensive markets. Try to stay out of the very large markets where field service costs tend to be 10% to 20% higher.
5. Usually audio tapes or CDs are all that are necessary to analyze results and to ensure a record of groups—and are provided free. Don’t pay for videotaping unless absolutely necessary
6. Finally, find a moderator who will allow you to contract directly with the field service but will still assist you in working with the field service.
Saving Money on Your Survey
Assuming you have done your due diligence and have found several full-service research suppliers you trust, follow these guidelines:
1. Always get two or three fixed-cost estimates from full-service suppliers. The trick is to make sure that all the suppliers are giving you costs for exactly the same project specifications.
2. Ask another supplier to quote separate field service costs from professional fees. Here, many suppliers tend to quote lower fees and/or take less of a markup on their field services.
3. Offer to pay 75% of the cost of the project up front, and ask for a discount. You can often get a lower price by making higher upfront payments.
4. Find a small research supplier you trust. Assuming that company is not swamped with projects, there is no question that costs will be lower than what you’d receive from a larger research supplier.
5. Wait on the project. Many full-service suppliers cut prices when business is slow.
If you can realize a savings by waiting, lock in a lower price a month or two down the road.
6. Consider more than one project. If your supplier is aware that the first project will lead to a second, and you are ready to commit to more than one project, you are likely to get lower costs on both.
7. Refer the supplier to another client. Give the supplier a lead that turns into another client and watch what happens with your final invoice.
8. Research suppliers usually quote their studies plus or minus 10%. For example, £25,000 +/-10%. If you’re happy with your completed project and plan to use the supplier again, tell them, and inquire about the possibility of lowering the final invoice by some percentage.
9. Offer to pay the research supplier’s field services and other out-of-pocket costs directly. Any financial burden that you will assume might be cause for the research supplier to lower their fees.
By following these guidelines you can save 25% to 50% on the cost of most marketing research studies. While you must be the final judge as to whether it is time well spent, consider the risk of abandoning the research altogether and making risky business decisions in the dark.
Bob Kaden is the author of Guerrilla Marketing Research, MORE Guerrilla Marketing Research and co-editor of Leading Edge Marketing Research—21st Century Tools and Practices.(www.amazon.com) Visit www.kadencompany.com
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