Running your business requires information. And just like at certain points in life, we often don’t know what we don’t know. When there are gaps in our knowledge, we want to find out more so that we make the right choices. And in business, the same is true. Making smart decisions begins with gathering as much information as possible. And the best place to start is with market research.
However, most small businesses, and even some major corporations, don’t have dedicated, in-house market research departments or resources. Fortunately, there are a number of outstanding and reputable market research agencies and firms that can help you gather all of the data, insights, and information you need in order to carve a path toward success. Here we’ll talk about when and why you might consider hiring market research firms, the different methodologies they use to gather data and insights, and some best practices when it comes time for you to hire a market research agency to help you with a new product or service launch.
What is a Market Research Agency?
Simply put, a market research firm is a specialized agency or unit that is dedicated to performing market research in a variety of industries and applications. They may specialize in different methodologies, and they may have unique backgrounds in very particular areas, but broadly speaking, market research companies are able to identify target audiences and perform a variety of data collection processes to help businesses and organizations succeed.
What are the Different Types of Market Research Services?
Market research services can be broken down into two basic categories—qualitative research and quantitative research. In basic terms, qualitative research is focused on the stories, experiences, and feedback of target audience groups and demographics. Quantitative market research is focused more strictly on numbers, such as granular demographic and perception data, statistics such as the percentage of buying public aware of your company or products, and more. Both types of research are often beneficial in identifying business needs and guiding business decisions.
Qualitative research often involves combining a number of approaches. Qualitative market research projects or processes may include focus groups guided by moderators, social media or online surveys and customer experience information, questionnaires of current or prospective customers, in-depth interviews of respondents, and many other options. From this information, research analysts will generate qualitative research reports, detailing and highlighting key points discovered through the process.
Quantitative research may also utilize some of these methods in the data collection process, such as questionnaires, focus groups, and so on. The difference is that quantitative research is focused solely on the numbers, and will convert the feedback and information into percentages and numbers that reflect clear trends or areas for improvement.
Why Do I Need to Invest in Market Research for My Business?
Spending the time to find a great market research firm for your business or startup is always worth it—and for a number of reasons.
While you no doubt have extensive knowledge of your products or services, your brand, and so on, and while your marketing team likely knows your existing audience quite well, there is always a significant amount of information that you simply don’t have. From new markets and opportunities to perceptions of current brand and product lines, the more information you can gather before a launch, the more likely your team can adapt and take advantage.
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Should I Hire a Market Research Agency or a Freelancer?
You have a number of choices available to you when you decide to seek outside help from a market research firm. You can contract with an agency, of course, or you may look for a freelance research analyst. Let’s take a look at some of the pros and cons of each.
Positives and Negatives of Working With an Agency
Working with a market research agency brings with it a lot of upsides. First, there will likely be multiple research professionals involved in your project, not just one individual. This provides you and your company with multiple perspectives, as well as the combined years of experience and resources of an agency (access to respondents and focus groups, data collection and statistical analysis software, etc.).
Some considerations that come with choosing a market research firm include budget or cost, dedicated resources, and timing or schedule. A firm staffed by expert research analysts will certainly have a slightly higher price tag than a freelance analyst, and you want to find out from your chosen agency whether they have the bandwidth to dedicate to your research project.
Positives and Negatives of Freelancers
Some of the positive attributes of working with a freelance research analyst directly address the downsides of an agency. For example, a freelance research professional may be able to dedicate more of their time to your project and may have a more flexible schedule. They may also have a lower rate than what a full-service research agency would charge.
On the other hand, freelance market research professionals might not have the same access to tools and resources as an agency. They may not be able to pull together sufficient participants for a focus group, for example, or they may not have access to certain statistical analysis software that would be critical in developing research reports for your company.
Why You Should Hire a Market Research Agency
Market research pays dividends, even if not directly reflected in the bottom line. Research professionals and research analysts who work for dedicated research firms can offer your company all of the benefits of having an entire in-house department devoted to market research, but at a fraction of the cost. The research findings they provide can also help not only with specific product launches, but with identifying broader opportunities in branding, corporate identity, departmental efficiencies, new avenues for marketing and public relations, and much more.
The benefits of working with a market research firm far exceed both the downsides and the price tag. This is especially true thanks to high-quality digital resources and the growing years of experience that firms around the world now have. You no longer need to find a market research agency based in New York or Los Angeles; there are outstanding market research experts in most cities, and they specialize in working with small businesses and startups.
Hiring a Market Research Agency
Now that you’re prepared to look for a team of market research professionals to help your business succeed, let’s dive into some questions and advice for getting that process started.
How Much Does It Cost to Hire a Market Research Agency?
Every business service has a wide range of potential costs associated with it, and market research is no different. Some of the pricing will vary based not only on the size of your company or the amount of research required, but also on how much in-depth information you need (and have the budget for).
If you are an entrepreneur or startup looking to gather some top-level industry information before you get started, basic research reports can range anywhere from $500 to $2,500. Again, this depends on the methods used and how much information the firm needs to gather and analyze.
Established businesses may want to go much further, getting an in-depth report. Full-market reports can range from $2,500-$10,000 and include much more information including some of the items we mentioned above (market analysis, brand awareness, projections for future business, product- or service-specific opportunities, etc.).
The highest level of market research reporting can run anywhere from $20,000 to $40,000. These types of reports and projects are incredibly detailed, down to very specific information about sales performance in multiple countries and regions, competitor analysis, and much more.
The main takeaway as far as pricing goes is that it all depends on what your business needs, and whether you are gathering information for the short term or want to have a comprehensive analysis to guide your entire business into the future.
How to Find a Reputable Market Research Agency
When you begin interviewing market research firms that you want to work with, or even before you start the process of setting up formal meetings, there are a number of steps you can take to help you narrow down the options.
Many reputable market research firms will publish case studies detailing their successful work with both small and large companies. Real-world examples of their successes are a great way to understand not only whether they are capable, but also what industries and what types of businesses they have experience with.
You may also be able to get your hands on sample research reports to better understand the kind of data that they collect, and how they compile that information for clients to best utilize.
Testimonials are another great tool, as they can provide insight directly from past clients on how the agency does their work and how their research has led to improvements in sales or marketing for companies like yours.
You might also spend some time reviewing their social media presence, including LinkedIn. Current employees and clients may share valuable information about their market research efforts that are ongoing, or recently completed projects.
Traits to Look for in a Market Research Agency
As you review your options for a market research company, consider asking about or looking for the following traits:
Project management process
What tools does the agency use to track and manage your project, and how will they keep you informed of progress and updates?
Audience segmentation
How does a firm identify prospective customers or clients for your business, and is that information included in your research report?
Data collection methodology and tools
What software do they use for both qualitative and quantitative research? Are they capable of both, and will they utilize both for your market research needs?
Statistical analysis
Do they provide an easy-to-understand interpretation of statistical results? How is the data analyzed and translated when it comes time to write the report(s)?
Mistakes to Avoid When Hiring a Market Research Agency
Before you get too far down the road of choosing and hiring a market research firm, be sure to avoid the following pitfalls.
Not having a budget and goals established
Diving into a process like market research blindly will not provide you with the kind of information that can help you succeed. Be sure to know exactly what you’re willing to spend and what you’re hoping to achieve.
Not exploring multiple options
Just like shopping for office supplies or technology, set a rough goal for the number of firms you want to interview and consider. You may get some price quotes that are very close, or you may get a wide range of costs and services. But the more options to explore, the more likely you are to choose the right market research firm for your needs.
Not thinking ahead
Working with a market research agency should provide you not only with answers to today’s questions but also a roadmap for future actions. Be sure to think about your company five and ten years from now, and what information can help you get there, before hiring a market research agency.
Post-Hiring Expectations
Once you’ve chosen and hired a firm to work with, you should expect to have a genuine partner in the process. They should be dedicated to helping you better understand your customers, your brand, and your needs, as well as areas for improvement.
You should also expect to have open and clear lines of communication. This includes choosing a firm that will help you not only conduct market research but better understand both the process and the results. As your business expands, adds new people, or adds new products and services, having results and reports from a reputable market research agency to guide those processes is a tremendous asset.
Positioning for Success
With the information provided here, you should be ready to start the process of selecting a market research firm that best fits the needs and goals of your company. Get your team together, establish the goals you’re hoping to achieve and the questions you need answered, and then select a partner who can give you the best chance at success.