The Mistakes To Avoid in Your Market Research Budget
Your Market Research budget is a strategic resource. It’s not a cost, it’s the fuel in your revenue engine. Even small underspends for market research can mean staggering overspends for product failures and marketing mistakes. Because there’s so much at stake when you allocate your research budget, it’s worth it to make sure you get it right.
There are ways to stretch your marketing budget and ways to cripple it with leaks – those unexpected costs that pop up during your project. Let’s look at some of the most common research budget leaks so you can avoid them.
Failing to Tie Research to KPIs
At first glance, it may not be obvious how tying your research to KPIs (Key Performance Indicators) plugs a budget leak, but look a little deeper. If your research is outside the main current of your organization’s goals, not only will you waste your effort by failing to capture the attention of decision-makers, but you may be asked to go back to the drawing board with new research that is more aligned with key goals.
One way to avoid wasting budget on rogue research is to conduct a Quarterly Research Sync. This sync is simply a quarterly check-in with product and marketing leaders to make sure your research objectives match up to support your KPIs. Your sync should answer 3 questions:
- How well is our research aligned with our top goals this quarter?
- How efficient is our budget spend against our objectives?
- How will the insights specifically help the individuals responsible for KPIs?
If the insights don’t match, plug the leak.
Dependence on a Market Research Vendor
Market Research vendors that charge you to design, field and analyze your survey serve an important function, but be prepared to pay for it. Your research budget will quickly tick down to zero if you are overly reliant on a research agency.
Short, one-off surveys can cost you a just a few thousand dollars, but brace yourself if you need anything more substantial like a conjoint study which can climb into the low five-figures. Research projects that extend over longer periods of time like brand trackers or loyalty studies can even reach into the mid six-figure range with agencies. Using a research vendor can put your budget on the fast track to bust.
Too Many Ad Hoc Studies
You will enjoy significant spending efficiencies by setting up a handful of key studies you can repeat to benchmark over time.
Some common types of benchmarking studies are:
- Customer satisfaction (CSAT)
- NPS (Net Promoter Score)
- Ad concept tests
- Pre/Post advertising
- Brand awareness tracking
- Employee engagement
- VOC Programs
- Event Feedback
Because you can’t change a benchmarking study mid-stream without disconnecting the comparisons of future results from past, setting up a benchmarking study takes a little extra planning up front. But benchmarking pay you back handsome budget dividends over time in three main ways.
Benchmarking studies allow you to build real-time dashboards that always show your most recent survey results. This means you don’t have to be constantly creating (or paying for) snapshot reports.
Panel bulk pricing
If you use a panel for your survey responses, a panel vendor is more likely to give you a better price on survey completions when they are bidding on a longitudinal project versus a one-off.
After the initial setup, most benchmarking studies slide into “maintenance mode”, freeing you and your staff up to focus on other projects for greater productivity.
Surprised By Camouflage Costs
There can be a fair amount of hidden costs related to research. These expenses wait for you, camouflaged in the background ready to pop out in ambush if you don’t spot them in time. Some common hidden costs are:
Missing a response quota adds expense to your project because you need to scramble to find responses using Plan B, Plan C, or worse… the dreaded Plan D. These alternate sample sources might include panel providers, associations, trade groups, keyword advertising, email list vendors or corporate partnerships. When you build your sample plan, have a solid Plan A and execute it carefully so there is no need to pivot to a fall-back plan.
Translation costs are both extra expensive and extra crucial for research. They’re extra expensive because you need a high-quality translator who can maintain the spirit and meaning of your questions. And translation is extra crucial because slight nuances in language can dramatically alter the responses you receive and the conclusions you reach. Obviously having a research platform designed to handle multiple languages for one survey is a big time-saver, but don’t then take two steps back with a second-rate translation.
The US market research market is mature and there are dozens of vendors for any sort of research service you might need. That’s not so in emerging markets where sampling techniques, panels, analysis services and incentive fulfillment services can range from nascent to non-existent. This can drive up costs, both in time spent searching for services and in actual money as more of the services you need may be considered “custom.”
Maybe this has happened to you. You eagerly get all your survey data back only to realize it needs to be cleaned, or that you require a type of advanced analysis you didn’t anticipate. If you need to hire the analysis out, that just became a big new expense. Too many of these unexpected surprises will crash your cash.
There are two simple ways you can minimize the surprising shock of needing extra analysis. First, always run test responses for your survey before you launch to make sure your data comes back in the format you expect and doesn’t require cleaning. Next, create actual topline reports from your test data and present the results to yourself. If you can’t answer the questions you set out to answer, it means you’re headed for trouble with the real data and you need to adjust your survey design.
Qualitative / Quantitative Additions
Finally, it’s common to marry quantitative and qualitative research together to create context and depth in your findings. When you plan your budget, set money aside in your quantitative projects for an additive qualitative component and vice versa.
Needing More Context With Follow-Ups
Answers often lead to more questions. In fact, this pattern of question-to-answer-to-question means your research is on the right track because it led you to ask new questions you didn’t consider in the first place. That’s knowledge progress.
This iterative footpath of learning is what makes market research a creative and interesting career. It’s about discovering a new story chapter by chapter.
Don’t get into a place where your knowledge is locked because you’re out of budget for follow-up questions. Approximately 15% of your research budget should be reserved for impromptu follow-up studies.
Depending on your sample audience, providing incentives to your survey respondents may be the most expensive part of your work. While college students might give you 10 minutes for a chance to win an inflatable T-Rex costume, CIOs might require hundreds of dollars each.
Before your survey, make a detailed calculation of your estimated incentive costs. Not just the cost of the incentive, but also any associated fulfillment or tracking costs. If you operate healthcare, there are even federal regulations like the Sunshine Act that requires disclosure of monetary incentives to healthcare professionals.
You can estimate your incentive costs by considering your quota target, expected response and completion rates, and the cost of your incentive per survey completion.