Outsourcing Market Research Services - Why Your Business Should Consider It
So, let’s review more about it, where it fits in, the benefits and related factors you should consider before outsourcing market research services of your company.[/vc_column_text]
Outsourcing Market Research Services Overview
Market research is the process of evaluating new (or existing) products or services through direct research with potential (or existing) customers. Accordingly, a company uses market research to identify a potential market by getting opinions and related data from representative customers about their interests in a product or service.
A company will conduct market research directly (in-house) or will choose outsourcing market research services (outside). Basically, the market research process is done via focus groups, call center telephone surveys, or online questionnaires. Generally, market research is a component of the research and development and/or marketing areas of a company.
Why Invest?
The “Why” investment in market research is for a company to determine how a market segment related to a product or service will respond to it. For example, the data gathered allows a company to segment the market or differentiate the product/service. Consequently, the company uses this information to tailor product features or marketing advertisements to prioritize audience desires, resulting in positive acceptance.
As an example, the iconic Oreo cookie brand uses its secretive, in-house staff to do market research. At this time, over 65 different flavor variations of the cookie have been introduced, each tailored to a specific market segment. As a result, besides the increased sales of the special flavor variations, the iconic plain vanilla Oreo sales are up more than 22%.
Why Should You Do It?
Most companies don’t have an in-house team capable of taking on a significant market research project. While others that have the in-house capability may instead choose outsourcing market research services to a third-party provider for a variety of reasons.
If your company CAN do in-house market research, whether you choose to outsource likely comes down to a cost/benefit analysis. Specifically, do the benefits of obtaining market research information, with inside staff and resources, outweigh the opportunity costs, some loss of control, and fees of an outside provider?
Research Budget
So, as a starting point, how much should your company consider budgeting for your market research project? Obviously, there are many factors to consider in determining your market research budget. Once you estimate your budget, compare the cost of paying your internal staff versus the cost of outsourcing market research services.
Your company in-house alternative costs will include:
- Full internal research staff labor costs and benefits.
- The cost of work NOT performed by your internal research staff and lost opportunities.
- Are the qualifications of the internal research staff able to complete the project with the quality required?
- Poor research by non-professionals often results in errors as they plan and execute a market study. Consequently this makes for a waste of time, misleading results and most costly of all, bad business decisions.
So, considering the above, here are some of the primary factors to consider when outsourcing market research services.
Outsourcing Market Research Services Factors
As mentioned outsourcing market research services offers a variety of advantages to your company. Accordingly, based on WHY you choose to outsource your market research will determine how best to do it, and achieve the desired results for your company.
1 – Outsourcing Market Research Services – Lack Of Resources
When your company does not have an internal research team, or cannot take on additional projects, outsourcing market research services is your only option. So, how best to do this?
Selecting your company’s market research provider is similar to hiring other business partners. Basically, your due diligence starts with a clear idea of WHAT your company’s market research needs are. Then, begin the process of reference checks, interviews, initial meetings, etc.
Considerations
Here are some considerations in selecting your market research provider:
- Does the market research provider fit your company work style? – Hands-on, off, frequency and manner of communications, etc.
- Are your company business needs well understood by the service provider? – Is the WHY your company is outsourcing this research clear?
- What are the methods of market research to be used? – Focus groups, interviews, surveys, third-party publications?
- How much and how will the research project cost? – Fixed fee, per research hour, per deliverable (focus groups, interviews, survey).
Think about the end of the market research process. Especially consider what your company will gain from the market research deliverables. For example, will it identify a new market segment, determine changes in an existing product, or determine whether to launch a new product/service? Simply put, how will your company apply the market research data?
2 – Outsourcing Market Research Services – Cost Savings
Traditionally a company will consider outsourcing as a means to improve its competitiveness, performance and profitability. Consequently, outsourcing market research services should be a consideration for your company.
One of the primary outsourcing benefits, not surprisingly, is cost savings. While outsourcing to an external market research provider may have personnel costs similar to in-house staff, the infrastructure support costs are usually lower. Additionally, few companies can track personnel research costs when combined with other business activities of an internal team.
These costs are especially significant for collecting market research data via telephone contacts and focus group surveys. Basically, the market research provider can amortize these costs across its client base over a long-term basis.
Benefits
Your company benefits by paying only for the services needed for its research project. Also, your research costs are transparent and can be negotiated on a transaction basis, usually a mix of market results (survey, questionnaire, interview) or labor-hour.
Finally, it is worth noting that external market research providers normally outsource their data gathering activities. Basically, their key value-added is the expertise provided in structuring the market research project and analysis of the data gathering results.
3 – Outsourcing Market Research Services – Scaling Needs
Outsourcing market research services is often needed when a company’s needs change quickly. So when you need fast or a new type of research, an external provider can scale resources more efficiently. Also, for companies with limited research experience, these activities may be initially small, requiring a small budget and investment.
Start-up time for market research services is less than investing in an in-house staff. Consequently, fast completion and review help determine whether outsourcing market research services are cost-effective, producing the required business results.
An external market research company can scale its services according to the demands of your business and budget. For example, let’s say you want to start with a small pool of prospects and gauge the results first. Then, you can broaden your outreach as they can scale up their services.
In summary, outsourcing market research services facilitates scaling company resources to adjust to changing needs. Consequently this allows for managing costs, reducing risks, and provides clear metrics of the results and return-on-investment.
DISCLOSURE: Nexus Teleservices is a Nearshore Outsourcing Market Research Services business provider.
Outsourcing Market Research Services Conclusion
Outsourcing market research services work. Generally a company chooses to outsource market research to improve it’s competitiveness, performance and profitability.
Outsourcing market research services provides an external, unbiased source of information for business decision-making. Consequently, you should consider this to help investigate and answer questions related to your company’s business strategy, products/services, and competition.
Please call us at (888) 339-6699 to discuss how our call center market research services will serve your business needs or Contact Us.
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