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Choosing a Market Research Firm
Before launching your new product line, it’s essential to know the marketplace - and hiring a market research firm is an excellent way of assessing the level of demand. However, once you’ve made the decision to outsource, it’s important to pick the right company. Cultivating a relationship with a capable market research company can give you the edge over the competition … but operating on bad market research is even riskier than operating on none.
First of all, you should write up a list of several research firms, and then weigh each company against the others. As you evaluate them, here are a few things to ask yourself:
Once you’ve made your decision, find out who will be your point of contact. Because it is the market research company’s job to cater to your needs, you should appoint one individual within your company to act as the resource person for the research contractor. This will ensure that there is smooth communication between both companies, and that there will be greater accountability on both ends. Now is also the time to establish a firm timetable of deadlines, and schedule periodic status reports. What you ask for before you sign is what you will get - so make sure you put all your needs and demands on the table.
Market research is an invaluable aid to any publicity campaign, and can literally save you millions of dollars. After all, in the business world, there are very few mistakes that can compare in severity to launching a new product line - and discovering only after the fact that there is no demand for what you are selling. But although market research is obviously important, it’s sometimes less clear whether that research should be conducted in-house, or outsourced.
One of the most palpable advantages of outsourcing is that market research firms specialize in assessing marketability. While your employees are trained to produce and sell your product, market researchers know how to gather, analyze and report on information. Not only does this translate into experience, but it also means that market research companies have access to software (e.g. Microtab, StatPac, etc.) and facilities that you probably don’t - like two-way mirrors and industry-standard taping equipment. A large market research company will probably also employ statisticians, psychologists, and other relevant professionals who it just wouldn’t make sense for you to employ on a permanent basis.
And believe it or not, sometimes the fact that the company is an outsider can be a real advantage. When reputable market research companies conduct focus groups and surveys, they never reveal their employer’s identity, and that kind of anonymity can be extremely valuable. Particularly if your new product is highly innovative or otherwise sensitive in nature, you may not want anyone knowing about it until you’re ready to put it on the shelves.
Finally, because the market researchers are not affiliated with your company, you can be assured of their objectivity … something you may not be able to guarantee if marketing issues have become politicized within your own business.
All this being said, there are some drawbacks to hiring an outside company, and they are the same risks that apply to any sort of outsourcing. Clearly, no outside company is ever going to be as familiar with your business’ needs as its own employees are. You may have to spend some time explaining the background behind your company and product, and even then, there’s no guarantee that the market researchers will end up with an accurate portrait. You will also have to resign yourself to surrendering much of your control over the process, because the other company may have its own set of procedures in place. You may find that the market researchers don’t agree with you on how things should be done, or that your project has to compete with several others for the researchers’ time.
So is outsourcing worthwhile? Probably. Even if you disagree with how the market researchers conduct the campaign, there’s a pretty good chance that they’re right - and that you’re wrong. Just to be sure though, one of the smartest things you can do is to find out about the research firm before you commit. Some research companies may be slow, inefficient, or sloppy … but if you hire a capable one, it might be just what you need to get your product launch off to a jump-start.