So, you’ve made the decision–you want to dive into market research to help boost your business somehow.
When it comes to conducting market research, your organization has two choices:
- Conduct the study through DIY market research
- Conduct the study using a third-party market research firm
I suppose a third choice exists of not doing the market research at all, but we wouldn't recommend this.
Each of the first two options provides its own unique advantages and disadvantages.
As a third-party market research company, it would be in our best interest to convince you why you should use an outside party for your market research efforts, right?
To support this notion (shameless plug), let's explore the reasons why outsourcing all or portions of your market research work in your favor. Hopefully, this post will shed some light on your choice.
Benefit #1: Confidentiality
Customers who respond to surveys often fear the feedback will be directly tied to their names.
They wonder, "If I say something bad will this impact my relationship?" or "Will this impact the service I receive?"
In fact, only 1 in 26 customers will end up vocalizing a negative brand experience. More likely than not, this is due to wanting to remain anonymous or not having a trusted third-party conducting the research.
It has become more common recently for companies to follow up and respond to negative feedback directly, which has potentially largely influenced candidness in responses.
Using a third-party market research company or proverbial "middle-man" ensures responses are kept separate and out of the immediate hands of the sponsoring company doing the research.
Aside from customer surveys, confidentiality is the most crucial factor in market research studies such as:
- Brand awareness surveys
- Employees surveys
Why confidentiality is important for brand awareness surveys.
Another advantage of using a market research firm tied to confidentiality is the ability to blind a study.
If your organization wants to measure the perception or awareness of your brand in the community and your logo or name is slapped all over the online survey, it will certainly skew results.
Therefore, using a third party for brand awareness surveys will blind the research (leaving respondents unaware of the sponsor) and can provide more reliable results.
Why confidentiality is important for employee surveys.
The third-party tie-in may never be more important than it is in an employee survey. Sponsoring and managing an in-house employee survey is playing with fire.
Although confidentiality and anonymity can be promised in this situation, it is never fully believed by employees. Skepticism breeds a lack of trust.
As a result, staff members are not 100% truthful in their feedback -- in fact, it could be the reason why employees aren't answering your survey.
In turn, leadership and human resource teams are making internal decisions based on illegitimate data.
To effectively increase employee retention rates and improve team satisfaction, outsourcing your market research is imperative.
💡 The Key Takeaway: Using a third-party market research firm ensures the confidentiality of respondents. This is crucial for quality survey responses, especially when conducting customer or employee surveys.
Benefit #2: Perspective
After working on the client’s side of market research for over 15 years, I learned there can be some divisions that lack self-awareness or perspective.
This is not a bad thing; it is just human nature to be caught up in your daily work that it is a struggle to take a step back.
Using a third-party market research firm brings in a fresh set of eyes or a new approach that can provide a multitude of benefits.
For instance, sometimes organizations get so caught up in doing things the way they always have, they lack innovative and fresh ideas.
Gaining perspective with customer satisfaction surveys is especially important. Here's why.
Why perspective is important for customer surveys.
Continuous customer feedback surveys are at the heart of market research.
When most organizations think of conducting research, they think of collecting feedback from their customers to improve satisfaction and retention rates.
However, this type of study may be overlooked because organization leaders think, “I already know everything I need to know about my customers.”
The fact of the matter is consumer purchasing behaviors and patterns are constantly changing.
It can be difficult to correctly assume what they want from your business without asking them.
Customer satisfaction companies have years of experience to understand what type of questions to ask – and how to ask them – based on your unique business objectives. This process offers a whole new perspective on who your customer is and how you can better serve them.
Interested in hearing what our third-party market research firm likes to ask in customer surveys? Watch this video.
Benefit #3: Time Savings
This is one of the more tangible and easily explained benefits of using a third-party market research vendor.
Outsourced market research agencies work as an extension to your internal team to turn around analysis, insights, and recommendations faster than if you had done them alone or in-house.
Relying on a market research partner also allows your team to focus on their day-to-day tasks and priorities. They will no longer have to learn how to write, program, field, and analyze a survey – which, for market research beginners, can be a massive undertaking.
The additional resources that third-party market research companies possess may also help shorten the time frame for a project as a whole.
For instance, it may take an internal team 6 to 8 weeks to complete an intercept survey project, whereas a third-party firm could complete it in half the time.
The fast your organization is able to collect insights, the faster you will be able to improve business and marketing strategies with data-driven decision-making.
💡 The Key Takeaway: By investing in a third-party firm, internal teams can focus on their job duties without stressing out over gathering research. This lays the foundation for collecting quality, actionable feedback.
Benefit #4: Expertise
Using a third-party market research firm may provide your organization with access to talent and experience you may not have available in-house.
This could come in the form of a skilled moderator to run your focus group sessions (be selective if you choose this route–we believe there are certain must-have qualities a focus group moderator should have).
Or, the expertise could come through a unique methodology or analysis technique such as regression or discrete choice.
Another form of expertise could be experienced in a specific industry segment such as:
- Bank and credit union market research
- Higher education market research
- Manufacturing market research
- Consumer packaged goods market research
- Healthcare market research
- Automotive market research
Speaking more generally, a third-party marketing research firm can leverage its years of experience to correctly execute a project from beginning to end.
Remember! The science behind survey writing is intricate.
One word in a survey question can skew the data in a big way. If your team is taking the time to conduct market research, isn’t it important for the data to be reliable?
💡 The Key Takeaway: You can rest assured that the information you receive from a research firm is high-quality (depending on the firm, of course). This level of talent is often not found internally and is a great reason to turn to an outside team.
Benefit #5: Capabilities
Among the benefits of market research firms are their extensive list of capabilities.
When we mention capabilities, we are referencing specific advanced survey tools and market research resources you may not have access to in-house.
The advanced survey tools owned by a professional firm, like Drive Research, will give you an opportunity to access real-time data or create complex surveys with challenging skip patterns.
Take it from us–the capabilities of advanced online survey tools and platforms are endless!
Some of the best market research companies also have quantity and contract discounts with other suppliers which help you obtain more affordable rates.
Here’s an example of using a panel vendor for an online survey.
As a separate organization going to a panel vendor like Critical Mix, you may receive a cost-per-complete rate (CPC) that is much higher than they may give a preferred vendor who uses their panel many times throughout the year. Ultimately using a third-party market research firm with this type of relationship creates lower project costs for you.
💡 The Key Takeaway: Third-party teams use advanced research tools, which internal teams simply won’t have access to.
How to Choose A Third-Party Firm
Okay, so we went over all the benefits you get when partnering with a third party, but what factors go into choosing a market research company?
We recommend considering important factors like:
- Industry Experience
- Team communication
We meant it when we said working with an outsourced team lowers the overall cost of your project. But that doesn’t mean it’s a factor to completely disregard.
Your project cost is dependent on the input amount of the research team and which members of that team will be working on it. Meaning, the more experienced staff working on your project, the higher the rate.
Just because you’ve found a market research team you’re interested in doesn’t mean they’re the one (don’t worry, there’s plenty of fish–er, firms–in the sea).
Spend some time researching selected firms before committing.
Do you know if they have experience in relevant industries to yours? For instance, if you want to conduct healthcare research, but you can see that your proposed team has no experience in that field, it’s a good idea to look elsewhere.
Transparency, trust, integrity, honesty–did we list enough synonyms there? Basically, we’re saying to take your time in choosing a market research team so you can ensure they’re trustworthy!
Of course, this is hard to measure if you’ve been newly introduced to a team. However, it will soon become clear if they’re passionate about the work they do. Even more important is their dedication to getting your needs met as a client.
Get chatty with your team. Ask who will be working on your project, as this can help you gain a better understanding of overall outcomes.
Is your project being handed off to a freshly-hired analyst new to the field, or do you have those with more experience on your side?
Having an open communication strategy with your research team will help you see who has a final say over your project.
Still on the fence? Read our blog post, Should I Hire a Market Research Firm?
💡 The Key Takeaway: It’s easier to know how to choose a firm when you feel comfortable with your project in their hands. Be open with potential firms about your goals as a client.
Drive Research is a full-service market research company located in Upstate New York. Our team of experts helps organizations throughout the country use data-driven decisions to move business and marketing strategies forward.
Interested in learning more about our market research services? Contact us through any of the four ways below.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
George is the Owner & President of Drive Research. He has consulted for hundreds of regional, national, and global organizations over the past 15 years. He is a CX-certified VoC professional with a focus on innovation and new product management.
Learn more about George, here.