The cost of market research depends on a variety of factors – audience, methodology, and incentives to name a few.
While there is no average number for market research costs, it can be helpful to understand what impacts price.
In this blog post, we'll discuss these factors in more detail as well as compare the costs of different types of market research.
To get a custom market research quote from Drive Research and learn how much your unique project will cost, complete this short form.
What impacts how much market research costs?
Well, there are several factors at play.
Again, while there’s no “average cost” because every project is unique, there are a few factors to consider thinking about if there are budget concerns for a market research project.
Type of market research you are conducting
There any many different types of market research. From online surveys to in-home usage tests, there is a solution that can help meet any business's objectives.
However, with this variety comes various market research costs.
For example, an in-person focus group will likely cost more than an online focus group.
With a traditional focus group, brands have to factor in costs related to:
- Renting a focus group facility
- Recruiting from a smaller sample
- Higher incentives
Whereas, online focus groups eliminate many of these added line items.
There are little to no costs associated with virtual meeting tools like Zoom to host the remote focus group.
It will take a qualitative recruiting company less time and resources to find participants because they can dial in from anywhere.
There is no travel needed.
This same time of scenario can be repeated for all methodologies when discussing market research costs.
For a highlight real of the most common types of market research, watch our video below.
The number of survey completes/groups/interviews
This refers to the actual number of fully completed surveys, focus groups, or in-depth interviews.
Fewer respondents/groups/interviews will be less expensive.
That’s because it will take less time and resources for a market research company to recruit participants, clean the data, and analyze the feedback.
However, keep in mind, with less comes an increased margin of error. In other words, receiving 25 survey completes does not offer high reliability of the results.
As a general rule of thumb, here are the approximate margin of error for several common levels of survey completions:
- 100 completed surveys: +/- ~10%
- 200 completed surveys: +/- ~ 7 to 8%
- 400 completed surveys: +/- ~4 to 5%
- 1,000 completed surveys: +/- 2 to 3%
The more data, the better.
This is a big one. It can be easy to assume reaching a target audience is much easier than in reality.
There is a direct correlation between the size of the population that needs to be targeted and the price of that project.
The more complicated the target audience is, the more it will cost to reach that specific audience.
For example, you will see higher market research costs if you are surveying pediatricians in comparison to college students across the country.
Incidence rate (IR)
This is similar to the target audience. In market research, an incidence rate (IR) refers to the percentage of people who qualify to complete the research (survey, focus groups, IDIs).
For example, if a survey targets the general population and wants to reach females only, the IR would be 50%.
A lower incidence rate will result in higher market research costs because it will be more time and resource intensive to find this audience.
Length of interview (LOI)
This is another important factor that market research clients can easily overlook. It is critical that research uses participants’ time as efficiently as possible.
Changing from a short 20-question survey to a longer, 40-question survey increases survey dropout rates. As a result, this impacts the cost needed to reach more respondents.
The same can be said for common forms of qualitative research.
A market research study that asks participants to spend 3 hours at a focus group facility will require more recruitment hours than a one-hour online focus group.
Set up costs
This refers to a few different aspects of market research, including but not limited to, survey programming, secondary research needs, creation of call scripts, training calling staff, etc.
Additionally, set up market research costs can vary.
For instance, phone surveys involve extra time for CATI, mail surveys involve extra time to format for printing, and online surveys involve extra time for programming and testing.
Therefore, when comparing a basic phone survey to an online survey to a mail survey, the setup costs will be relatively similar.
This additional time for each usually equals one another.
However, for some projects which involve a lot of scheduling and project management such as nationwide mystery shops where shoppers need to be trained, the setup costs will be high.
Incentives and rewards widely vary based on the type of research.
It’s a safe bet that honorariums for surveys are far less expensive than those for focus groups and in-depth interviews.
For example, the honorariums for conducting a focus group with the general public may range from $50 to $100.
In comparison, the cost of conducting a focus group with business professionals may range from $200 to $250.
On the contrary, incentives can also lower the cost of market research.
By providing higher rewards, more people will be interested in signing up. Therefore, the time and resources needed to recruit participants are reduced – and so is the scope.
Type of reporting
When reviewing market research costs, you should understand what you'll be receiving from your market research company on the back end.
Options may include:
- Highlights sent via email
- Abbreviated reports
- Comprehensive reports
- Presentation style reports
Many market research companies charge for an expensive resort, but will simply export the data into an excel template or automate tables sent to you in a PDF with no analysis.
Others may charge a fortune to have a team of 10 people run banners and review every cross-tab imaginable.
Not to say market research companies should not be scrubbing and analyzing the data extensively, but oftentimes time and money are wasted on running cross-tabs on irrelevant demographics.
Will your organization ever use or want to know how females in ZIP Code 13202 rate your customer service on Wednesdays?
When your organization is reviewing market research costs for your next project, make sure the reporting charge reflects your needs.
The best market research companies like Drive Research are able to strike a balance between an affordable yet informative report.
We can show you the details and cross-tabs on the data that matters, but they can also tweeze out the key highlights, themes, and recommendations from all of the data you receive.
To learn more, read our blog post Topline vs. Comprehensive Market Research Report.
Market Research Costs by Methodology
Market research costs will heavily vary depending on the type of methodology. For instance, a focus group will most likely cost more than an online survey.
For this reason, while choosing a methodology is commonly based on your project goals and objectives, your budget will also play a factor.
Luckily, there are many alternatives to expensive market research methods to make them achievable for any budget.
Below, we break down market research costs by the two main categories: qualitative vs. quantitative methodologies.
Qualitative market research
Generally speaking, qualitative research tends to be more expensive than quantitative research.
For qualitative research, the biggest cost factors come from the number of groups or interviews that need to be conducted, the target audience, and the honorariums given to participants.
In general, in-depth interviews require less setup than focus groups since the researcher only meets with one person versus several people at a time.
Ways to lower the costs of IDIs is by making the conversations brief (30 minutes or less) and remote (via Zoom or the phone).
In addition to the 3 factors listed above, several add-ons can be included in focus groups like catering for clients and participants, live streaming, recording options, etc.
As mentioned earlier, online focus groups are a great cost-effective alternative to in-person group discussions.
The focus group facility at Drive Research
Quantitative market research
When comparing common forms of quantitative research like in-person, phone, mail, and online surveys, the most impactful cost is the time spent on data collection and fieldwork.
Therefore, if aiming to acquire 400 completes and debating between the 4 options, in-person is typically the most expensive.
Since phone surveys also involve live people administering telephone calls, they can also be quite expensive.
These involve an additional cost to print, prepare, stamp, and send the surveys to respondents. There is also a data entry charge as the surveys are returned.
These are by far the most cost-effective market research option.
There is no cost to administer other than clicking a mouse. The survey respondent's data enter their feedback on your behalf.
This is a large reason why email and online surveys have grown immensely over the past 10 to 15 years in the industry.
Unfortunately, there is no specific number when talking about market research costs.
It's highly dependent on a number of factors including vendors, setup, fieldwork, and reporting.
Typically the smaller the scope and fewer responses or participants needed, the lesser the cost.
From our experience, fieldwork is the largest variable in market research. Limiting the amount of person-to-person time to administer the fieldwork typically reduces costs.
However, the trade-off is in the quality of the data.
When contacting a market research company, like Drive Research, it can be helpful to share your budget.
This way, the market research firm can recommend the best approach based on your goals, audience, timeline, AND budget.
Doing so will assure you are not sacrificing data quality for budget constraints.
The cost of market research is relative to a number of factors. Therefore, for a more accurate quote, it is best to contact a market research firm like Drive Research with your project details.
Our team offers end-to-end project management services from design, fieldwork, reporting, moderating, recruiting, and more.
Interested in conducting a market research project with Drive Research? Contact us today.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
As a Project Manager, Emily is approaching a decade of experience in the market research industry and loves to challenge the status quo. She is a certified VoC professional with a passion for storytelling.
Learn more about Emily, here.