The cost of market research depends on the size and scope of the project’s needs.
For example, a simple online survey that collects 100 completes and includes an abbreviated report from a market research consultant will be less expensive than a phone survey that collects 1,000 completes with a comprehensive report.
While there is no "average cost" for market research, it can be helpful to understand what impacts price.
The main factors that affect the price of a market research project include:
- Target audience or incidence rate
- Length of survey/interview
- Number of completes
- Type of reporting
In this blog post, we'll discuss these factors in more detail as well as compare the costs of different types of market research.
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What impacts the cost of market research?
Wondering what impacts the cost of market research? 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.
- The number of completes/groups/interviews: This refers to the actual number of fully completed surveys, groups, or in-depth interviews. Fewer respondents/groups/interviews will be less expensive, but less data also lowers the reliability of the results. Remember, more data is better.
- Target audience: 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.
- Incidence rate (IR): This is similar to the target audience. Incidence rate (IR) refers to the percentage of people who qualify to complete the research, which could be a survey, focus group, or IDI. For example, if a survey targets the general population and wants to reach females only, the IR would be 50%. However, if there is a way for the survey only to be shown to females, the IR would be 100%.
- Length of interview (LOI): This is another important factor that market research purchasers 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 drop off which impacts the cost needed to reach more participants.
- 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.
- Honorariums: 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 for conducting a focus group with business professionals may range from $200 to $250.
- Type of reporting: Several types of reporting options are available for market research projects. Options may include highlights sent via email, abbreviated reports, comprehensive reports, and presentation style reports. When discussing the needs of your project, think about how you plan to use the results! This will help inform your reporting needs. To learn more, read our blog post Topline vs. Comprehensive Market Research Report.
What is the most expensive methodology?
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.
- Focus groups: 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. Here’s our guide for managing a focus group.
- IDIs: In general, IDIs require less setup than focus groups since the researcher only meets with one person versus several people at a time.
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.
- Phone surveys: Since phone surveys also involve live people administering telephone calls, they can also be quite expensive.
- Mail surveys: 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.
- Online surveys: 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.
Recommended Reading: How Much Does an Online Survey Cost?
How does reporting impact cost?
When reviewing market research costs, you should understand what you'll be receiving from your market research company on the back-end.
Many market research companies charge for an expensive report, 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?
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.
When your organization is reviewing costs for the next market research project, make sure the reporting charge reflects your needs.
Do set up fees change from project to project?
The short answer is, it depends.
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.
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.
But comparing a basic phone survey to an online survey to a mail survey, the setup costs will be relatively similar.
Unfortunately, there is no "average cost" for market research as a whole. It's highly dependent on a number of factors including set up, fieldwork, and reporting.
Typically the smaller the scope and fewer completes, 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.
Some of the best market research comes from person-to-person interactions in focus groups, in-person interviews, and phone surveys. Choose, but choose wisely.
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 Senior Research Analyst, 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.