Pros and Cons of Conducting Your Own Market Research
The main reason that startups and small businesses choose to do their own research is simply down to cost, as commissioning agencies can be very expensive. However, market research agencies have a great deal of experience that you will miss out on if you decide to conduct your own research.
- Cost – Conducting your own market research can be done for free. Even if you choose to use some paid for tools or services, it will be a fraction of the cost of employing an agency.
- Subject matter knowledge – You know the key questions and you can improvise when interesting topics come up in conversation during the interviews. While specialist researchers will undoubtedly try to emulate this, they will never have the depth of knowledge that you have on the particular topic. Their insight is often derived from conversations with people in the know, as opposed to firsthand experience.
- Reduced complexity – Conducting the interviews yourself removes a layer of complexity, to get you closer to the information. Using a research firm can be a bit like Chinese whispers, relying on the researcher’s interpretation of what people have said. They are often transcribing what has been said, and can easily miss something if they don’t appreciate the significance.
- Greater flexibility – You can be more innovative and try different approaches to market research that an agency might not consider. For instance, Innocent Smoothies used a novel tactic to test the market for their product. At a music festival where they were selling their products they had two bins, one confirmed that people liked the product and one that said they didn’t. They asked people to put the bottle in the appropriate bin once they had finished the drink to enable them to understand if more people liked their product than not.
- Experience – Professional researchers will have a wealth of experience writing questionnaires, building surveys and conducting interviews in order to get the best results.
- Objectivity – You are naturally biased, and may favor a particular outcome which could skew the data collection and analysis.
- Sensitivity – Your customers might not be willing to open up to you. Market research agencies act as an independent intermediary, to help extract the truth. They will also have signed up to standards about data confidentiality and security, which will help to put participants fears at ease.
Ultimately you should weigh up these pros and cons before you make the decision to invest your money in professional market research services. While you make have allocated funds towards a market research project, the more cost effective approach might actually be to conduct this research yourself, at least in the initial stages.