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People often ask---or are asked by others in their organization--about the benefits of using an outside research firm vs. gathering information themselves through sales meetings, tradeshows, email surveys of customers, etc. There are a number of reasons to use an outside research firm, and there are also situations where it makes more sense to gather information using internal resources. To evaluate whether or not an outside research firm like Isurus is right for your company, please read on...
Benefits of using an outside research firm: More objective, open-minded As an independent, unbiased third-party, an outside research firm brings a level of objectivity to the research that the client typically cannot. No matter how objective or open-minded they try to be, employees of an organization always bring some degree of bias to a conversation with a customer or prospect. This is understandable--employees often live and breathe the product, and it is difficult to step outside that perspective to listen to customers and prospects with an open mind. An outside research firm brings an independent perspective--unbiased by internal opinions, past experiences, or passion for the concept. As a result, we don't filter what people say and are more open to hearing opinions that go against internal beliefs and assumptions. Back to Top
Professional research expertise and skills Primary market research firms have specialized skills developed through academic training and years of practical experience. For market research to be useful, it has to help managers make better decisions--good researchers understand the relationship between the business and research objectives of a project. Research skills fall into four broad categories: Survey development: Ensuring the research "asks the right questions the right way" is critical to the success of any research effort. Professional research firms are skilled at writing unbiased and clear questions that address the research and business objectives.
Representative sampling: Professionally executed research focuses on gathering a representative sample of the market of interest. Representative sampling is critical to ensure the results are projectable to the entire target market and not biased toward particular segments of the market.
Analytical skills: Professional research firms use two types of analytical skills to understand research data--statistical and contextual. We use statistical analysis to understand patterns in data and derive a deeper understanding of the market than is revealed by the "top line" numbers. Contextual analysis is more qualitative and involves drawing conclusions based on a combination of what people say at various points in the research interview, experience conducting similar types of research, and general business and marketing knowledge.
Translating data into actionable recommendations: Good research should provide clear, concise results that yield actionable recommendations. Good research firms are skilled at not only identifying the useful results, but communicating results and recommendations in a language and format that is useful to the research client. Back to Top
Good research takes time When research is done well, using the skills and processes described above, a typical engagement can take hundreds of hours of time from Isurus staff. Most organizations simply cannot dedicate this amount of internal staff time to do a thorough job--especially with the tight deadlines associated with most projects. Most client staff people have other work to do and don't have the expertise that a market research firm has. Back to Top
An outside firm gets the whole story People are more forthcoming with an independent third-party than they are with a company representative--even when they know who is ultimately sponsoring the research. This happens for a couple of reasons:
- When most prospects talk to a vendor representative, their defenses are up because they know the vendor's ultimate objective is to sell them something. They are less willing to share their true concerns or thoughts in some areas for fear this will diminish their bargaining position at a later stage.
- Customers may be more likely than non-customers to share their thoughts with a current vendor; however, they typically represent a biased perspective--they've already bought from the company.
- People are often uncomfortable delivering bad news "to your face." If a prospect or customer thinks an idea for an enhanced product is bad, they often soften the truth rather than tell the company directly that the idea is poor. As a result, the company may get misleading positive feedback that is costly in the long-run.
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Anonymity Anonymity can offer advantages to the client and to research participants: A third-party firm can conduct the research without revealing the sponsoring company. In some situations, a company may not want the market to know they are considering a specific concept or product. It is very difficult for company representatives to conduct the research themselves and remain anonymous. In some instances, keeping the sponsor anonymous will reduce the likelihood of bias in the results, and also potentially increase internal buy-in for the research findings. The option to remain anonymous is also useful for research participants--some people feel more comfortable providing their input when their name or company isn't linked to their responses. Using a third-party research firm allows participants to remain anonymous, and can provide a more representative sample of the market as a result. Back to Top
Difficult to research and sell simultaneously An alternative to using an outside research firm is often to append some research questions onto another client meeting. For example, one approach is to have the sales force ask questions of customers and prospects during their meetings. Salespeople have a limited amount of time with a prospect to accomplish their primary objective--selling. Including a research related discussion in the sales meeting dilutes their main objective, and the resulting research information generally falls short as well. Back to Top
When not to use an outside research firm While there are good reasons to invest in the services of an outside research firm, there are also circumstances when a company may be better off doing the research itself.
Sometimes companies want more information on a topic, but it isn't a critical need. In this situation, gathering some anecdotal information from the market can provide enough information to be useful without incurring the expense of an outside consultant.
If a company's budget is so constrained that hiring an outside firm to do the research means there is not enough budget remaining to implement the results, we would recommend either scaling back the research or using internal resources to gather as much information as possible.
Working with an outside research firm requires commitment and buy-in from the sponsoring client. The client has to invest time--sharing information and developing objectives with the research firm. In addition, the research will only be useful if there is internal buy-in around the credibility of the research project. If the research does not have credibility with key internal users, they will probably not use the results. Back to Top
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