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Well-designed market research yields many valuable insights for organizations, helping leaders to better understand customer preferences, consumer behavior and market trends. But because there are so many different ways to conduct market research, the question of how much to invest in each phase is an important consideration in planning. 

In this article, we’ll aim to answer questions about how much different types of market research might cost, discuss different market research strategies, and explore how you can use technology to drive higher quality insights while saving money.

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Market Research

Learn how you can start building a significant competitive advantage with market research. 

Understanding the Market Research Process 

Before diving into an exploration of how much market research costs, it’s important to break down what we mean when we talk about market research. Typically, market research projects follow a loose structure, with deviations to this based on the individual needs of the business or the researchers. In general, we think of the market research process as having four distinct phases:

Exploratory Market Research

The majority of market research projects begin with exploratory research, which aims to test initial hypotheses and uncover insights that shape the remainder of the market research process. 

Exploratory research is usually conducted on a relatively small scale, and typically involves the use of primary market research methods like a focus groups and interviews with a small group of subjects. Many times, it’s possible for organizations to conduct their own exploratory market research, without the assistance of a third party research organization. This means that the process of exploratory research can be conducted at a minimal cost.

Primary Market Research

When we talk about market research, most people’s minds immediately jump to primary market research. This phase forms an important part of the market research process, using different research techniques including surveys, interviews, and observations.

In primary research, there are  several factors which drive the cost of research: the complexity of the business issue(s) to be answered, the choice of research technique, the number of respondents and the related qualification criteria, and the analytic needs. 

More basic techniques, such as simple text based surveys, are relatively inexpensive to implement. Organizations can develop a survey template and share this with potential respondents through the internet, with software handling the bulk of the work. More advanced types of survey, such as conjoint analysis, may be conducted in partnership with a market research organization, which pushes costs higher. Even more advanced techniques, such as observation based shopalongs, can cost significantly more, requiring highly-qualified market researchers spending time one-on-one with research participants.

Another general rule is that the higher the number of research participants, the greater the cost to conduct the research. In the field of market research, it’s best practice to conduct research with a representative group of respondents. To be effective, the sample should be large enough to capture the diversity of the population the research seeks to explore. Given that research participants are typically incentivized in some way for their involvement, it’s easy to see why more research participants equals more cost.

Secondary Market Research

Secondary market research consults existing bodies of data to add context to the findings of primary and exploratory research. There is a huge variety of sources that researchers can use to conduct secondary research: some are free, and some are not. In general, it’s best to rely primarily on high-quality datasets from reputable sources, which often require payment to access. 

Another consideration is the software required to manage such a broad variety of secondary data sources. Researchers will typically employ a Market and Competitive Intelligence (M/CI) platform that enables them to manage all secondary data in one platform. Cipher’s platform, Knowledge360Ⓡ, performs this role, acting as an intelligence hub for the entire organization. Knowledge360 comes with built-in integrations to high-quality datasets from sources, including a variety of U.S. Government agencies as well as vendors like Morningstar and IBISWorld

Related: Learn more about the cost of M/CI platforms like Knowledge360 with our 2021 Buyer’s Guide for Market and Competitive Intelligence Software Tools

Reporting and Sharing Insights Internally

Market research is only effective when the insights generated from the process are shared widely across the organization, particularly with decision makers. Teams should focus on using tools that enable them to share research insights in easy-to-digest, visual formats. In this instance, data visualization like Tableau and PowerBI are powerful additions to a researcher’s arsenal, and are available at relatively low cost.

Another approach is to create market research dashboards that update in real-time with the latest secondary market research and can be accessed by stakeholders across the organization. M/CI platforms like Knowledge360 support this capability and make it easier for decision makers to access market research insights without delay and exactly as they need them. 

A New Approach to Market Research: Prediction Markets

The traditional approach to market research discussed above has stood the test of time and remains an invaluable way for organizations to uncover highly valuable insights about their customers, competitors, and broader markets. However, there are a couple of flaws to this approach. 

Traditional market research takes time. As we’ve seen, the process is relatively lengthy, and can take several weeks or even months to complete. In fast-moving industries, that’s often too long. Another notable flaw is that market research is  predicated  on historical data and personal opinion. While this is useful in indicating what cohorts of customers think, and how they have behaved, it’s fairly limited when it comes to predicting future behavior. 

Prediction market research is a relatively new form of market research that aims to address these issues and more, helping organizations to better quantify trends, assess market potential, and predict consumer behavior in years to come. 

At Cipher, our prediction market research platform, HUUNUⓇ, enables market researchers to achieve highly accurate results in less time, at less cost. Entire research projects can be completed in a matter of days, helping organizations uncover insights three to five times faster than if they relied solely on traditional methods. HUUNU also helps researchers lower costs, offering significantly reduced concept and ideation screening costs when compared to traditional research methods. 

To learn more about HUUNU, schedule a demo with the team today

Final Thoughts: The Cost of Market Research

The cost of market research is influenced by many variables so decisions need to be made wisely. However, research that is well planned and efficiently executed will pay off in multiples, making the investment well worth the effort. 

To learn more about market research, read our Ultimate Guide to Market Research.

Interested in partnering in Cipher on your next market research project? Schedule a call today