A Market Research Agency Will Be Expensive
There is a cost to buying in any service for your organisation. The cost is usually a direct monetary cost paid to the service provider, but can also include time, lost opportunity and staff costs.
Sometimes, when a professional service is infrequently purchased, a sub-conscious guess is made as to how much this service will cost – and often without any information to back up the guess!.
It is easy to assume that a huge volume of work needs doing and therefore a huge bill will follow. And with some agencies, that may be the case.
However, the approach we take to providing value for our clients starts from a different point.
Before we start to think about cost, our first imperative is to understand exactly what the client wants. This gives us the information we need to put together a very precise work plan that details exactly the work that needs doing.
Only after checking with the client that this is indeed what they want can we then start to think about the resources needed to complete the project within the given timescales.
Part of the our checking process is to understand what the client is intending to do with the results of the research once it is finished. We can then ensure that the research we produce will help our client meet their overall goal (rather than just the project goal).
All this translates into a payment that is for the work required and nothing else.
It sounds so obvious that you’d think everyone did it. However, this isn’t so.
Our experience shows that the difference in fee structures between competing agencies can be anywhere from 25% to 75%. And, as is so often the case, the lowest quote is not always the best deal.
When pricing a project competitively, it can be tempting to cut prices in order to secure the business. This is dangerous, not only for the agency but also for the client. An agency that consistently undervalues projects will surely not remain in business for long. And a client who always goes for the lowest priced quote stands a real danger of not receiving what they thought they were buying.
For example:
A couple of years ago, one of our clients put a project out for tender. We had been the incumbent supplier for several years, so we knew what needed doing and we quoted accordingly.
Three agencies were invited to quote, and three quotes were received by the client. The first agency quoted over 20% higher that us, and were immediately ruled out. The second agency quoted significantly lower than our bid and, based on a ‘lowest quote wins’ decision process, was awarded the work.
As the project got going, it transpired that the chosen supplier was not going to use the existing survey structure, which had been devised in conjunction with the client. This meant that future year on year comparison analysis would not be possible.
Importantly, this also meant that the chosen agency would not be performing the analysis against previous years – a pre-requisite in the specification of work.
The project did get completed, but, as the client saw it, half the work was not done. That’s why the quote was lower – it was less work!
The client put out a tender the following year and re-selected us to carry on the work for the following 3 years.
The moral of this story if you are buying research competitively, is to ensure that you understand exactly what you are being quoted for, then make your choice on the value being offered, not the lowest quote.
The difference is not only cost, but can also include your time, the time of your staff and the overall delivery of what you thought you were buying.
And that responsibility lies with the market research agency too. It needs to demonstrate knowledge, experience and industry success to demonstrate to the client that the budget spent will deliver their research outcomes.
Conclusions
It is not correct or accurate to assume that a market research agency will be expensive.
In fact, using the right combination of client needs analysis and service delivery, projects can be cost effective and value for money.
Here are some other articles that may be of interest to you:
- The 1 to 8 Scale: Why You Shouldn't Use A Three Point Scale (Happy, Neutral, Unhappy)
- A Market Research Agency Will Be Expensive
- No Budget, No Surveys Is The Right Way Forward
- Why Use An External Market Research Agency
- Recruiting For Focus Groups
- Managing Focus Groups
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