Decoding Market Research Costs: What’s Included in the Price?
Last update: 22 September 2023 at 03:23 pm
3.67/5There comes a time in almost every business’ life when things seem to be stagnating and the company isn’t sure how to pick things back up. With a fast, ever-evolving society, they can fall out of touch with their customers and fall behind the competition.
Market research helps businesses uncover hidden opportunities, fine-tune their marketing strategies, and make informed decisions that can save them time and money.
But how much does market research cost? Is it really worth the investment?
While market research costs vary depending on a multitude of factors, with the right market research method in-house, or going through an agency, you can unlock valuable insights that can bring your business back on track.
TL;DR
| Pros | Cons | Price | |
|---|---|---|---|
| Surveys | – Cost-effective – Wide reach – Fast – Basic | – Self-selected respondents – Lack of expertise and guidance from online platforms – Limited data analytics capabilities | As low as $290 a year for 100 answers a month |
| Interviews | – In-depth insights – Contextual understanding – Flexibility – Identify opportunities | – Limited customization options for interviews online – Time-consuming – Can become costly | As low as $37 per session of 15 minutes |
| Focus groups | – In-depth insights – Possibilities to conduct secondary market research methods | – Time-consuming – Costly | As low as $4,000 for 1 focus group session |
| Market Research Agency | – Access to more reliable tools – Experienced professionals – Potential to hand over project completely – Possibility to execute actions presented by the market research | – Costly | Starting prices at $300,000 |
What does market research cost depend on?
Determining market research costs can be a complex task, as there is no one-size-fits-all price that suits every company or project. In reality, the cost is influenced by several factors, including the desired outcomes, the individuals involved, and the research methods used.
By considering these 5 factors below, you can gain clarity on the type and scope of research needed, thereby enabling a better estimation of associated costs.
- Type of target audience: Define your target audience carefully, considering a significant sample size that aligns with your research objectives.
- Methodology: Determine whether a quantitative or qualitative analysis is needed by considering factors such as business objectives, decisions to be made, target audience, data specificity, urgency for results, and relevant existing information.
- Quantitative research, surveys conducted via email, telephone, or in person can provide statistical data. Each option has limitations and associated costs, such as the need for a suitable database or expenses related to pollsters.
- Qualitative research focuses on understanding audience motivations and typically involves focus group sessions or in-depth interviews. Budget considerations should account for professional fees, location, and transportation.
- Duration of the study: The time required for data collection, analysis, and result presentation varies based on the research type and sample size.
- Number of participants: The size of the sample affects the overall cost. Determine an appropriate sample size for evaluation, with 5–10 participants per demographic group for qualitative studies and a larger representation for quantitative research.
- Incentives: Offering incentives to study participants, such as gift cards or branded products, can improve response rates and sample representation.
Considering these factors when estimating the cost of market research is crucial to ensure the effective allocation of resources and obtain valuable insights.
Market research through an agency and cost
Doing market research can be a difficult task to undertake for any company. You may have identified some pain points in your business but are confused about the necessary information you need to find solutions.
Market research agencies are specialized in finding these solutions for clients. Rovamedia is a digital marketing agency that provides market research amongst many other marketing services.
A client looking to outsource their market research with them can expect a service that looks like this:
After an introductory call with the client, where we seek to understand the client’s aim, goal, and objectives toward the project, we will typically spend 2 to 6 months elaborating the market research project.
– Uchechukwu Ajuzieogu, Head of Strategy & Ops at Rovamedia
After having established KPIs together, clients will have a series of 5 calls with the agency during the time that they carry out the project, which they do with basic and advanced market research protocols and systems.
After validation and approval of the project by the Rovamedia team, the final project is sent over to the client and presented via a pitch call.
Cost of market research through an agency
Based on a series of factors, whether keeping things in-house or doing things via an agency, market research cost can greatly vary.
“The price a client can expect if deciding to do market research projects through an agency differs from aims, goals, objectives, scope of the research, methods, and more. At Rovamedia a client can expect to spend $300,000 – $3.3M depending on the above-mentioned factors.”
Uchechukwu Ajuzieogu
Types of market research and their costs
Surveys
- Cost – As low as $290 a year for 100 answers a month
- Pros – Low-cost option and relatively fast to create
- Cons – Non-verified participants, limited data analytics
This market research model is based on a questionnaire that seeks to understand what your target needs, wants, or is looking for and what problems it has in achieving it. This information helps you to make strategic decisions about product offerings, marketing efforts, and marketing channels for your business.
There are many different kinds of pricing methods for surveys that can range from price per participant, location, number of questions, etc.
SurveyMonkey is a popular platform that offers online surveys at prices that start from $384 a year with 5,000 answers a month. For an extra price, you can also buy targeted responses to get more qualitative and quantitative responses.
Another platform for online surveys, Typeform, offers a cheaper alternative at just $290 but with a limited number of just 100 answers per month but with an unlimited amount of questions per survey.
Although survey platforms such as the two mentioned above are great options for businesses with limited budgets, they have some serious ave limitations to consider.
They rely on self-selected respondents, potentially leading to biased data. Lack of expertise and guidance may make it challenging for inexperienced users to design effective surveys. These platforms also have limited data analytics capabilities, meaning that in-depth analysis may be difficult to execute.
Interviews
- Cost – As low as $37 per session of 15 minutes
- Pros – Low cost, in-depth insights into personal experiences
- Cons – User friendliness of certain online interviewing platforms
Interviews are a valuable method used in market research to gather detailed insights and opinions from individuals or key stakeholders.
Face-to-face interviews or on-the-phone interviews are particularly useful for understanding complex decision-making processes, identifying opportunities, exploring customer preferences, and obtaining feedback on products, services, or marketing strategies.
By having these direct conversations, companies can uncover valuable insights that help inform business decisions and improve the overall understanding of the target audience.
User Interviews is a company that provides a platform and services for conducting user research and interviews. They offer tools and features for businesses and researchers. Their prices vary from $45 a session to $3,900 a year for 150 sessions.
Another similar platform is Vision Live. They offer real-time online interviews and focus groups. You can find single interviews of 15 minutes starting at $37 a session.
Although both of these platforms offer companies a way of conducting market research, past clients have complained about certain elements such as difficulty in navigating the platform, limited customization options for surveys or interviews, and occasional delays in customer support response.
Focus groups
- Cost – $4,000 for 1 focus group session
- Pros – Interactive and dynamic conversations between participants that provide valuable insight, and form of research that can be used for secondary research methods
- Cons – Group dynamic influencing individual responses
Focus groups are a valuable component of market research that involves bringing together a small group of individuals, typically 6–12 participants, to engage in a discussion on a specific topic or product or answer questions.
On average, this type of activity takes between 2 and 3 hours but can also last up to multiple days depending on the kind of research.
This qualitative research method offers several advantages. Firstly, focus groups allow for interactive and dynamic conversations, that make room for an exchange of ideas, opinions, and experiences amongst participants.
They allow companies to gain a deeper look into participants’ thoughts, motivations, and underlying reasons for their attitudes and behaviors.
Focus groups are furthermore a popular type of research method because they allow for other types of secondary research and methods to be conducted at the same time such as:
- Competitor analysis
- Product testing
- Packaging testing
- Customer behavior study
For their comprehensive and valuable insights, focus groups tend to be one of the more expensive types of research methods.
According to Focus Group Hub, prices of focus groups typically range from $4,000 to $5,000 for a single focus group on the lower end but can climb to $12,000 to $15,000 depending on factors such as the number of people, length of the study, etc.
For obtaining a comprehensive range of data, it is advisable to conduct a minimum of four focus groups, considering a group size of 8–12 participants, meaning that prices could range from $16,000 to $50,000.
Conducting focus groups can be incredibly time-consuming, however, because it requires coordination between all participants. Given that the costs are more critical for this kind of market research, you will want to ensure that all the selected individuals will provide you with the information you need.
Focus groups through an agency
Our Sortlist service provider, Rovamedia, uses focus research as one of their market research methods.
We are heavy on focus groups. Especially in markets a client will be launching in. Focus groups and sessions vary, according to research and project scope; costs vary from $10k – $50k per session and sample size. Other factors that affect the price include: location, tools, people, and experience. – Rovamedia
– Uchechukwu Ajuzieogu
Market research project in-house vs. with an agency
While the initial cost of conducting market research in-house using a subscription fee of 360 euros for SurveyMonkey with 50,000 submissions may appear more affordable compared to a $300,000 project with Rovamedia, the long-term value of in-house market research extends beyond financial considerations.
In developing your market research budget, it is also essential to consider the value you can obtain for the price you pay.
Clients that have their market research conducted by an agency such as Rovamedia get the professional expertise of ex-McKinsey, Deloitte, KPMG and advanced consulting experts in the field. Another benefit, is there is no shared data, this means that the research is not leaked or shared to any external 3rd party source. A client can be assured on industry quadrants and metrics integrated with KPI when they do a market research with Rovamedia too.
Uchechukwu Ajuzieogu
Platforms like SurveyMonkey, Typeform, and User Interviews often face criticism for their limited participant pools, which rely on self-selected respondents, leading to biased and unrepresentative data.
Users find the lack of expertise and guidance concerning, as these platforms fail to assist in designing well-executed research studies, risking wasted time and resources. Moreover, the absence of robust data analytics capabilities hampers extracting meaningful insights and identifying crucial patterns and trends.
In contrast, working with a market research agency offers clear advantages. Reputable agencies bring extensive experience and expertise, providing access to diverse participant pools for accurate representation. They possess the knowledge to design tailored studies aligned with specific objectives, ensuring deeper insights and meaningful recommendations that drive business growth.
These agencies offer dedicated professionals who guide businesses through every step of the research process, from study design to data interpretation, guaranteeing informed decision-making based on high-quality results and comprehensive research.
Beyond the market research, if you are working with a full-service agency or multidisciplinary marketing agency such as Rovamedia, you can collaborate with them on whatever comes next.
After presenting the client with the final project, execution of the market research is proposed if in-house or out-of-house
– Uchechukwu Ajuzieogu
Benefits of market research
So far we have made it clear what costs you can expect for a market research project. However, it is important to understand which businesses can benefit from such studies and whether entrepreneurs can reap the advantages of custom research as well.
The answer is yes – every business, regardless of size, can reap the numerous benefits of traditional market research. In general, market research:
- Provides objective information to support decision-making for new product development, business branding, marketing campaigns, and potential expansion into new markets.
- Enables a detailed understanding of customers and prospects, allowing businesses to optimize their marketing and sales efforts. The more knowledge gained about stakeholders, the greater the likelihood of success.
- Equips businesses with sufficient information to justify actions and strategies aimed at improving every stage of the sales process for their products and services, whether in front of investors or board members.
- Saves time and money by preventing investments in product development or projects that do not align with customer interests or needs.
Conclusion
In conclusion, market research costs depend on factors like the target audience, methodology, duration, number of participants, and incentives.
While platforms like SurveyMonkey, Typeform, and User Interviews have limitations in participant pools, expertise, and data analytics, working with a market research agency offers advantages such as diverse participants, tailored studies, expert analysis, and dedicated support.
Market research provides valuable insights for decision-making, optimizing marketing efforts, and saving resources. Every business can benefit from market research to drive growth and success.
