Here at Research & Marketing Strategies, Inc. (RMS), we sometimes encounter clients or potential clients who want to try to conduct a market research project in-house rather than hiring us for the same work. Like the person who tries to save money on a plumber by fixing their kitchen sink themselves, sometimes it works out and sometimes one is left with a big mess and winds up calling the plumber anyway. (The author of this post may have some personal experience regarding that example!) In some cases, when money is extremely tight, the scope is limited, and when the stakes are not particularly high, do-it-yourself market research can be a viable option. But in many cases, the in-house approach represents false savings and carries with it a lot of unforeseen pitfalls.
At this point, you may be asking yourself, “Isn’t it self-serving for a guy who works for a market research firm to write a blog post pointing out the pitfalls of do-it-yourself research?” Well, sure. But my experience in this industry over the years means I have seen a lot of organizations that have come to us after having tried to do it themselves in the past with unsatisfactory results, and even some that have come to us mid-project after realizing they had taken on more than they could handle. So, while it is undeniably in my interests and in the interests of RMS if people think twice about tackling a research project in-house, I also sincerely believe that it is in the interests of the clients to provide them with some questions to ask themselves and carefully consider before attempting to conduct market research in-house. They are:
1. Will we save money by doing it ourselves? The answer to this, in most cases, is a qualified yes. There’s no denying that the initial out of pocket costs will be lower than they would be if an outside firm was hired to do the same work. However, there are other less obvious costs and concerns to consider that can offset, negate, or even eclipse those initial savings. The next few questions address those.
2. What are the total costs of managing the project internally? Time and resources will have to be devoted to it at the expense of the organization’s day-to-day operations. Employees will have to be pulled away from their normal duties resulting in lost productivity. The costs involved with this are sometimes difficult to calculate or anticipate ahead of time, but they are very real. This is probably the main reason clients who have tried to do in-house research in the past come to RMS with projects. We are often told that the past in-house efforts proved to be more burdensome to manage internally than the client had expected.
3. Does the organization have the internal resources and expertise available to do the job properly? If the organization has a dedicated research department, the answer is probably yes, although staffing levels may be a concern. In my experience, organizations with market research personnel on staff usually have a good sense of their internal capabilities and don’t shy away from outsourcing projects or parts of projects on an as-needed basis. But if the organization does not normally do research, there is often an initial underestimation of the need for/importance of expertise in areas such as survey design, data analysis, focus group moderation, familiarity with and access to syndicated research resources, group facilitation, or reporting the findings. Do-it-yourself survey applications such as Survey Monkey or Zoomerang can make people feel like they have all the tools they need, but the truth is these applications are quite limited, especially in what they offer in terms of assistance in composing questions and analysis tools. And unlike an outside firm, these programs cannot offer any informed insights on what the findings actually mean. Weakness in any step of the research process can lead to unreliable and/or incomplete data, frustrated participants, and the expenditure of a great deal more time and effort than was initially bargained for.
4. Can we be objective enough (or perceived to be objective enough) to do the research internally? There are many instances where perhaps the largest values provided by an outside research firm are its independence and the freshness of perspective it can bring to questions under consideration. Some examples of when an organization would benefit from engaging a third party to do their research would include:
- When measuring employee satisfaction
- When there are political factions within the organizations strongly advocating for or against a course of action that is dependent on research findings
- When the research will be used in sales or other efforts to persuade customers or stakeholders
- When the research will be used in an effort to obtain financing
In all of those cases, the objectivity of an independent market research agency will add credibility to the findings.
5. What are the costs of making a wrong decision that is informed by faulty research? This is, by far, the most vital question on the list! Trying to do market research on the cheap is often an example of “penny wise, pound foolish.” Research that prevents an organization from making the wrong choice, or provides insights on the best way to implement a viable concept will pay for itself many times over. Spending a little more money to do it right will give the decision makers in the organization the best, most complete information to work with. And isn’t that the whole reason for doing the research in the first place?
Now, where did I put the number for that plumber…