The Real Cost of Online Market Research

By far, the most widely read article on FedPulse is Let’s Talk Price: How Much Does Research Cost? This makes sense because it’s important to know what the investment will be when you decide to do a market research project. In the last few years, we’ve also seen an increase in the number of online surveys we do, and we thought it would be useful to dedicate an article to the cost of online market research. In this two-part series, we discuss what goes into an online research project (and consequently why it isn’t free) and delve deeper into the importance of using panels.

An online quantitative survey project has both variable and fixed costs. Variable costs of online market research include:

  • The audience. The more specialized or high-level the audience, the more it will cost to reach its members. General consumer surveys are less expensive to field relative to more targeted audiences such as C-level executives, international respondents or specific industries such as healthcare or government. We often use panels — pre-screened and selected communities of people who have applied to take surveys continually in return for some form of compensation — to reach these high-level audiences. (We go into more depth about using panels in Part 2).
  • The number of surveys. The goal of any quantitative survey project is to obtain a sample of respondents that represents the population with some degree of precision and confidence level. Generally the larger the sample, the lower the margin of error. The appropriate sample size depends on the client’s needs.
  • Survey length. With a longer survey, the researcher may encounter something called “respondent fatigue” when possible respondents don’t complete the survey. To prevent that, a bigger incentive or stipend is provided. A longer field window may be needed to get the number of completes we’re seeking.
  • Sometimes quotas are set to ensure that a specific segment is sufficiently represented in a sample. For example, in federal research, quotas are often set to capture Defense agency respondents. This allows us to analyze the data and determine if there are significant differences between segments. The more quotas set, the greater the cost.

Variable costs depend on your goals and the type of online survey you are doing. There are also fixed costs associated with every online survey:

  • Online survey software licensing. Generally reputable research firms license sophisticated software to aid with online survey fielding. Though free software is available, licensed software allows greater flexibility and sophistication in formatting, branching, piping, display of images and video etc.
  • Survey design. Regardless of the type of market research you are doing, you need the survey questionnaire. A reputable research firm makes sure the survey is worded properly (not asking leading questions) and scales correctly.
  • Data tabulation and report preparation. Research firms license or own statistical software packages that help with data tabulation and analysis — a key part of the research project. From simple frequencies and descriptives to advanced analytics, trained personnel use this software to analyze results and prepare the client report.
  • Project management.Conducting any market research involves coordinating many components, which takes the skill of an experienced project manager.

While online surveys are convenient and yield great results — often faster than other methods — there is much that goes into conducting them in a manner that meets your goals.

Next week in Part 2 of this miniseries, we will discuss why it often makes sense to use panels in online research.

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