As a statistic, the outlook for businesses to succeed beyond 10 years can be alarming. As time goes on, the failure rate for startups gradually increases and on average looks like this: 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. In 2019, the long-term failure rate of startups remained around 90%.
When you begin to dig into these figures and talk to small business owners, it becomes apparent that one of the main contributors is being blindsided by issues that could have been prevented with Market Research. Of the main reasons Investopedia cites for why businesses fail, two of them are directly tied to market research. They include targeting the wrong market and not doing enough research.
The Advantages of Hiring Market Research Experts
With startup failure rates as high as they are, and two of the main reasons businesses fail being tied to a lack of, or inadequate, market research, the value of doing it properly becomes apparent. Yet, unfortunately, many individuals are at a loss for how to get started or what methods to deploy. This is why the savviest of entrepreneurs tend to hire experts to perform this critical task.
One of the first obstacles is knowing how to set up your primary research methods to reach the right audience and gather the right information. Primary market research means going right to the source: your potential customers. Common primary research methods include interviews, surveys, focus groups, and observations.
Experts are also adept at secondary research, which includes accessing and analyzing existing market research information and data. This is often difficult for individuals as they don’t know where to go, are unable to access information due to hefty subscription fees, or don’t know how to properly analyze the information once obtained.
Not only are market research experts able to identify and gather the most relevant information to get to the heart of your business, they have access to the most trusted secondary data sources (like IBISWorld and Statista), and most importantly know how to analyze the information to gather meaningful insights. They also have the expertise, capacity, and resources to do it faster than doing it yourself.
Experts, like Joorney Business Plans, know how to adequately classify your target market(s) and how to identify the most important questions that need to be addressed for each unique business and what market research methodologies are best suited to answer them.
How Much Does It Cost to Hire Someone to Conduct Market Research?
Once the value of paying someone to do your market research becomes apparent, the next logical consideration is whether or not you can afford it or how much you should budget. How much market research will cost can vary widely based on a number of factors including:
Your business goals (aka: what questions you need answered)
Type of business (Industry, B2C vs. B2B, local/niche vs. global)
How much base information you already have
What level of insight you need
How quickly you need the information
Generally speaking, pricing will be based on what type of report you expect and the depth of information required. According to one of the most comprehensive sources of market research information on the web, marketresearch.com, average costs for most common types of reports are as follows:
Top level reports– $100 – $1,000 – Typically includes an overview of the broad industry, top players, and basic insights.
Full-market reports– $1,500 – $8,000 – This is a more in-depth report that gives a full review of the industry, market, and subcategories, including their current state and future projections. It will also include current trends and technologies, and predictions about what way the market will move in the short-term and long-term.
Product detail market reports– $15,000-$35,000 – This type of report is a deep dive into testing/researching a specific product/service. The cost is high as it often uses several specifically-tailored, custom methods of testing your target audience(s) to determine things like product market fit, product satisfaction, and overall perception of your product in the marketplace.
Hiring the Right Market Research Expert: Firms vs. Consultants vs. Universities
You have three primary options for hiring outside experts – firms, consultants, and universities.
Firms tend to fall within the average price ranges mentioned above more closely than the other types of experts. As an example, Joorney’s Premium Research starts at $3,000. A common output of our service is most closely aligned with what is described as a full-market report. However, all market research services are fully tailored to the unique needs of our clients. In general, firms usually provide a great value as you are getting the combined expertise of multiple professionals and research experts. They also tend to be more responsive as they have set business hours and administrative staff and they are able to offer quick turnaround times due to capacity.
Individual market research consultants are another option. Due to the broad nature of individual consultants, their prices tend to vary more widely. Prices are typically based on the individuals’ level of experience and several other factors. While there are many great consultants out there, it can be overwhelming to select one. The ease of creating a good website and trendy marketing solutions can also make it very difficult to identify one that will actually deliver the results you expect.
The option that people tend to think about least is universities. This can be a good solution particularly if your budget is constrained as they often charge a fraction of firms or consultants charge. Many business schools offer Market Research services as a way to draw in real-life clients to provide their students with practical experience. While this can be a good solution, be prepared for a longer timeline as programs may only accept a certain number of clients and timetables often align with curriculum. The quality of the reports also tends to vary as it is prepared by students.
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