By Shana Latham, Analytics Manager, Polaris Marketing Research

The increasing awareness of the importance of marketing research and the low-cost online data collection options available have given way to many companies conducting do-it-yourself marketing research. Given the nature of the research, DIY is suitable for some projects and other times hiring a professional marketing research firm would be best. Before a company decides on whether to conduct research in-house or through a marketing research firm, they should consider the pros and cons.

Pros:

Cost-effective

There is no doubt that doing research in-house is less expensive than hiring a marketing research firm, especially when conducting online research. There are online software tools, such as SurveyMonkey, that provide online survey hosting at minimal cost. These tools allow DIY researchers to program simple surveys in a timely manner.

Hands-on involvement

When companies decide to conduct marketing research, they have set objectives they want met and questions they want answered. Because of this, many companies would like to have involvement throughout the entire process. Doing research in-house lets the company have hands-on involvement and daily input during every aspect of the process.

Knowledge of Industry

With in-house research, you have a staff that is knowledgeable of your industry conducting the research. Most marketing research firms have diverse industry experience and will not have the extensive industry knowledge that an in-house research team would have.

Once the data are collected, the relative importance of each attribute is calculated using advanced analytics software. The software produces “utility functions,” or scores, for each of the attributes. In addition to utility scores, raw counts can be generated that will display counts for the total number of times an attribute was selected as best and worst.

Example Output

The chart below shows typical output from a MaxDiff analysis for our fictional homebuilder project. Attribute importance is the major output measure, and it corresponds roughly to the percent of the average respondents’ preference that is captured by each attribute.

Cons:

Questionnaire Development

One of the most important steps in marketing research is the design of the questionnaire. Inexperienced researchers can often bias the research by the order and wording of the questions in the survey. Questions with non-exhaustive response lists or inappropriate sensitivity of scale questions can lead to poor quality data. Marketing research firms are experts will ensure good quality data during the design phase.

“Everything but the Kitchen Sink”

When conducting a survey, it’s easy to think that this is a great opportunity to ask as many questions as possible to gather data, regardless if it is relevant to the objectives of the research. This will lead to respondent fatigue and information overload. Professional market researchers can help pinpoint what information is most important to the research objectives and the best way to gather the information.

Questionnaire Development

The Max Diff question format can also be very tedious for respondents to complete, resulting in early break-offs and incompletes. Thus, it is important to design the questionnaire in a way that helps respondents understand what to expect. Additionally, the fewer the attributes, the easier it is for respondents to complete the series of tasks.

Insufficient Tools and Resources

Many online survey tools are intuitive and easy to program and implement, but the tools only provide basic frequency counts once the data is collected. Marketing research firms have tools and analytical resources to analyze the data that provides more depth and insight into the results.

Timeliness of Results

Conducting marketing research requires resources and time. Many companies don’t have the resources available to implement all aspects of the project in a timely manner. Hiring a marketing research firm can free in-house managers to focus more on the findings and actionable decisions.

Lack of Confidence in Confidentiality/Anonymity

One of the most beneficial reasons for hiring a professional marketing research firm is the promise of confidentiality and anonymity to the respondents. This avoids the conflicts of interest that can arise and adversely affect your results when you conduct your own research. Marketing research firms are often in compliance with certain codes and memberships to organizations such as AMA, the Marketing Research Association, and the Council of American Survey Research Organizations. Compliance with these codes is used to signal quality service to potential and current customers.

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Shana Latham is the senior data analyst in the analytics department of Polaris Marketing Research Inc., where she is responsible for handling data manipulation tasks involved in survey research. She has a bachelor's degree in business from Georgia State University.