To include or not include your Research Budget in Requests for Proposals, Quotes or Tenders
With procurement and finance departments increasingly involved in the purchase of market research services, many requests for quotes or tenders are now issued without any indication of the available budget.
The rationale generally used when not providing a budget is the belief that it will encourage market research suppliers to provide you with their best or cheapest quote. When you go to buy a car, the first thing the salesperson tends to ask is what you are looking for and how much are you looking to spend. Your answers to these questions help him or her to work out which cars to show you. Market research is similar.
Firstly, market research suppliers are in the business of staying in business. If we overcharge, word soon gets around. We want you to keep coming back to us for future work and overcharging isn’t a good strategy for client retention. So, we aim to design your research so it meets your objectives as cost effectively as possible.
Market research quotes often involve hours of detailed work to determine what it will cost to do your survey or your focus group or online community. We need to work out how many hours it will take to design your questionnaire or discussion guide; how many programmer hours it will take to program your survey or recruitment questionnaire; how many interviewer or recruiter hours it will take to conduct your survey or recruit your participants; how many hours it will take to moderate your focus groups or depth interviews; how many hours it will take to analyse the data; and how many hours it will take to write the report in the style that you want it.
One of the largest costs associated with market research is the collection of data – how many focus groups or depth interviews are conducted or how many surveys need to be completed (and how hard it is to find the people you need to include) has a significant impact on the overall budget.
The second largest cost relates to your wish list – how much you want to find out. The more questions you want to ask, the longer it takes to design your questionnaire and the longer it takes to complete the analysis and reporting.
Without a budget, we design using robust research design principles, ensuring you have an adequate sample size and adhering to industry guidelines on interview length (or using your wish list to estimate how long the questionnaire or focus group might need to be). If you’re an experienced research buyer and have a good understanding of current industry costs, this design will fit probably within your budget. But what if it doesn’t?
However perhaps the overall budget is small, or you only need indicative information so your research budget is limited, please tell us, then we won’t spend hours designing something you can’t afford and we can propose alternatives to bring your project within your budget – a shorter wish list, focused on the most important information you need to know; a smaller sample or fewer groups to give you more indicative results; or a different way of collecting the data you need.
If it happens that you have more budget than we feel you need for a well-designed research project, we would let you know the cost with additional options which add further value to consider. Alternatively, we would design a project for you well within your budget, leaving you with money left over to spend on other things.
If you need help estimating a budget, please get in touch and we can give you an idea of a realistic budget. If it turns out that you have less than that to spend then we can advise on the best outcome for your budget.
To find out more about how much research can (or doesn’t have to) cost, please contact the Research Solutions team on 08 9225 7772.