To do market research at all — and certainly to do it well — takes money. In most cases you’ll be using an online survey platform such as Ask Your Target Market (AYTM), so you’ll have some data collection costs. And even if you’re using an in-house customer list, you may be offering incentives to your respondents.
Where is that money going to come from? It’s a little like those old game shows on TV. There are several doors to look behind, and each hides a potential prize. You just have to know which one to open. Let’s look at how different organizations set their market research budgets.
The source for online survey projects will vary depending on organization size.• Small — If you work for a very small company (less than $5 million a year in revenue), market research is typically ad hoc; the budget is allocated by the executive management team “as needed”. • Medium — In the mid-range, say up to $50 million a year in revenue, it's not uncommon for there to be some sort of market research budget as part of an overall marketing budget. It may not be a big budget, but typically you’ll see some part of the marketing budget is allocated for research. • Large — Once an organization grows larger (say, over $50 million a year in revenue) it will generally have a dedicated market research function, even if it's just one person, and a budget for conducting market research.
Tailoring funding to the need
Whether there’s a central market research department or not, that’s just one aspect of determining which “door” the money is going to come from. If there’s a formal market research department, there'll probably be a budget for survey platforms and sample costs. But even in these cases, it’s very common for specific functional areas to fund research specific to their interests. Which Interests?1. Product development or engineering area will often get involved with, and sometimes even fund, product concept testing. 2. Advertising department may contribute budget for logo and package testing projects. 3. General marketing budgets may end up covering message testing or customer satisfaction studies.4. Sales departments may also fund sales-specific research, such as win/loss studies. Bottom line: even if there is a formal market research department, it's not uncommon for specific groups to fund research that's pertinent to their areas.
If your organization is just taking baby steps into real market research, I recommend introducing the idea of establishing a central market research budget. We don't want to be in a situation where important projects aren't getting done simply because we didn't plan ahead sufficiently for that budget. Prior to your next fiscal year, start raising awareness with your management team that it would be a good idea to set aside budget, depending on your organization's needs. If your organization has never had a formal market research budget, you’ll need to pitch that idea very carefully. Is your company customer-centric? Then you can suggest funding for a customer feedback or satisfaction program. And if your organization has some important strategic initiative (and which one doesn't?), then there are likely important market research opportunities in your future. Consider:• We have a strategic initiative to be a global provider in our market? Then we need to understand how our customers’ needs vary on a global basis. • We have a corporate initiative to differentiate ourselves from the established players in the market? Okay, then we need to understand where their weaknesses are so that we can identify opportunities to differentiate.If you frame your budget requests in the context of meeting stated business goals, management will immediately see the connection, and the chances of a favorable response are increased.
The money is probably there
Chances are, there’s money available in the budget to fund appropriate market research activities. The challenging part is finding it — learning which door hides the prize — and then opening the right door. You may not win a new car, but you’ll likely come up with the funding you need to carry out some great market research.