Market research companies offer specialized marketing services to their clients. They gather and analyze data about customers, competitors, distributors, and other actors and forces in the marketplace. Note that a large portion of the work performed by most market research companies is commissioned by specific companies for specific purposes.
However, some companies also routinely collect a wide spectrum of data and then attempt to sell some or all of it to companies that may benefit from such information. Have it in mind that market research could be quantitative, qualitative, or a combination of both. Quantitative research is numerically oriented and requires adequate attention to the measurement of market phenomena, and more or less involves statistical analysis.
For instance, when a coffee shop asks its customers to rate different aspects of its service on a scale from 1 (good) to 10 (poor), this provides quantitative information that may be analyzed statistically. Qualitative research focuses on descriptive words and symbols and more or less involves observing consumers in a market setting or questioning them about their product or service consumption experiences.
For instance, a marketing researcher may choose to stop a consumer who has just bought a particular type of milk to ask why that milk was chosen. Qualitative and quantitative research each offer different insights into consumer behavior and research results are ordinarily more useful when the two methods are combined.
Note that market research can also be seen as the application of scientific methods to solving marketing problems. It involves analyzing people as buyers, sellers, and consumers, examining their attitudes, preferences, habits, and purchasing power. Market research is also concerned with the channels of distribution, with promotion and pricing, and with the design of the products and services to be marketed.
A marketing company’s first priority is to connect its clients with their current and potential clients. This simply means that the bulk of your day will be spent conducting research. Your clients’ customers are, in essence, your customers. Their needs are dynamic. You will have to stay up-to-date on the latest trends and innovations in technology, as well as new research tools and methodologies.
However, when you’re not researching directly for a client, you are researching for your own firm and its future clients. To realize success in this industry, it is imperative that you establish yourself as a thought-leader. A portion of each day is spent writing, both for your own business and your customers. Publishing white papers, blogs, and articles will help you make connections, marketing your business in the process.
Note that meeting with both clients and potential customers also takes up a great portion of each day. Some meetings may require travel, while others can be done via online conferencing. Scheduling, answering emails and phone calls and other administrative duties are equally as essential to the success of your business.
Irrespective of how large you envision your organization growing, starting and managing a market research company will require attention to detail and strong leadership. A balance between confidence and a willingness to learn and grow is also critical. Industry leaders indicate strong bargaining skills would also prove beneficial.
Even though a marketing degree is not necessary, it would prove beneficial. It is advisable that you have a background in this industry, with significant knowledge in marketing, research strategies and tools, and qualitative and quantitative analytics.
Also, since surveys are the most common research tool, it is imperative that you be grounded in the art of questionnaire creation. This requires strong communication and writing skills.
Smart Ways Market Research Companies Make Money
A market research company generates revenue from each paying client. One customer’s needs tend to be different from the next, and the pay is defined by their short and long-term goals, the size of the company, and their budget. These will, hopefully, be ongoing clients that the company builds relationships with.
Some market research companies also offer expertise in a certain area to investigate issues such as brand equity, customer engagement, advertising effectiveness, market assessment/segmentation, new product development, competitor analysis, social listening, opinion polling, etc.
High-end research companies charge a premium for their consultancy and data collection is just a relatively small part of their fees. Some companies also have proprietary products based on a certain statistical analysis, algorithm, or normative database. However, note that the lower you go in the food chain the more companies tend to make money from the actual data-collection.
Fees market research companies charge also vary, depending upon the scope of the project. Two hundred phone surveys could bring in between $5,000 and $15,000, while mail surveys would generate $5,000 – $7,000 in revenue.
Profits also vary, depending upon ongoing expenses, the number of contracted clients, and the level of services you provide them. The National Average for a single employee business is just over $51,000.
No business can sell goods and services that customers don’t want and still make money. That’s why market research comes in handy. Discovering what consumers want, when they want it, and how they want it packaged or delivered is essential to running a business these days.
This industry is recession-proof and there will always be a need. The key to achieving significant growth is in putting your own skills to work for you. However, before embarking on this business venture, consider what your long-term business goals are.
Technology has made everyone an “expert” in marketing and research. With a winning combination of talent and the proper tools, you’ll have the option to remain small and selective on your clients, or grow to a global scale. Both are equally rewarding paths.