Marketing Research: In-house or Outsourced?

If you’re thinking of undertaking market research it can be tricky trying to decide whether to outsource the work or do it in house – either designing your own research program or hiring new staff to support a research department. It can be tricky trying to decide which avenue will end up being most profitable as each has its own merits and potential pitfalls. The debate is multi-faceted and we thought it would be helpful to look at the pros and cons of in-house and outsourced market research.

In house market research – Pros

Cost efficiency

In the short term setting up a marketing research program or department will cost more than hiring a research firm but over several years it will pay for itself and be more cost efficient than hiring a third party. In the short term, you have to pay for staff, software and a variety of start-up costs as well as maintaining salaries.

Internal company understanding

Keeping your research programmes in-house means that your staff will have a very clear understanding of the company, the internal operating mechanics and your core markets. However, the downside is that staff are ingrained within the project and the company and will not have access to wider demographic information and research data.

Ability to run on-going market research more efficiently

By taking out the need for third party influence you do gain the advantage of being able to run long research campaigns and have constantly updated direct data from your customer bases. While third party companies can encompass this role it is often easier to keep things in house as lines of communication and business development understanding are already there.

In house market research – Cons

Loss of objectivity

The loss of objectivity is one of the core reasons why many companies choose to outsource their market research; even though they could support an internal department. A market research company has an impartial and objective view of your business and your research needs. Internal staff find it hard to remain objective and this can affect data quality and data interpretation. Simple research methods like constructing impartial survey questions become more difficult in an internal program.

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Running costs and best practice

Market research software, best practice and research technique changes on a very frequent basis. Unless you are prepared to keep your staff up-to-date and fully trained, you will slip behind; in terms of your research efficiency. For companies operating on tighter budgets this can give you a disadvantage in the research market.

Outsourced market research – Pros and cons

Most of the pros and cons affecting market research are covered in our analysis of in-house market research; the costs, the objectivity and knowledge available. However, there are some further pros and cons that specifically apply to outsourced market research.

Firstly, even if you hire fantastically skilled staff the truth is that market research firms have the scope and knowledge to deal with market research. They have specialised staff for all different aspects of market research which means you can have a larger amount of expertise to apply to your research needs. Secondly the objectivity and data pools that a market research firm can bring to bear on your research program allow you to retrieve more pertinent data and a larger scope to your research. The largest downside remains the price as long term use of a market research firm is costly. However, to ensure the highest quality of data outsourced market research really does offer the best results.

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