The Costs and Benefits of Primary Research

The Costs and Benefits of Primary Research

When you decide to launch a new product, enter a new market, or pivot your business’s market profile, the first step should be research. Before funding is sought and storefront locations are scouted you’ll want to understand the ins and outs of the market you’ll be entrenched in. That understanding comes from the accumulation and analysis of data. But how should that data be gathered? And what can you spend on it?

How that research is gathered is the question you’ll be determining as you start preparing your business plan. Both primary and secondary research provide great benefits. Each has an associated cost as well.

Secondary research involves the gathering and analysis of existing research. There are limits to the precision of this research to your exact purpose and the specificity with which it can answer your particular research questions. While secondary research can present a solid tool as you explore potential avenues for your business, the potential gaps will need to be filled in. This can be done in a number of ways, but if you can spare the additional expense, primary research will eliminate them entirely.

Primary research allows you to gather information directly from your current or potential consumer base to learn how to improve current products or services or what potential exists for new products or services in that market. You’ll also be able to gather information on consumer opinions, experiences, and preferences. This information can be used in a number of ways, in addition to its ability to answer your essential research questions.

Primary research also allows you to craft your research process so that it answers the specific questions you have in exactly the way that will benefit your eventual decision making process about a particular product, market, or consumer base. With primary research you can make the process inform your decisions.

The three types of primary research that will generally be the most beneficial to you are focus groups, interviews, and surveys. Each will allow you to gather raw, original data to investigate your research questions with consumer responses.

Focus groups bring together a collection of potential consumers to give feedback and opinions on specific products, services, or issues. Generally you’ll make sure your focus groups are made up of target consumers with specific traits like age, sex, or socio-economic status. Within a meeting the group will engage in a targeted discussion that can provide you with general consumer and market insight in a relatively short time frame. Be mindful of the cost associated with the people you bring in and the location you use for the meeting.

Interviews will generally consist of the interaction of a consumer and interviewer. Unlike focus groups, which include a number of participants, interviews will typically take a one-on-one format and can be done over the phone or virtually in addition to the traditional in-person arrangement. Interviews don’t carry with them the potential lack of personality and possible dominant personas in focus groups. This helps interviews garner more honest and thoughtful responses. In addition, interviews give you the opportunity to be more thorough about specific topics. As you prepare questions make sure they are specific and targeted, but that they also provide the opportunity to create discussion. Have follow up questions for the depth you wish to get to with specific topics. Lastly, be aware that you will need to perform a number of interviews to get enough data to see specific trends in your consumers. Also, realize the financial cost associated with hiring interviewers or the opportunity cost associated with performing the interviews yourself.

Surveys are a common form of primary research as they allow you to reach a larger number of consumers than a focus group would, without the time required to perform individual interviews. On the flip side though, you will lose some of the personal nature of responses from a more anonymous group of consumer respondents. There are a number of ways to perform surveys, from web based and email to mailing lists and in-person. Surveys tend to represent a more financially effective option for gathering primary research and are a first-choice for many market researchers

As you prepare for your primary research be sure to take a backwards approach, understanding the goal of the research before you build out the questions that will be answered, so as to limit any variables or unusable responses. And remember that primary research will gather more specific data for your goals, needs, and questions, but is more labor and cost intensive than gathering and analyzing secondary research. It’s important to determine which method will be more beneficial to you at the cost outlay before you start working on either.

About author

Michael Barry
Michael Barry 31 posts

Michael Barry is the Editor-In-Chief at AgeOfTheSmallBusiness.com. Currently living in Boston, Massachusetts, he received his B.A. in Financial Economics from St. Anselm College and his MFA in Creative Writing from the Stonecoast Program at the University of Southern Maine.

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