How Procurement Views Market Research: Valuable Insight Or Wasted Opportunity?
Getting value for money is, or should be, the raison d’être for those in the procurement function, and buyers of market research services can verify that as much as anyone. Yet a poorly executed piece of research may see the cost completely eclipse the value of the findings.
Efficiency here depends in part on the questions they are willing to ask; poorly planned research projects and unclear initial aims can lead to substantial spending that will result in little insight if any at all. Well-prepared and thoroughly communicated research, however, will help the client to cut unnecessary costs and receive needed help in both short- and long-term company decisions.
Many companies have misunderstood the true purpose of market research, as they tried to learn not about the customers and their wishes, but about the company’s own strategy. Too many buyers want to know which of their products and which of their ideas can be marketed the best. The question should be about the product the customer wants the most.
By exploring such differences the buyer can choose the right MR agency and add value to the brand. The spread of agencies on the market provides enough choice of suppliers; expertise and experience of the candidates should be the driving force behind the final decision.
The saying ‘buy cheap, buy twice’ truly applies to market research, as choosing the right option for research is the main challenge for procurement. The price of that project should, therefore, be seen only in the context of the client’s eventual returns. The abundance of research techniques is, then, a test of buyer’s acumen and ability to work the stakeholders to understand goals. And the price is not the most important factor. Researchers can conduct a million cheap and quick surveys without ever reaching the goal. On the other hand, one expensive method might be the solution everyone was looking for.
The progress of online techniques and the traditional bias towards quantitative methods are reasons online quant methods (mostly numerous online surveys) are enjoying 24% of entire global demand. Online qualitative methods are less common, with a share of 2%, but are not less efficient or outdated. Often a figure can give quick information about the state of your industry or your company, but the client should always look at qualitative data before applying the results to practice.
In the latest Procurement Leaders’ research 22% of MR buyers named performance to be the primary stakeholder preference at their company. Experience and reputation come second, with 18%, just a bit more than price (15%). It is good to know that for the majority of people performance and experience mean more than price, as the lack of value will put the real cost higher than the price.
There are a lot of affordable and modern agencies, who will gladly provide an approval rating for your brand and products, but real insights can come only from an experienced analyst, and that is what the most MR agencies are lacking.
To find out more about how market research companies operate and the procurement of their services, please click here to download a snapshot of the latest Procurement Leaders Market Research report.
This article is a piece of independent writing by a member of Procurement Leaders’ content team and was originally posted on Procurement Leaders