The pros and cons of in-house and outsourced research
Companies that act without first conducting research are playing a guessing game. Increasingly, however, these are few and far between. In part, their number is dropping because companies that bypass research tend to perform worse than the competition, but also because the barriers to useful research have become so incredibly low.
The real question today is not whether firms should ask questions of their customers to give them information about future product launches, marketing campaigns and operations, but what is the best way to generate this information.
A key consideration is whether you should outsource the process to a specialised and professional outfit or develop an in-house research capability. The option you pick depends on various factors including budget, the size of the organisation and its goals. But, regardless of these, there are general pros and cons that will always impact the decision.
The benefits of in-house research
A glaring benefit underpinning the argument for bringing research in-house is cost. For many businesses in the UK, cost effectively rules out the prospect of commissioning a dedicated third party to do the work for them.
Unless they have resources beyond their size, startups and small businesses will make do with free or cheap online tools, social media, surveys and competitions to gather the data they need. But even for larger businesses, creating a team of researchers is pound for pound cheaper than commissioning an agency.
Having your own team of data crunchers also gives organisations the luxury of constant assessment. You can schedule a calendar of research projects with total clarity of cost and research is “always on”, free from delays caused by negotiating fees and project parameters. It means, in theory, companies with their own teams can get more work done over time.
A key consideration is whether you should outsource the process to a specialised and professional outfit or develop an in-house research capability
A third clear benefit is security. Non-disclosure agreements are all well and good, but there is an innate additional risk of information leakage when organisations share it with outside parties.
The risk might be small and you might not need to share sensitive details in order to complete a project, but in a competitive data-driven environment, where brand distinctiveness and speed to market are important factors, security is a bigger consideration than ever before.
So there are opportunities to cut costs, drive up work volumes and keep cards close to your chest. But the decision to insource your research function is not without its own set of significant risks. The decision should not be made lightly.
The benefits of outsourcing research
One benefit of commissioning a firm is specialisation. Dedicated market research businesses procure the latest enterprise-level tools, read all the books, attend all the events, are thought leaders and spend their working lives trying to outmanoeuvre the competition simply by being better. Can the same be said of your recruits?
Research teams do not have the same commercial and professional pressures. Once hired, they can ease off the accelerator and go with the corporate flow. The affect is unavoidable, and it could impact on the quality of research and insight you’re getting.
Outsourced teams are free to focus on their specialism and they must constantly improve to impress new clients. As third parties, they are also free from internal office politics and inter-departmental fistycuffs.
It would be hard for internal teams to avoid bias on some level and the temptation to come up with the “right results” is ever present
It would be hard for internal teams to avoid bias on some level and the temptation to come up with the “right results” is ever present whether they act on the impulse or not. Market research companies are judged on their reputation for independent, untainted results and so they are incentivised to provide unsullied findings.
In the case of research conducted in person or over the phone, there is a risk that in-house teams will be defensive – consciously or unconsciously – to negative answers. Even the slightest hint of this would taint results. Respondents are also more likely to answer positively if they are talking to the company, rather than an independent set of researchers working on its behalf.
Bias is the tombstone of research and it is hard to cover up. Most people are proud of where they work and have seen first-hand the effort going into products and services. It is human nature to want to defend these efforts and a forgivable, if ruinous, instinct.
The best choice may be a combination
For those still battling with the in-out conundrum, there may be a happy medium in applying a combination of an internal team and hired guns. Depending on the organisation’s priorities and appetite for research, it might be best to hire a dedicated team for day-to-day work and outsource the really big do-or-die projects.
Naturally, this third option throws up its own set of unanswered questions – which tasks go to who, what are the communications channels, who is ultimately responsible for all research? – but it offers a potentially lower cost base with the option to outsource when the avoidance of doubt is paramount.
Whatever route you choose, the same old rules apply – consider your options carefully, keep in mind your unique needs and resist the temptation to settle for half-measures.
Five useful tools for in-house research
1. Think with Google
Google knows more about people and trends than any other organisation on the planet. Think With Google allows you to tap into this goldmine of data. Particularly useful is the Databoard for Research Insights.
2. Survey Monkey
The starting point for thousands of research projects, Survey Monkey is a quick and cheap way of creating sophisticated in-depth surveys. Requires little training and is capable of creating impressive, accurate results.
3. Qlik Datamarket
Gives users access to a comprehensive library of data and provides easy-to-understand displays with its flagship visualisation platform Qlik Sense. Sources include business demographics, currencies, population, and economic indicators, all offered at various levels of granularity, some down to postcode level.
4. Powerprobe and Powercode
These research tools take a different approach to the standard online questionnaire by avoiding set questions and asking respondents to offer unfettered views. Information is processed in real time.
5. One Engagement Hub
This tool is designed to work with existing research systems and “listens” to customers as they interact with your brand. Offers direct feedback, allowing businesses to learn from every customer interaction.