Market Research Surveys -- Maximizing Your Return on Investment

The current economic climate has caused some companies to defer or cancel consumer market research surveys. In many cases, a company may have correctly determined that the cost of completing a survey within the parameters required for actionable data is no longer possible given its current budget. However, defining exactly what those parameters should be is not always clear, and that is what determines the project cost. This article focuses on the concept of incidence rates, which can be one of the most important cost considerations in designing market research surveys.

Pricing Components for Market Research Surveys:

While online market research companies will each have their own formula for pricing business and consumer surveys, there are certain factors that almost all vendors take into account. These include:

1. Survey Length (the longer the questionnaire, the higher the cost)

2. Survey Programming and Hosting Services (the more complicated the programming, the higher the cost)

3. Respondent Incidence Rates (the lower the incidence, the higher the cost)

4. Number of Completed Surveys (the more completes, the higher the cost)

Other potential cost considerations are questionnaire design assistance (generally a low-cost item in relation to the overall cost of the study), and any additional reporting requirements such as banner tabulations, verbatim coding, or reporting (many vendors will include a raw data file, collated verbatim and a top-line frequency report at no charge or a minor charge, but there are many situations in which a customized written report involving significant professional time and additional cost is needed).

Impact of Incidence Rates:

The term "incidence rate" refers to the percentage of respondents who qualify to complete a research study. Most vendors incorporate the incidence rate and cost of awards into a quoted cost per complete, referred to as the CPI (cost per interview) or CPC (cost per complete). The lower the incidence rate, the higher the cost; with more pronounced increases as the incidence drops below 20%. For example, a market research study with a 70% incidence might have a CPI of $7.00; while a study targeting high-level executives with a 3% incidence might have a CPI of $50.00. The CPI is then multiplied by the number of completes to determine the cost of sample for the project.

SUGGESTION: For lower incidence rate studies, ask the vendor if the targeted select is pre-identified. The CPI on a pre-identified select is almost always less expensive in a low incidence study because there is less risk to the vendor and no need to blast out emails to a large portion of its database.

Survey Design and Incidence Rates:

Selection of the specific criteria for respondent qualification, and the wording on the questionnaire of the associated screening questions, is a critical element of any project, particularly lower incidence studies. Differences in qualification requirements can often have a significant cost impact. Even a screener such as "How often do you travel out-of-town on business..." can have very different pricing depending on whether the screening requirement is twice a year or four times a year. While the goal of a survey should always be to reach the targeted audience that can best provide the desired feedback; there is often some flexibility in defining the screening criteria.

SUGGESTION: Review the specific goals of the study with the vendor's statistician or other questionnaire design expert to determine what options are available for defining respondent criteria that can reduce costs but still produce actionable data.

Survey Hosting and Incidence Rate Testing:

Some online market research companies provide survey hosting services in addition to survey sample. In such cases, they may offer incidence rate testing at no charge or for a small fee. An incidence rate test is a small study using the screening questions only which is conducted in advance of the actual project. With this information, a prediction can be made as to the actual incidence rate and its cost in the field. The client can then determine how many completes will fit within budget, what changes might be needed in respondent qualifications to increase the incidence rate, or if the project still makes sense from a cost perspective.

SUGGESTION: Take advantage of this option if the study is low incidence and the incidence rate is uncertain. In many cases, the incidence rate established in the test might be higher than expected, resulting in a lower project cost. Or, if not, an informed decision can be made on what adjustments are needed in other parts of the project to lower the overall cost.

Working with a full-service market research supplier that is involved in the different phases of the project including questionnaire design, sample, hosting, and analytics brings the parties together with the common goal of providing high-quality, actionable data in a cost-effective manner. Take advantage of the vendor's expertise in each of these phases and discuss the scope of the project with the vendor's statistician or other questionnaire design expert. Respondent criteria, respondent targeting, number of completes, and other cost sensitive items are legitimate topics of discussion on which the vendor should be able to provide expert advice.  There is rarely only one approach to a survey project.