Pitfalls of using outside firms?

Question

What are the pitfalls of conducting market research using an outside firm?

Answer 1

While there are good reasons to invest in the services of an outside research firm, there are also circumstances when a company may be better off doing the research themselves.

Sometimes companies want more information on a topic, but it isn’t a critical need. In this situation, gathering some anecdotal information from the market can provide enough information to be useful without incurring the expense of an outside consultant.

If a company’s budget is so constrained that hiring an outside firm to do the research means there is not enough budget remaining to implement the results, we would recommend either scaling back the research or using internal resources to gather as much information as possible.

Working with an outside research firm requires commitment and buy-in from the sponsoring client. The client has to invest time--sharing information and developing objectives with the research firm. In addition, the research will only be useful if there is internal buy-in around the credibility of the research project. If the research does not have credibility with key internal users, they will probably not use the results.

Answer 2

Not very many.

One is that it's always possible that they will leak the info to others, so be sure you have them sign a confidentiality agreement. However, if this was happening, they wouldn't be in business very long. One perceived negative is the cost vs. doing it yourself. However, they tend to be much more effective than your own internal people, so the cost is usually justified. Finally, they don't always know exactly what you're looking for, so be certain to have detailed requirements in writing, and stay on top of things.

Answer 3

One hazard is , they tend not to be "yes" men. You may not want to hear what they will have to say.